The economy of Liechtenstein is based roughly equally on services (especially financial services) and industry, with a small but significant agricultural sector. The country participates in a customs union with Switzerland and uses the Swiss franc as its national currency. It imports more than 85% of its energy requirements. Liechtenstein has been a member of the European Free Trade Association (EFTA) since 1991 (previously its interests had been represented by Switzerland). It also has been a member of the European Economic Area (EEA) since May 1995 and participates in the Schengen Agreement for passport-free intra-European travel.
|Economy of Liechtenstein|
|Currency||Swiss franc (CHF)|
|GDP||$3.2 billion (PPP, 2009 est.)|
|−0.5% (real, 2009 est.)|
GDP per capita
|$141,100 (PPP, 2008 est.)|
GDP by sector
|Agriculture: 7.1%; industry: 42.8%; services: 50.1% (2008)|
|0.2% (CPI, 2011)|
Population below poverty line
|35,260, 51% of whom commute daily from Austria, Switzerland, or Germany (2012)|
Labour force by occupation
|Agriculture: 0.8%; industry: 39.4%; services: 59.95% (2010)|
|Electronics, metal manufacturing, dental products, ceramics, pharmaceuticals, food products, precision instruments, tourism, optical instruments|
|Exports||$3.76 billion (2011 est.)|
|Small specialty machinery, connectors for audio and video, parts for motor vehicles, dental products, hardware, prepared foodstuffs, electronic equipment, optical products|
Main export partners
|Imports||$2.218 billion (2011 est.)|
|Agricultural products, raw materials, energy products, machinery, metal goods, textiles, foodstuffs, motor vehicles|
Gross external debt
|0% (2001) debt holder of Switzerland, Austria and US|
|Revenues||$1.29 billion (2011 est.)|
|Expenses||$1.372 billion (2011 est.)|
|Standard & Poor's:|
AAA (T&C Assessment)
Liechtenstein's historical customs union with Austria was dissolved in 1919. A customs treaty was signed in 1923 and since its entering into force in 1924, Liechtenstein and Switzerland have been in a customs union with each other and as such the borders between the two countries are open. The German village Büsingen am Hochrhein and the Italian village Campione d'Italia also form part of this customs union (the latter albeit in a de facto manner), which is often referred to as the Swiss customs area.
Liechtenstein utilizes the Swiss franc as its national currency. Swiss border police and customs officers secure its frontier with Austria. Currently there are 21 Swiss border guards stationed in Liechtenstein and 20 Austrian border guards securing its border (as of 2011).
Liechtenstein is a member of EFTA, and joined the European Economic Area (EEA) in 1995 in order to benefit from the EU internal market. The capitalist economy and tax system make Liechtenstein a safe, trustworthy and success-oriented place for private and business purposes, especially with its highly modern, internationally laid-out infrastructure and close connections to Switzerland.
The Principality of Liechtenstein has gone through economic and cultural development in the last 50 years like no other Western country. In the last half century, Liechtenstein has developed from a mainly agricultural state to one of the most highly industrialized countries in the world.
Besides its efficient industry, there also is a strong services sector. Four out of ten employees work in the services sector, a relatively high proportion of whom are foreigners, including those who commute across the border from neighboring Switzerland, Austria and Germany. Industrial exports more than doubled in 20 years from $1.21 billion (SFr. 2.2 billion) in 1988 to $2.9 billion (SFr. 4.6 billion) in 2008. Some 15.7% of Liechtenstein goods are exported to Switzerland, 62.6% to the EU and 21.1% to the rest of the world.
The United States has been the most important export market for Liechtenstein in recent times, totaling $561 million (SFr. 876 million); Germany is second, with $479 million (SFr. 748 million) worth of imports, and Switzerland third, with $375 million (SFr. 587 million).
About 32% of the country's revenues are invested in research and development, one of the driving forces of the success of Liechtenstein's economy. Total R&D spending in 2000 rose by 20.7% to approximately $140 million (213 million francs).
The Principality of Liechtenstein also is known as an important financial centre, primarily because it specializes in financial services for foreign entities. The country's low tax rate, loose incorporation and corporate governance rules, and traditions of strict bank secrecy have contributed significantly to the ability of financial intermediaries in Liechtenstein to attract funds from outside the country's borders. The same factors made the country attractive and vulnerable to money launderers, although late 2009 legislation has strengthened regulatory oversight of illicit funds transfers.
Liechtenstein has chartered 17 banks, three non-bank financial companies, and 71 public investment companies, as well as insurance and reinsurance companies. Its 270 licensed fiduciary companies and 81 lawyers serve as nominees for, or manage, more than 73,000 entities (primarily corporations, institutions, or trusts), partly for non-Liechtenstein residents. About one-third of these entities hold the controlling interest in other entities, chartered in countries other than Liechtenstein. The Principality's laws permit the corporations it charters to issue bearer shares. Until recently, the Principality's banking laws permitted banks to issue numbered accounts, but new regulations require strict know-your-customer practices for all new accounts.
Liechtenstein's standard rate of VAT (Mehrwertsteuer) is identical to Switzerland's for it must mirror the latter's continually and is currently 7.7%. The reduced rate is 2.5%. A special rate of 3.7% is in use in the hotel industry.
In July 2015, Liechtenstein and Switzerland signed a new agreement on double taxation, which took effect in December 2016, superseding the previous one from 1995. Some differences on the withholding tax arose, but Switzerland did not agree to introduce this practice to residents of Liechtenstein working in Switzerland.
In November 2016, the parliament of the principality decided with a large majority to introduce an agreement of automatic information exchange with 27 new treaty partners, including Switzerland. Data collection will start in 2018, and effectual exchange of account information is planned for 2019.
The principal industries are electronics, metal manufacturing, textiles, ceramics, pharmaceuticals, food products, precision instruments, and tourism.
The 2008 Liechtenstein tax affair is a series of tax investigations in numerous countries whose governments suspect that some of their citizens may have evaded tax obligations by using banks and trusts in Liechtenstein; the affair broke open with the biggest complex of investigations ever initiated for tax evasion in the Federal Republic of Germany. It is seen also as an attempt to put pressure on Liechtenstein, one of the remaining uncooperative tax havens, as identified by the Financial Action Task Force (FATF) on Money Laundering of the Paris-based Organisation for Economic Co-operation and Development, along with Andorra and Monaco, in 2007.Canada–European Free Trade Association Free Trade Agreement
The Canada–European Free Trade Association Free Trade Agreement is a trade agreement between Canada and the member states of the European Free Trade Association (Iceland, Norway, Switzerland and Liechtenstein). Signed in Davos, Switzerland on January 26, 2008, it came into effect on July 1, 2009. The agreement is aimed at eliminating all tariffs on goods between Canada and EFTA members.
In 1999, Canada entered into free trade negotiations with the EFTA. Negotiations concluded successfully in June 2007, and the FTA between Canada and the EFTA States was signed on January 26, 2008. Bilateral Agreements on Agriculture between Canada and each EFTA State were appended to the CEFTA. Both came into effect on July 1, 2009. The agreement eliminates almost all tariffs, with certain agricultural and fishery products being excluded from immediate tariff elimination.Bilateral trade totaled $10.7 billion in 2006 (With Canadian imports from the EFTA valued at $7.6 billion and Exports to the EFTA at $3.1 Billion). Investments between the EFTA and Canada are valued at $22 billion in 2006. The agreement is Canada's first free trade agreement with any European nation.Energy in Liechtenstein
Energy in Liechtenstein describes energy production, consumption and import in Liechtenstein.
Liechtenstein has no domestic sources of fossil fuels and relies on imports of gas and fuels. The country is also a net importer of electricity. In 2016, its domestic energy production covered only slightly under a quarter of the country's electric supply, roughly 24,21 %. Liechtenstein's national power company is Liechtensteinische Kraftwerke (LKW, Liechtenstein Power Stations), which operates the country's existing power stations, maintains the electric grid and provides related services.Financial Market Authority (Liechtenstein)
The Financial Market Authority (German: Finanzmarktaufsicht) is the primary financial regulatory agency of the Principality of Liechtenstein. It is an independent, integrated financial market supervisory authority operating under public law and covers all financial markets in Liechtenstein.Healthcare in Liechtenstein
The nation of Liechtenstein has a universal health care system with decentralized, free market elements through mandated health insurance coverage for every person residing in the country (not necessarily just every citizen).Hilcona
Hilcona AG is a food processing company in Liechtenstein and one of the most important employers in the country. The company was founded by Toni Hilti in 1935 and operates from its headquarters in Schaan, the most populous town of Liechtenstein. Two of Toni Hilti′s brothers, Eugen and Martin Hilti, would later found the power tool maker Hilti in 1941. In 1961 Hilcona began with the production of frozen food which makes up for 63 % of Hilcona′s revenue today. Since 2017 Bell Food Group holds 100 % of all stakes in Hilcona. The company operates two production plants, one in Liechtenstein and one in Switzerland, and sells its products in nine different countries in Europe.Hilti
Hilti Corporation (Hilti Aktiengesellschaft or Hilti AG, also known as Hilti Group) is a Liechtenstein multinational company that develops, manufactures, and markets products for the construction, building maintenance, energy and manufacturing industries, mainly to the professional end-user. It concentrates mainly on anchoring systems, fire protection systems, installation systems, measuring and detection tools (such as laser levels, range meters and line lasers), power tools (such as hammer drills, demolition hammers, diamond drills, cordless electric drills, heavy angle drills, power saws) and related software and services.Hilti, a registered trademark of the various Hilti corporate entities, is the family name of the company's founders.Index of Liechtenstein-related articles
This is an index of Liechtenstein related topics.International Lottery in Liechtenstein Foundation
The International Lottery in Liechtenstein Foundation (ILLF) was a government authorised and state controlled charitable foundation that operated Internet lotteries. The ILLF pioneered Internet gaming, having launched the web's first online lottery, PLUS Lotto, in 1995 and processed the first online gaming transaction ever. The ILLF supported charitable causes in Liechtenstein, many of which support projects in poorer nations internationally. The ILLF filed for bankruptcy in September 2011.Liechtenstein Institute
The Liechtenstein Institute (German: Liechtenstein-Institut) is a scientific research center and academic institution in Bendern, Gamprin,
Liechtenstein.The institute carries out research in the history, politics, law and economics of Liechtenstein.Liechtenstein wine
The Principality of Liechtenstein is a producer of wine. The country has a climate ideally suited for the cultivation of wine with mountain slopes facing southwest, calcareous soils and an average of 1,500 hours of sunshine a year. The hot dry wind during the summer months, known as the foehn aids cultivators by having a sweetening effect.
There are over 100 winegrowers in Liechtenstein which produce red and white wines in which despite the small size of the country can produce a significant variety. Liechtenstein is part of the European wine quality system and the international AOC classification.List of Liechtenstein billionaires by net worth
This is a list of Liechtenstein billionaires based on an annual assessment of wealth and assets compiled and published by Forbes magazine in 2017.List of companies of Liechtenstein
Liechtenstein is a principality in the Alps and a microstate. Despite its small landmass of only 160 km² and a population of 38,111 Liechtenstein has a very successful industrial sector and a strong banking industry, making the country one of the most prosperous nations in the world. The domestic unemployment rate is 1,7 % and about 54% of all employees employed in Liechtenstein are commuters from neighbouring countries.List of foundations established in Vaduz
Many philanthropic, charitable and other not-for-profit foundations are established in Vaduz, Liechtenstein. Liechtenstein is a minimum-tax state with strict laws to protect the privacy of its foundations. Foundations established in Vaduz are guaranteed the privacy of their assets.National Bank of Liechtenstein
The National Bank of Liechtenstein (German: Liechtensteinische Landesbank) is a bank located in Liechtenstein, based in the capital city Vaduz. Since 1993 it has been listed as a company at the Swiss Stock Exchange, with the majority of shares (57.5%) owned by the Liechtenstein state. As the state is in a customs and monetary union with Switzerland and have adopted the Swiss franc as official currency, the monetary policy and money supply is the sole responsibility of the Swiss National Bank.Outline of Liechtenstein
The following outline is provided as an overview of and topical guide to Liechtenstein:
Liechtenstein – tiny, doubly landlocked alpine country located in Western Europe, bordered by Switzerland to its west and by Austria to its east. Mountainous, it is a winter-sport destination. It is also a tax haven. Despite this, it is not heavily urbanised. Many cultivated fields and small farms characterise its landscape both in the north (Unterland) and in the south (Oberland). It is the smallest German-speaking country in the world.Prince of Liechtenstein Foundation
The Prince of Liechtenstein Foundation is a portfolio of private companies, museums, and art collections owned by the Princely Family of Liechtenstein. It is essentially a cap for a multitude of investments, such as the LGT Group, the Hofkellerei Wineries, Wilfersdorf Agricultural and Forest Company, RiceTec, and real estate holdings in Vienna, Austria. As of 2012, there were 15 companies and 2 museums owned by the Foundation. In late 2009, rumors speculated that the foundation was attempting to purchase rights to Vaduz FC. However, this has never been confirmed or denied, as of late 2012. The Foundation also plays national heritage and political roles, opening up a Liechtenstein culture museum, selling the political books that support the royal family, and funding right-leaning politicians.The foundation is a Vaduz-based establishment, created in 1970, to manage assets of the Princely Portfolio. Prince Hans-Adam II was head of the foundation from 1970 through 1984, until his brother Prince Philipp Erasmus succeeded him as CEO, Prince Philipp was also the CEO for LGT Group, before being replaced by his nephew Prince Maximilian in 2006. Before becoming CEO, Prince Philipp was a well-known hedge fund investor, working at the head of many influential investment firms. However, Prince Hans-Adam II is still the main beneficiary of the foundation at the present time. The chairman of Pearson PLC, Glen Moreno, is on the board of trustees at the foundation and also LGT Group. Cuno Pümpin is the chairman of the board of directors at Invision Private Equity AG; he is also a member of the board of trustees at the foundation and LGT Group.
|States with limited|