{"id":53698,"date":"2025-12-12T15:47:18","date_gmt":"2025-12-12T15:47:18","guid":{"rendered":"https:\/\/my.legal500.com\/developments\/?post_type=legal_developments&p=53698"},"modified":"2025-12-12T15:47:39","modified_gmt":"2025-12-12T15:47:39","slug":"nuances-of-liechtenstein-tax-structure-an-overview-of-the-taxation-of-natural-and-legal-entities-and-international-tax-law-2","status":"publish","type":"legal_developments","link":"https:\/\/my.legal500.com\/developments\/thought-leadership\/nuances-of-liechtenstein-tax-structure-an-overview-of-the-taxation-of-natural-and-legal-entities-and-international-tax-law-2\/","title":{"rendered":"MERGERS & ACQUISITIONS LIECHTENSTEIN"},"content":{"rendered":"

Overview<\/strong><\/p>\n

Mergers, acquisitions, and corporate transformations in Liechtenstein occur within a unique nexus of domestic law and European Economic Area (EEA) frameworks.\u00a0 Liechtenstein\u2019s small yet sophisticated market means that most transactions are cross-border in nature, often involving foreign investors or group restructurings across jurisdictions.\u00a0 The Principality\u2019s Persons and Companies Act (Personen- und Gesellschaftsrecht<\/em>) (PGR) provides the foundation for domestic corporate mergers, conversions, and other transformations.\u00a0 In parallel, as an EEA member, Liechtenstein implements key EU directives that harmonise cross-border merger and reorganisation procedures across Europe.\u00a0 This dual regime ensures that Liechtenstein\u2019s M&A landscape is both deeply integrated with European standards and tailored to the local context.\u00a0 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.<\/strong><\/p>\n

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Recent years have seen significant legal developments <\/strong>in this area.\u00a0 In particular, the EU\u2019s company law directives \u2013 notably the Cross-Border Mergers Directive (Directive 2005\/56\/EC<\/strong>, now codified in Directive (EU) 2017\/1132<\/strong>) and the new Mobility Directive (Directive (EU) 2019\/2121<\/strong> on cross-border conversions, mergers, and divisions) \u2013 have reshaped Liechtenstein\u2019s corporate transformation regime.\u00a0 These reforms introduce harmonised procedures for cross-border mergers and, for the first time, create statutory pathways for cross-border conversions and divisions <\/strong>(\u201cspin-offs\u201d), which were previously undertaken only via bespoke solutions.\u00a0 Against this backdrop, Liechtenstein\u2019s M&A activity, though modest in absolute numbers, mirrors broader European trends with active sectors in fintech <\/strong>and manufacturing <\/strong>and a prevalence of private cross-border deals.\u00a0 This chapter provides an in-depth analysis of the legal framework <\/strong>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<\/em>\u2019s advisory scope in high-value cross-border transactions.<\/p>\n

EU law in Liechtenstein: application & implementation<\/strong><\/p>\n

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.\u00a0 There is no automatic applicability of EU regulations and\/or directives; instead, the Joint Committee expressly decides to incorporate a directive into the EEA\u2019s legal acquis, after which Liechtenstein enacts implementing legislation to transpose the directive\u2019s requirements.\u00a0 This mechanism has been used to bring the EU\u2019s cross-border merger rules into Liechtenstein\u2019s legal order, ensuring Liechtenstein companies enjoy the same opportunities and protections in cross-border restructurings as their EU counterparts.<\/p>\n

However, the complex procedures within the EEA sometimes may lead to implementation delay, such as in the case of Directive (EU) 2019\/2121 \u2013 the so-called Mobility Directive.\u00a0 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.\u00a0 The Joint Committee had to adopt a decision to append this directive to the EEA Agreement\u2019s Annex (Company Law).\u00a0 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.\u00a0 At the time of writing, the directive\u2019s entry into force in Liechtenstein is pending final domestic ratification formalities, but the legislative groundwork is expected to be completed imminently.\u00a0 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.\u00a0 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.<\/p>\n

The implementation of Directive 2019\/2121 in Liechtenstein is expected to further increase legal certainty and flexibility for corporate structuring.\u00a0 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.\u00a0 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).\u00a0 While the new rules introduce some additional formality \u2013 more documentation and oversight \u2013 they also bring procedural simplifications (for example, standardised forms and coordination).<\/p>\n

Liechtenstein\u2019s legal framework for mergers and transformations<\/strong><\/p>\n

The Liechtenstein PGR is the principal statute governing corporate mergers, acquisitions, and transformations.\u00a0 The PGR sets out the mechanics for domestic mergers, allowing companies to merge by absorption <\/strong>or unification <\/strong>(similar to merger by acquisition or merger by formation of a new company).<\/p>\n

For instance, Articles 351 et seq<\/em>. PGR outline the procedure for national mergers<\/strong> within Liechtenstein, including requirements for merger agreements, shareholder approvals, creditor protection, and registration.\u00a0 These provisions enable two Liechtenstein companies to merge through universal succession of assets and liabilities, with the absorbed company dissolving without liquidation.<\/p>\n

Liechtenstein law also permits transformation (<\/strong>Umwandlungen<\/em>) or conversions of corporate form under the PGR \u2013 for example, a company can change its legal form (such as from a limited company <\/strong>to a partnership or vice versa<\/em>) under prescribed conditions to ensure continuity of legal personality.\u00a0 Notably, minority shareholders are afforded protection in such fundamental changes; if a merger or conversion alters shareholder rights or the company\u2019s legal form, dissenting shareholders may have exit or compensation rights under the PGR\u2019s provisions (e.g. in the event of a change of corporate form or relocation of the registered office abroad<\/strong>, the law provides mechanisms to safeguard minority interests).<\/p>\n

A crucial part of corporate mergers, acquisitions and\/or transformations may be the involvement of authorities<\/strong>.\u00a0 On the one hand, Liechtenstein\u2019s 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).\u00a0 However, on the other hand, other regulatory approvals can be critical in M&A deals.\u00a0 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.\u00a0 Any acquisition of a regulated Liechtenstein company requires FMA approval of the acquirer\u2019s fitness and propriety, and the FMA has seen a rise in such approvals with increasing deal activity in financial services.<\/p>\n

Additionally, the Office of Justice (Amt f\u00fcr Justiz<\/em>) 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 <\/strong>for mergers.\u00a0 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 <\/strong>attesting that the merging Liechtenstein company has fulfilled the necessary pre-merger acts (Article 352e PGR).\u00a0 Only upon this authority\u2019s approval and the registration in the Commercial Register does a merger take legal effect, at which point it becomes final and irreversible <\/strong>(a cross-border merger that has taken effect cannot be declared null and void once registered).\u00a0 This rigorous oversight guarantees that corporate transformations meet all statutory safeguards \u2013 protecting creditors, employees, and minority shareholders \u2013 before they are recognised.<\/p>\n

In Liechtenstein, the participation rights of employees in cross-border mergers<\/strong> are regulated under the Mergers Employee Participation Act <\/strong>(Fusions\u2011Mitbestimmungs-Gesetz)<\/em> (FMG).\u00a0 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.\u00a0 Accordingly, the existing FMG will undergo a comprehensive revision and will be renamed the \u201cRestructuring Act<\/strong>\u201d (UMG).\u00a0 This new law will govern employee participation rights across all three forms of cross-border restructuring.\u00a0 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.\u00a0 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:<\/p>\n