Liechtenstein

Overview Mergers, acquisitions, and corporate transformations in Liechtenstein occur within a unique nexus of domestic law and European Economic Area (EEA) frameworks.  Liechtenstein’s small yet sophisticated market means that most transactions are cross-border in nature, often involving foreign investors or group restructurings across jurisdictions.  The Principality’s Persons and Companies Act (Personen- und Gesellschaftsrecht) (PGR) provides the foundation for domestic corporate mergers, conversions, and other transformations.  In parallel, as an EEA member, Liechtenstein implements key EU directives that harmonise cross-border merger and reorganisation procedures across Europe.  This dual regime ensures that Liechtenstein’s M&A landscape is both deeply integrated with European standards and tailored to the local context.  The result is a highly formalised yet flexible legal framework that allows companies in Liechtenstein to engage in complex cross-border transactions with legal certainty and predictable outcomes. Recent years have seen significant legal developments in this area.  In particular, the EU’s company law directives – notably the Cross-Border Mergers Directive (Directive 2005/56/EC, now codified in Directive (EU) 2017/1132) and the new Mobility Directive (Directive (EU) 2019/2121 on cross-border conversions, mergers, and divisions) – have reshaped Liechtenstein’s corporate transformation regime.  These reforms introduce harmonised procedures for cross-border mergers and, for the first time, create statutory pathways for cross-border conversions and divisions (“spin-offs”), which were previously undertaken only via bespoke solutions.  Against this backdrop, Liechtenstein’s M&A activity, though modest in absolute numbers, mirrors broader European trends with active sectors in fintech and manufacturing and a prevalence of private cross-border deals.  This chapter provides an in-depth analysis of the legal framework governing mergers and transformations in and around Liechtenstein, recent regulatory changes and EEA influences, as well as market trends and illustrative case studies reflective of Bergt Law’s advisory scope in high-value cross-border transactions. EU law in Liechtenstein: application & implementation As an EEA member (though not in the EU), Liechtenstein adopts EU company law directives once they are incorporated into the EEA Agreement via decisions of the EEA Joint Committee.  There is no automatic applicability of EU regulations and/or directives; instead, the Joint Committee expressly decides to incorporate a directive into the EEA’s legal acquis, after which Liechtenstein enacts implementing legislation to transpose the directive’s requirements.  This mechanism has been used to bring the EU’s cross-border merger rules into Liechtenstein’s legal order, ensuring Liechtenstein companies enjoy the same opportunities and protections in cross-border restructurings as their EU counterparts. However, the complex procedures within the EEA sometimes may lead to implementation delay, such as in the case of Directive (EU) 2019/2121 – the so-called Mobility Directive.  Although EU Member States were required to transpose Directive 2019/2121 by 31 January 2023, the EEA European Free Trade Association (EFTA) states (Liechtenstein, Norway, Iceland) experienced some delay in incorporation.  The Joint Committee had to adopt a decision to append this directive to the EEA Agreement’s Annex (Company Law).  As of March 2025, the Joint Committee has adopted Decision No. 85/2025 to incorporate the Mobility Directive into the EEA Agreement, and Liechtenstein is now moving to implement it into national law.  At the time of writing, the directive’s entry into force in Liechtenstein is pending final domestic ratification formalities, but the legislative groundwork is expected to be completed imminently.  This means that during 2025, Liechtenstein will likely amend the PGR (and possibly related statutes) to include the new cross-border conversion and division procedures.  A similar process is underway or completed in many EU Member States (for example, Luxembourg implemented the directive in early 2025, and Germany did so in 2023), ensuring Liechtenstein remains aligned with European norms. The implementation of Directive 2019/2121 in Liechtenstein is expected to further increase legal certainty and flexibility for corporate structuring.  By formalising the procedures for cross-border conversions and divisions, the law will provide companies with greater planning reliability and a uniform roadmap for complex reorganisations.  From a policy perspective, it closes loopholes and imposes checks to prevent abuse (such as the requirement of independent experts to confirm that a conversion is not devised to escape debts or harm minority shareholders).  While the new rules introduce some additional formality – more documentation and oversight – they also bring procedural simplifications (for example, standardised forms and coordination). Liechtenstein’s legal framework for mergers and transformations The Liechtenstein PGR is the principal statute governing corporate mergers, acquisitions, and transformations.  The PGR sets out the mechanics for domestic mergers, allowing companies to merge by absorption or unification (similar to merger by acquisition or merger by formation of a new company). For instance, Articles 351 et seq. PGR outline the procedure for national mergers within Liechtenstein, including requirements for merger agreements, shareholder approvals, creditor protection, and registration.  These provisions enable two Liechtenstein companies to merge through universal succession of assets and liabilities, with the absorbed company dissolving without liquidation. Liechtenstein law also permits transformation (Umwandlungen) or conversions of corporate form under the PGR – for example, a company can change its legal form (such as from a limited company to a partnership or vice versa) under prescribed conditions to ensure continuity of legal personality.  Notably, minority shareholders are afforded protection in such fundamental changes; if a merger or conversion alters shareholder rights or the company’s legal form, dissenting shareholders may have exit or compensation rights under the PGR’s provisions (e.g. in the event of a change of corporate form or relocation of the registered office abroad, the law provides mechanisms to safeguard minority interests). A crucial part of corporate mergers, acquisitions and/or transformations may be the involvement of authorities.  On the one hand, Liechtenstein’s framework does not establish a standalone national antitrust or merger control regime; instead, EEA competition law applies directly (including the EU Merger Regulation for large transactions).  However, on the other hand, other regulatory approvals can be critical in M&A deals.  The Financial Market Authority (FMA) oversees transactions involving regulated entities (banks, insurers, asset managers, fintech companies, etc.), particularly changes of ownership or qualifying holdings in such firms.  Any acquisition of a regulated Liechtenstein company requires FMA approval of the acquirer’s fitness and propriety, and the FMA has seen a rise in such approvals with increasing deal activity in financial services. Additionally, the Office of Justice (Amt für Justiz) plays a key role in corporate transformations: it administers the Commercial Register where mergers, conversions, and new entities must be registered, and it performs a legality review for mergers.  In the case of cross-border mergers, the Office of Justice scrutinises the transaction to ensure compliance with all legal requirements and issues a pre-merger certificate attesting that the merging Liechtenstein company has fulfilled the necessary pre-merger acts (Article 352e PGR).  Only upon this authority’s approval and the registration in the Commercial Register does a merger take legal effect, at which point it becomes final and irreversible (a cross-border merger that has taken effect cannot be declared null and void once registered).  This rigorous oversight guarantees that corporate transformations meet all statutory safeguards – protecting creditors, employees, and minority shareholders – before they are recognised. In Liechtenstein, the participation rights of employees in cross-border mergers are regulated under the Mergers Employee Participation Act (Fusions‑Mitbestimmungs-Gesetz) (FMG).  With the implementation of Directive 2019/2121, these rights are to be extended to cover cross-border relocations of registered offices and cross-border demergers.  Accordingly, the existing FMG will undergo a comprehensive revision and will be renamed the “Restructuring Act” (UMG).  This new law will govern employee participation rights across all three forms of cross-border restructuring.  Thus, the provisions on employee participation in cross-border mergers will be revised, and new rules will be introduced for employee participation in cross-border relocations of registered offices and demergers.  The adjustments required for the implementation of the EU directive regarding employee participation in the case of a cross-border merger primarily include the following changes: Limitation of the right of the competent management and administrative bodies of the companies involved to decide not to initiate negotiations on employee participation. Extension of the applicability of existing employee participation systems to all cases involving a domestic or cross-border relocation of a registered office, merger, or demerger that follows a cross-border restructuring. The procedure for establishing employee participation rights in the event of a cross-border relocation of the registered office or a demerger will essentially follow the same model as the procedure for cross-border mergers.  Before issuing the pre-merger certificate, the Office of Justice shall carry out a misuse check if there are specific indications of abuse.  This includes cases where employee rights are intentionally withdrawn or circumvented. In Liechtenstein M&A practice, the most common method to acquire a company is a share deal, i.e. purchasing the shares (or other ownership interests) of the target company.  This is favoured for its simplicity and the ability to transfer the business as a going concern without necessitating assignment of individual assets or contracts.  However, the legal framework also accommodates asset deals (asset transfers), which are typically used only when a transaction involves carving out a specific business unit or when certain liabilities must be excluded.  Notably, the PGR’s provisions allow entire business undertakings or assets to be transferred by universal succession in a merger or division, which can simplify restructuring as compared to a piecemeal asset sale.  In cross-border contexts, mergers and demergers can achieve similar outcomes to share purchases – for example, two companies can merge into one, with shareholders of the disappearing company receiving shares of the survivor as consideration.  From a tax perspective, share deals in Liechtenstein typically do not trigger VAT, while asset deals may be subject to VAT (8.1%); also, capital gains from share sales are generally exempt from corporate income tax, whereas asset deals may generate taxable gains on the sale of individual assets.  For all transactions it is recommended to assess under applicable tax laws in relevant jurisdictions whether a book-value transfer instead of fair value transfer is possible, and whether hidden reserve taxation – also as part of exit or withholding taxation – and acquisition levies could crystallise. Regarding cross-border demergers, to implement Directive 2019/2121, the national legislator shall now also address cross-border demergers of capital companies within the EEA in the PGR, not only national demergers as it stands in current law.  However, according to the legislative status quo, this will be limited to demergers involving the formation of new companies.  That is, a cross-border demerger shall result in the establishment of a new capital company.  An already existing company cannot act as the receiving company in such a demerger.  However, the law shall provide for: cross-border full demergers (Aufspaltungen); partial demergers (Abspaltungen); and hive-downs (Ausgliederungen) for the formation of new companies. These can occur in exchange for shares, and possibly a cash compensation that does not exceed 10% of the nominal value of the shares granted. In summary, Liechtenstein’s domestic law (PGR) provides a robust framework for carrying out mergers, conversions of corporate form, and other transformations, while specialised regulations and EEA-aligned oversight ensure that stakeholder rights are protected throughout these transactions.  The interplay of Liechtenstein’s corporate statutes with EEA directives forms a comprehensive regime enabling even complex multi-jurisdictional mergers to be executed under a clear rule of law. Market trends Though Liechtenstein is one of Europe’s smallest countries, its M&A market reflects disproportionate dynamism thanks to the presence of globally active companies and its role as a hub for private wealth and holding structures.  The volume of M&A transactions involving Liechtenstein companies is relatively modest in absolute terms – on average only a handful of deals are publicly reported each year – but these deals often involve cross-border elements and significant values, especially in finance and industry.  In the absence of comprehensive public statistics for Liechtenstein-specific M&A, one must extrapolate from regional trends and known transactions. The years 2023 and 2024 saw a mixed M&A climate in Europe.  After a slowdown in 2022–2023 due to global economic headwinds (inflation, interest rate rises, and geopolitical uncertainties), the deal environment began to recover in late 2024.  Europe overall experienced a resurgence in certain sectors: for instance, financial services M&A picked up by roughly 20–25% in deal count in 2024 according to industry analyses, and fintech acquisitions regained momentum as valuations stabilised and investors sought strategic tech capabilities. Likewise, the industrial and manufacturing sector, while facing cost pressures, saw continued consolidation as companies aimed to secure supply chains and adopt new technologies (Industry 4.0), leading to targeted acquisitions of niche manufacturers across borders.  Liechtenstein’s M&A activity tends to follow these macro trends. The country’s stable, low-tax environment and its customs and currency union with Switzerland and access to the EU/EEA single market make it an appealing base for companies, which in turn means inbound investment through acquisitions remains steady.  There is a healthy balance between inbound and outbound transactions: foreign investors often acquire Liechtenstein companies for entry into European markets, and Liechtenstein-based firms (some of which are multinational groups themselves) acquire companies abroad for expansion.  Domestic-only deals are less common simply because there are relatively few large independent companies entirely within Liechtenstein; many domestic businesses are subsidiaries of international groups or are holding companies with assets elsewhere. Focus 1: financial sector A significant portion of Liechtenstein’s M&A deals are in the financial sector, broadly defined to include banking, insurance, asset management, and fintech.  The financial industry is a cornerstone of Liechtenstein’s economy and has been undergoing consolidation and innovation.  In recent years, there has been increased deal activity among regulated financial service providers – for example, insurance companies merging to achieve scale, private banks acquiring wealth management teams or client portfolios, and fund management firms consolidating operations.  Liechtenstein’s banks and fiduciary service providers have also attracted strategic partnerships; notable was the trend of Swiss and European banking groups taking stakes in Liechtenstein banks or vice versa, aiming to combine Liechtenstein’s bespoke private banking expertise with broader distribution networks.  The fintech and cryptocurrency sector is particularly vibrant in Liechtenstein, spurred by the country’s forward-leaning regulatory approach (Liechtenstein was one of the first jurisdictions to enact a comprehensive blockchain act, the 2020 Token and Trusted Technology Service Providers Act, which has drawn many fintech startups to establish there).  This has led to transactions where larger foreign fintech companies or even traditional financial institutions acquire Liechtenstein-licensed fintech startups to leverage their regulatory approvals and technology. For instance, one could observe a scenario of a UK digital asset exchange acquiring a Liechtenstein crypto-custodian – a deal that allows the acquirer to benefit from Liechtenstein’s regulatory regime, while providing the Liechtenstein company with growth capital and market access.  Indeed, such strategic acquisitions have been anticipated by market commentators as fintech firms mature and early investors seek exits.  The private equity industry is also active: many investments in Liechtenstein companies (or holding companies) are driven by private equity or venture capital funds, which contribute to cross-border deal flow as they buy or sell portfolio companies that have a Liechtenstein presence. The prevalence of private equity means that a number of deals are not publicly disclosed, but law firms are involved behind the scenes in structuring and negotiating these transactions, often across multiple jurisdictions. Focus 2: industrial and manufacturing sector Liechtenstein is home to globally competitive industrial companies – notably in precision manufacturing, engineering, and related technologies.  A prime example is the manufacturing sector, which includes businesses like Hilti (construction technology), Thyssenkrupp Presta (automotive steering systems, with major operations in Liechtenstein), and Neutrik (electronic connectors), among others.  These companies have international footprints and engage in M&A to acquire new technologies, expand into new markets, or optimize their supply chains.  Manufacturing M&A involving Liechtenstein often has a cross-border character; for example, a Liechtenstein-based tool manufacturer might acquire a smaller German tech firm specializing in automation to enhance its production efficiency, or an Asian industrial conglomerate might target a Liechtenstein precision engineering firm to gain a foothold in European high-end manufacturing.  In the last few years, despite global manufacturing facing challenges from supply chain disruptions, M&A in this sector remained driven by the need for innovation and vertical integration.  We observe that family-owned industrial groups in Liechtenstein (often structured with a Liechtenstein holding company for a family business empire) are engaging in succession-driven sales or partnerships.  Once such case is a Liechtenstein family holding company divesting a subsidiary to a Swiss competitor as part of generational change – the structure involved selling the shares of a Liechtenstein AG that holds a manufacturing plant in Switzerland.  Such deals require navigating multiple legal systems (Liechtenstein for the holding vehicle, foreign jurisdictions for operating subsidiaries) and benefit from Liechtenstein’s flexible corporate law in preparing the transaction (for instance, converting an Anstalt into a joint-stock company to facilitate share transfer, or doing a cross-border merger of a subsidiary up into the Liechtenstein parent before selling the combined entity). Focus 3: holding companies Holdings and Outbound Investments: Liechtenstein is frequently used as a base for holding companies of international groups, particularly for families and entrepreneurs from Europe or beyond who value asset protection and a stable jurisdiction.  Consequently, some M&A transactions involving Liechtenstein are essentially holding company deals – transactions where the target is a Liechtenstein holding entity that indirectly owns businesses in other countries.  For example, an investor might purchase a Liechtenstein holding company that controls operating companies in the EU.  Alternatively, we have seen instances where Middle Eastern or Asian investors establish a Liechtenstein holding company to consolidate various European acquisitions; later, that Liechtenstein vehicle itself might merge with another foreign holding as part of a larger merger of two international groups. Thus, Liechtenstein can be both the entry point and the nexus for complex multi-jurisdictional M&A.  Because of these patterns, inbound vs outbound M&A is a blurred distinction – many transactions are simultaneously inbound and outbound (foreign buyer, foreign assets, but Liechtenstein entity in the structure).  The balance of activity tends to track global capital flows: in bullish markets, inbound investment through M&A into Liechtenstein increases (often driven by foreign investors seeking European targets), whereas in more volatile times, Liechtenstein companies with strong balance sheets may go bargain hunting abroad, increasing outbound acquisitions. Excursus: stock exchange and public M&A Recently, Liechtenstein introduced provisions concerning the operationalisation of stock exchanges (Act of 5 December 2024 on the Operation and Supervision of Trading Venues and Stock Exchanges (Trading Venue and Stock Exchange Act (HPBG)). However, Liechtenstein does not have its own stock exchange (and probably will not have one in the near future); companies based in Liechtenstein that are publicly traded usually list on foreign exchanges (often in Switzerland or Germany).  As a result, public M&A (takeovers of publicly listed companies) involving Liechtenstein is rare and typically occurs via foreign market procedures.  For example, if a Liechtenstein-incorporated company is listed in Switzerland, any takeover would follow Swiss takeover law under the oversight of the Swiss Takeover Board.  Liechtenstein has relatively few listed companies, so this has not been a major feature of the market.  Instead, most deals are private M&A – either private equity transactions or strategic mergers between companies.  Hostile takeovers are virtually unheard of in Liechtenstein’s context, given the closely held nature of most companies; deals are generally friendly and negotiated.  Nevertheless, hostile takeover protection mechanisms are more relevant, especially for international corporations with a foothold in Liechtenstein, next to structural set-ups through foundations, poison pills (shareholder rights plans), dual-class shares, golden parachutes, staggered boards, share repurchase provisions, greenmail restrictions, are but a few of effective possibilities due to Liechtenstein’s flexible and liberal corporate law.  The concept of activist shareholders influencing M&A is also not prominent in Liechtenstein, again due to the lack of widely held public corporations.  Institutional investors (like large funds) play a role mainly as acquirers or sellers rather than agitators; for instance, an institutional investor might decide to exit an investment by selling a Liechtenstein holding company to a strategic buyer, thereby triggering an M&A transaction. Current developments As of mid-2025, momentum in Liechtenstein’s M&A is cautiously optimistic.  The fintech and digital assets sphere is a key driver – with regulatory clarity and the broader fintech rebound, we expect more consolidation and investment in crypto exchanges, blockchain service providers, and payment startups based in Liechtenstein. The manufacturing and industrial sector is also poised for activity as European supply chain reorientation (partly influenced by geopolitical shifts) motivates companies to consolidate operations in stable jurisdictions; Liechtenstein firms could be targets or acquirers in this reshuffling.  Another factor is the global trend of re-domiciliation for tax and regulatory reasons: some companies or funds might relocate to Liechtenstein (or conversely Liechtenstein entities might move abroad) depending on international tax changes (like OECD’s global minimum tax initiatives). The new Mobility Directive rules will likely facilitate such moves, so we anticipate a few high-profile cross-border conversions once the law is in place – for example, a scenario where a Liechtenstein holding company converts into an Austrian company to join that country’s group taxation scheme, or a foreign fund vehicle moves to Liechtenstein for investor convenience.  Overall, deal practitioners forecast that M&A activity in Liechtenstein will modestly increase in the coming year, bolstered by the increased certainty in legal processes and the continued strength of key sectors.  Every indication is that Liechtenstein will remain an attractive, business-friendly jurisdiction, leveraging its legal stability to punch above its weight in the world of cross-border transactions. Conclusion Mergers, acquisitions, and corporate transformations in Liechtenstein sit at the intersection of national corporate law and European law, offering companies a robust framework for both domestic and cross-border reorganisation.  Liechtenstein’s PGR provides a time-tested foundation for corporate transactions, while its implementation of EEA directives ensures that cross-border mergers (and soon conversions and divisions) can be carried out with the same predictability as in any EU Member State.  The recent adoption of the Mobility Directive marks a new era: Liechtenstein is poised to expand its legal infrastructure, enabling seamless cross-border conversions and spin-offs with unprecedented clarity and security.  These legal tools will undoubtedly enhance the Principality’s attractiveness for entrepreneurs and international groups considering corporate mobility or restructuring. From a market perspective, Liechtenstein continues to demonstrate that a small jurisdiction can play a big role in global M&A.  Its key sectors – notably finance (including fintech) and manufacturing – are well integrated into international markets, and transactions often reflect this integration by spanning multiple countries.  While Liechtenstein’s deal flow may not be high in number, it is high in complexity and value, requiring specialised legal expertise.  Issues such as regulatory approvals (e.g. FMA oversight of financial mergers), cross-border legal compliance, and multi-jurisdictional tax considerations are commonplace in Liechtenstein deals, making experienced legal counsel indispensable.  The practical realities of recent years (from economic fluctuations to technological disruption) have shaped M&A activity, but the outlook remains positive: as global conditions improve and new legal frameworks reduce friction in cross-border operations, Liechtenstein is expected to see a continued stream of strategic M&A activity.  Sectors like fintech, which leverage Liechtenstein’s innovative laws, and industrials, which benefit from its stability, will lead the charge. Bergt Law stands at the forefront of these developments.  The firm’s deep involvement in legislative processes and its hands-on experience with cross-border transactions position it as a thought leader and trusted advisor in the field.  Whether it is navigating the intricacies of a cross-border merger in line with PGR Article 352a et seq., advising on the implementation of new rules for conversions and divisions, or crafting bespoke solutions for transactions that fall outside the standard frameworks, Bergt Law brings a blend of academic rigor and practical savvy to the table.  In the evolving landscape of Liechtenstein and EEA corporate law, having counsel who can combine advanced legal analysis with a strategic business understanding is crucial – and this is precisely the value that Bergt Law provides to its clients. In summary, Liechtenstein offers a highly developed, EEA-harmonised legal environment for M&A and corporate transformations, which is continually being refined through both domestic innovation and European integration.  The country’s legal system – anchored by the PGR and augmented by EU directives – ensures that even the most complex cross-border deals can be executed with legal certainty and efficiency.  As this chapter has shown, the synergy of Liechtenstein’s law with European corporate directives creates fertile ground for cross-border mergers, acquisitions, conversions, and divisions.  With expert guidance, companies can leverage these laws to achieve their strategic objectives, whether that means expanding through a merger, relocating via a conversion, or optimising structure via a division.  Liechtenstein may be small, but in the realm of international M&A and corporate restructuring, it punches well above its weight – and firms like Bergt Law are there to make sure each punch lands with precision and impact. Sources Liechtenstein Persons and Companies Act (Personen- und Gesellschaftsrecht) (PGR) Official Consolidation available at: https://www.gesetze.li Relevant articles: Articles 351–356 PGR (Mergers), Articles 333–339 PGR (Conversions), and related transformation provisions. Directive 2005/56/EC – Cross-Border Mergers of Limited Liability Companies Now repealed and incorporated into Directive (EU) 2017/1132 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32005L0056 Directive (EU) 2017/1132 – Codification of EU company law, including mergers and divisions https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32017L1132 Directive (EU) 2019/2121 (Mobility Directive) – Cross-border conversions, mergers, and divisions https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32019L2121 EEA Agreement (Annex XXII – Company Law) The legal basis for implementing EU company directives in EEA States (including Liechtenstein). https://www.efta.int/eea-lex EEA Joint Committee Decision No. 85/2025 – Incorporating Directive (EU) 2019/2121 into the EEA acquis (14 March 2025) Liechtenstein Law of 16 September 2009 on Employee Participation in Cross-Border Mergers National implementation of employee participation under the original EU Cross-Border Mergers Directive. Liechtenstein Financial Market Authority Guidance on acquisition of qualifying holdings in regulated entities. https://www.fma-li.li Liechtenstein Office of Justice (Amt für Justiz) Commercial Register, Pre-merger Certification, and Legality Reviews. https://www.llv.li Swiss Takeover Board (for public M&A involving Liechtenstein companies listed in Switzerland) https://www.takeover.ch European Commission – DG FISMA (Financial Stability, Financial Services, and Capital Markets Union) Company law and corporate governance updates. https://finance.ec.europa.eu European Parliament Research Service (2021). “Reforming EU Company Law: Cross-border Conversions, Mergers, and Divisions” https://www.europarl.europa.eu/thinktank EY, “European financial services M&A activity picked up in 2024, with deal volume reaching a nine-year high” (14 January 2025) https://www.ey.com/en_gl/newsroom/2025/01/european-financial-services-m-and-a-activity-picked-up-in-2024-with-deal-volume-reaching-a-nine-year-high McKinsey & Company, “M&A Annual Report: Is the wave finally arriving?” (19 February 2025) https://www.mckinsey.com/capabilities/m-and-a/our-insights/top-m-and-a-trends    

Direct Taxes on Natural Persons In Liechtenstein, natural persons are subjected to wealth and income taxes. Both state and municipal taxes are imposed, with the state tax rate escalating progressively within an eight-tier rate structure, the highest tariff being 8%. The municipal tax operates by adding a surcharge to the state tax, ranging between 150% and 250%. These regulations on wealth and income taxes can be found in Articles 4 et seqq of the Liechtenstein Tax Act (state tax) and in Articles 75 et seqq of the Tax Act (municipal tax). Direct Taxes on Legal Entities Legal entities fall under the realm of income tax. The tax rate for income is set at 12.5%, with a minimum income tax amount of CHF 1,800 imposed. Private wealth structures, as well as special dedications of assets without personality, are exempt from income tax; they are solely obliged to pay a minimum income tax of CHF 1,800. The regulations regarding income tax are detailed in Articles 44 et seqq of the Tax Act. Liechtenstein does not levy withholding taxes on distributions from corporations. Accordingly, no withholding taxes are withheld on a dividend payment to a shareholder, regardless of where the shareholder resides. The recipient must then declare the dividends in their tax return and pay tax at their respective tax domicile. Dividends paid by other companies to the Liechtenstein company are generally tax-free income at the level of the Liechtenstein company. If the dividend-paying company is a foreign, low-taxed subsidiary that generates predominantly passive income on a sustained basis, the dividends are taxable at the income tax rate of 12.5%. Likewise, capital gains from the sale of shares in corporations are generally exempt from income tax for Liechtenstein companies. If the company, whose shares are sold, is a foreign, low-taxed subsidiary, which sustainably generates predominantly passive income, the dividends are taxable at the income tax rate of 12.5%. Such low taxation is an effective income tax burden of less than 50% of the income tax burden in the comparable domestic case under the Liechtenstein Tax Act. Interest income that the Liechtenstein company receives from a foreign company is taxable at the level of the Liechtenstein company with 12.5% income tax. In case of interest payments from so-called "related parties", the safe harbor interest rates of the Liechtenstein tax administration have to be considered. Payroll/Withholding Tax For residents of the country (unlimited tax liability), a withholding tax is levied on: Income from non-independent activity / substitute income as well as Attendance fees (e.g., of corporate bodies in meetings related to their board functions). For persons residing abroad (limited tax liability), a withholding tax is levied on: Income from non-independent activity / substitute income; Attendance fees; Pension / capital benefits of the 1st and 2nd pillar as well as Benefits due to the dissolution of a vested benefits account or a vested benefits policy Regulations pertaining to withholding tax are detailed in Articles 24 et seqq of the Liechtenstein Tax Act. Value Added Tax (VAT) Value-added tax is a consumption tax designed to burden domestic consumption. On the strength of treaty agreements between Liechtenstein and Switzerland, the territories of both states form a common "VAT single market". If the VAT Act refers to the single market, the area of both states is to be considered and understood. The question of tax liability arises in line with Article 10 of the Liechtenstein VAT Act stating that regardless of the legal form and purpose, anyone operating a business autonomously, independently, and pursuing a sustainable income from services is subject to VAT. Anyone carrying out a professional or commercial activity aimed at the sustainable generation of income from services independently and appearing externally under their name operates a business. The standard VAT rate for Liechtenstein is 7.7 % with several special tariffs applying depending on the types of products and services. Natural persons (sole proprietorships), partnerships (such as general and limited partnerships), legal entities under private and public law, dependent public institutions, and personal associations without legal capacity, which, for example, carry out sales under a joint company name in the construction industry, can become liable to tax. Those not already liable to tax under Article 10 VAT Act become liable to tax if they receive services or supplies from abroad in a calendar year for more than CHF 10’000, which are subject to acquisition tax. The acquisition tax includes: Services, the location of which is in the country according to Art. 8 para. 1 VAT Act and which are provided by companies based abroad that are not registered in the register of taxable persons, with the exception of telecommunications or electronic services to non-taxable recipients; Import of data carriers without market value with the services and rights contained therein (is not subject to import tax if, according to Article 52 para. 2 of the VAT Act, no market value can be determined); Delivery of immovable property in the country, which is not subject to import tax and which is carried out by companies based abroad that are not registered in the register of taxable persons, with the exception of leaving such objects for use; Delivery of electricity in lines, gas via the natural gas distribution network and district heating through foreign-based companies to taxable persons in the country. For those service recipients who are not already liable to tax under Art. 10 VAT Act, the tax liability under Art. 45 VAT Act is limited to the purchase of such services. Persons who are already liable to pay tax must account for each purchase. Stamp Taxes (Issue Tax, Sales Tax) Based on the Customs Treaty of March 29, 1923, the territory of the Principality of Liechtenstein is considered to be domestic in terms of the Swiss federal legislation on stamp duties. Unless otherwise determined and other rules are defined in the implementing provisions regarding the implementation of federal legislation on stamp duties, Swiss provisions regarding stamp duties apply in Liechtenstein. In the event of the formation, establishment, relocation to the country, or increase in the capital of legal entities according to Art. 44 Tax Act, a founding tax of 1 % of the capital is levied with a general exemption limit of 1 million Swiss francs. This rate is reduced to 0.5 % for the capital exceeding five million francs and to 0.3 % for a capital exceeding ten million francs. The statutorily determined capital is decisive in any case. Self Disclosure If a taxpayer discloses for the first time after 1 January 2011 a tax evasion, tax fraud or misappropriation of taxes to be deducted at source committed by him or her on his or her own initiative, without being prompted to do so by an imminent risk of discovery, he or she shall be exempt from punishment and shall only be required to pay the additional tax. For each subsequent self-disclosure of tax evasion, the fine shall be reduced to one-fifth of the evaded tax. In addition, the additional tax must be paid (Art 142 Tax Act). Heirs who have voluntarily done everything reasonable to enable the tax authorities to determine a punishable act are exempt from punishment and are obliged only to pay the back tax. In the case of a first-time voluntary disclosure, the underpaid tax is levied together with interest on arrears for the past five years. In the question of first-time voluntary disclosure, voluntary disclosures made after January 1, 2011 are taken into account. For each subsequent voluntary disclosure, a fine in the amount of 20% of the uncollected tax is owed in addition to the uncollected tax plus interest on arrears. International Tax Law Automatic Exchange of Information (AIA) / Common Reporting Standard (CRS): Under the automatic exchange of information, reporting Liechtenstein financial institutions submit reports to the Tax Administration. The Tax Administration then forwards the received information to the competent foreign tax authority. The deadline for the submission of reports is June 30 of the following year. CBC-Reporting: For Country-by-Country Reporting (CBC-Reporting), reporting entities of a multinational group (group turnover greater CHF 900 million) submit a country-by-country report to their national tax authority, which then forwards it to the competent authorities of the partner states. Reports must be submitted to the Tax Administration by December 31 of the following year. Reporting entities based in Liechtenstein must register with the Tax Administration by the end of the first reporting tax period, using the existing registration form for tax information exchange purposes and appendices to the registration form. FATCA On May 16, 2014, Liechtenstein signed a FATCA agreement based on model 1. Reporting model 1 agreement requires financial institutions to submit reports on US person accounts to the Tax Administration, which then forwards this information to the US tax authority (IRS; Internal Revenue Service). Reporting Liechtenstein financial institutions must register with the IRS and obtain a GIIN (Global Intermediary Identification Number). For reporting Liechtenstein financial institutions to be able to securely submit electronic reports to the Tax Administration, in addition to registering with the IRS, registration with the Tax Administration is required. Registration with the Tax Administration must be done immediately after the classification has been completed and independently from the identification of reportable accounts. The reporting data must be electronically submitted to the Tax Administration by June 30 of the following year at the latest. Double Taxation Agreements (DTA) The international cooperation of the Principality of Liechtenstein with other states in the area of taxation is regulated in various agreements. The List of all Double Taxation Agreements (DTA) and Tax Agreements regarding Exchange of Information may be found under the following link of the Liechtenstein Fiscal Authority: https://archiv.llv.li/files/stv/int-uebersicht-dba-tiea-engl.pdf Executive Summary: The tax system in Liechtenstein is complex and multifaceted, with different regulations for natural and legal persons. Natural persons are subject to wealth and income taxes, whereas legal entities are liable for the income tax of 12.5% with a minimum income tax of CHF 1,800. Dividends received by a Liechtenstein company from other companies are generally tax-free. If the dividend-paying company is a foreign, low-taxed subsidiary generating predominantly passive income, the dividends are taxed at 12.5%. Foreign tax laws apply in case of dividend distributions to entities resident in a foreign jurisdiction. Capital gains from the sale of shares in corporations are generally tax-free for Liechtenstein companies. If the sold shares belong to a foreign, low-taxed subsidiary generating predominantly passive income, the gains are taxed at 12.5%. Interest income received by a Liechtenstein company from a foreign company is taxed at 12.5%. In case of interest payments from "related parties", the safe harbor interest rates of the Liechtenstein tax administration apply. Swiss provisions on stamp duties apply in Liechtenstein unless otherwise specified. Under this regime, a founding tax of 1% of the capital is levied on the formation, establishment, relocation to the country, or capital increase of legal entities, with a general exemption limit of 1 million Swiss francs. VAT is considered a commonality between Liechtenstein and Switzerland, causing both territories to form a common VAT single market with the VAT standard rate being 7.7 %. International tax law encompasses the Automatic Exchange of Information and FATCA, among others, which regulate the information exchange between international parties. Liechtenstein's international tax cooperation is regulated by various agreements, including Double Taxation Agreements (DTA) and Tax Agreements regarding Exchange of Information.

Introduction The realm of financial services is replete with complexities, particularly when it comes to the issuance of financial instruments. The European Markets in Financial Instruments Directive (MiFID 2 as amended) provides a legal framework that governs the issuance business, a term that encapsulates the issuance of financial instruments for one's own risk or the assumption of equivalent guarantees. This article aims to elucidate the intricacies of the issuance business as delineated in MiFID, with a focus on the scope, exceptions, and the obligations that come with it. The Scope of Emission Business Definition and Legal Framework The issuance business is defined as the act of taking on financial instruments for one's own risk for the purpose of placement, or the assumption of equivalent guarantees. The term "financial instruments" is inclusive of a broad range of assets such as equities, debt securities, and derivatives, among others, as per MiFID. The term "placement" in the context of emission business refers to the act of introducing financial instruments into the capital market or to a limited circle of individuals or investors as part of an issuance. This term implies that only activities involving a "placement agreement" are covered. A "placement agreement" is an arrangement in which the issuer entrusts one or more entities with the task of placing the financial instruments either in the capital market or to a restricted group of people, commonly known as an "underwriting contract." Furthermore, the method of placement is irrelevant to the definition of emission business. It does not matter whether the financial instruments are introduced through a public placement or a private placement. Types of Issuance Activities Firm Commitment Underwriting: This usually involves a consortium of companies committing to acquire a portion of the financial instruments being issued at a predetermined price, thereby assuming the sales risk. Options Consortium: In this case, companies may commit to a part of the issuance while reserving an option for the remaining instruments to be placed, especially when there are uncertain placement expectations. Guarantee Consortium: Companies may also assume guarantees that are economically equivalent to a firm underwriting commitment. Exclusions The issuance business does not cover issuances, where the issuing company does not require third-party assistance for the placement of its financial instruments but issues the instruments itself, in its own name and for its own account. Regulatory Requirements and Exceptions Licensing Requirements Any entity intending to conduct the issuance business must obtain a license as an investment firm by the competent national supervisory authority. The requirement applies irrespective of the legal form of the entity. Exceptions Certain exceptions to the licensing requirement exist. Notably, companies that engage exclusively in the issuance of financial instruments for their parent companies, their subsidiaries or other subsidiaries of their parent company, are exempt from providing an investment or financial service requiring licensing. Conclusion and Key Takeaways MiFID provides a comprehensive legal framework that governs the issuance business in Europe. Understanding the nuances of this regulation is crucial for companies and financial institutions that engage in the issuance of financial instruments. Failure to comply with the regulatory requirements could result in severe legal repercussions. Source: BaFin Factsheet Issuance Business Executive Summary: MiFID defines the issuance business as the assumption of financial instruments for own risk for placement or the assumption of equivalent guarantees. Types of issuance activities include firm commitment underwriting, options consortium, and guarantee consortium. Licensing from the competent national supervisory authority is mandatory for conducting issuance business, with certain exceptions. The issuance business does not cover self-emission or own-emission cases.

Hardly any other European financial centre has managed, within such a compact geographic perimeter, to translate the ever-accelerating OECD agenda on tax transparency into binding domestic law as swiftly and thoroughly as the Principality of Liechtenstein; and yet, with the draft Crypto-Asset Reporting Framework Act (“CARF-G”) and the amending statute to the Automatic Exchange of Information Act (“AIA-G-rev”), the country is about to raise the bar once again, preparing both the market and its supervisory ecosystem for a first bilateral and multilateral exchange of crypto-asset data for reporting periods beginning 1 January 2026. From voluntary pilot to hard-law obligation What started in 2023 as a political Joint Statement signed by more than forty jurisdictions, thereby announcing the intent to honour the new OECD standards, has now materialised in Vaduz through a comprehensive Government bill covering CARF, the revised Common Reporting Standard (“CRS 2023+”) as well as consequential amendments to FATCA-, AStA- and CbC-legislation. The legislator’s motivation is of strategic nature: only an unrestricted, timely alignment with the global rulebook preserves the legal certainty demanded by private clients and regulated entities alike. Core mechanics of the CARF-G While the classic CRS focusses on traditional financial accounts, CARF extends the reporting perimeter to any digital representation of value that can be transferred using distributed-ledger technology, thereby closing the “token gap” that allowed investors to migrate from depositary receipts to unregulated wallets. Under the draft, crypto-service providers with a Liechtenstein nexus must conduct due diligence, collect Tax Identification Numbers, and transmit transaction-level information to the Tax Administration, which in turn forwards the data via the multilateral CARF-MCAA channels to participating partner states. Interaction with the revised CRS The CRS 2023+ mirrors digital change as well, explicitly integrating e-money products and central bank digital currencies into the notion of a deposit-taking institution and tightening documentation requirements. To spare financial intermediaries the burden of running parallel legacy and upgraded reporting engines, the bill opts for an “all-in” approach: from 1 January 2026 every Liechtenstein financial institution must apply the revised standard, irrespective of whether the counter-party state has itself moved to CRS 2023+. Transitional relief & governance Existing virtual-asset service providers obtain a grace period until 31 December 2026 to complete their CARF registration, yet only if the foreign state to which they have a stronger nexus has not enacted corresponding duties meanwhile; the Government may temporarily loosen nexus rules by ordinance to avoid double compliance frictions. Enforcement will combine routine AML-KYC reviews with targeted, risk-based audits, anticipating future OECD peer-review scrutiny and aligning with the principality’s Financial-Centre Strategy.. Business implications – why stakeholders should act now Because CARF-G is designed as a reciprocal regime, Liechtenstein-resident crypto-asset users will receive unprecedented transparency towards foreign tax authorities, while service providers face novel data-management, IT-security and contractual-law questions. Early adoption projects should therefore encompass: mapping of token flows against CARF reportable events; upgrading onboarding questionnaires to capture digital-asset indicators; revisiting cross-border client agreements, especially with U.S. persons under the adjusted FATCA scheme; and implementing secure APIs that segregate CARF data from classic CRS files yet allow consolidated oversight. Bergt Law’s interdisciplinary team – combining regulatory and fintech expertise – is already supporting institutions on sandbox simulations, governance frameworks and negotiations with technology vendors. For tailored assistance please contact us via bergt.law/en. Sources: Report And Motion Concerning CARF, AIA, FATCA, ASTA, CBC, No. 47/2025. Key take-aways at a glance Go-live date: first reportable period starts 1 January 2026; data exchange begins 2027. Scope expansion: CARF captures crypto-asset transactions; CRS 2023+ now covers e-money and CBDCs. Single-standard principle: Liechtenstein applies the revised CRS to all counterparties from day one. Reciprocity & peer review: data will flow bidirectionally; compliance quality will be externally assessed. Operational urgency: providers need new diligence procedures, IT pipelines and contract language in 2025. For tailored guidance, visit bergt.law/en or contact our team directly.