The Principality of Liechtenstein is home to a specialised, stable financial centre with strong international connections. The financial services sector is second only in size to the industrial sector.
The financial sector contributes a total of 24% to Liechtenstein’s GDP and generates more than one third of State revenue. Alongside industry, trades and other services, it is thus one of the main pillars of the national economy. The financial sector is an important and attractive employer, with an extraordinarily large share of highly qualified employees. A total of about 6,000 of the approximately 37,000 employees in Liechtenstein work in the financial sector
Europe and Switzerland
Financial service providers based in Liechtenstein enjoy the right to provide services in all countries of the European Union (EU) and the EEA. Moreover, traditionally close relations with neighbouring Switzerland, the customs union with Switzerland and the Swiss franc as the official currency in Liechtenstein give companies privileged access to the Swiss market as well. Liechtenstein is committed to the OECD standards on transparency and information exchange and has an effective system for combatting money laundering and financing of terrorism. The internationally recognised Financial Market Authority Liechtenstein is responsible for monitoring the country’s financial industry.
Liechtenstein banks focus their activities primarily on private banking and wealth management. Thanks to Liechtenstein’s membership in the European Economic Area (EEA), the banks enjoy full freedom to provide services throughout the European single market. Some banks are also active outside Europe, especially in Asia, through subsidiaries or representative offices. Upon completion of a voluntary liquidation, the number of licensed banks fell from 16 to 15 in 2016.
The assets under management of banks (banks in Liechtenstein including foreign group companies) amounted to CHF 234.8 billion at the end of 2016 (previous year: CHF 209.5 billion). Of that amount, banks in Liechtenstein managed CHF 136.8 billion (previous year: CHF 130.5 billion). This means that at a consolidated level, assets under management reached a new record high.
Asset management companies
The core business of asset management companies includes portfolio management and investment advisory services. They also work in securities and financial analysis as well as the acceptance and transmission of orders dealing with financial instruments. Asset management companies are not allowed to receive or hold assets by third parties. Asset management companies are also investment firms as defined by Directive 2004/39/EC.
At the end of 2016, 116 asset management companies held licences in Liechtenstein (previous year: 117). They employed a total of 646 employees at the end of 2016 (previous year: 621). At the end of 2016, the asset management companies had a total of 10,267 client relationships, of which 7281 included an asset management mandate. The companies’ assets under management rose by about 5.5% to CHF 35.13 billion, of which CHF 20.37 billion or 58.2% (previous year: CHF 21.0 billion or 63.0%) were invested at Liechtenstein banks.
Investment undertakings (funds)
Thanks to stability and international compatibility, the Liechtenstein fund centre offers attractive framework conditions for fund providers and their products. Taking account of liquidations and deletions, the number of Liechtenstein funds fell by a total of 20 to 490 funds as of the end of 2016 (previous year: 510). At the end of 2016, 695 subfunds/single funds were authorized (previous year: 714).
The funds were managed by a total of 16 authorization holders. Authorization holders included 15 fund managers or alternative investment fund managers (AIFMs) and one self-managing investment company. The net assets under management at the end of 2016 amounted to CHF 46.03 billion (previous year: CHF 45.24 billion).
Liechtenstein offers insurance undertakings direct access to the countries of the European Economic Area and to Switzerland. This is made possible by Liechtenstein’s EEA membership and the Direct Insurance Agreement with Switzerland. Life insurance, non-life insurance, and reinsurance undertakings operate in Liechtenstein.
The main business of life insurers is fund-linked/unit-linked life insurance. Non-life insurers cover all relevant insurance classes. The reinsurance undertakings in Liechtenstein are captives. These are company insurance undertakings offering coverage of company insurance risks for the parent undertaking or the group.
At the end of 2016, 20 life insurance companies, 16 non-life insurance companies, and 3 reinsurance companies operated with registered offices in Liechtenstein. 10 undertakings operated as captives, 7 of which as direct insurers and 3 as reinsurers.
At the end of 2016 there were a total of 68 licensed and registered insurance intermediaries, of which 60 were legal persons, 5 sole proprietorships, and 3 natural persons. Of the 68 registered insurance intermediaries, 57 worked as insurance brokers and 11 as insurance agents.
According to the annual reports for the 2015 fiscal year, the gross income generated by insurance mediation totalled CHF 26.3 million, of which 62% was generated in non-life insurance and 38% in life insurance.
Occupational retirement provision is becoming increasingly important in Europe. Liechtenstein has thus positioned itself as an attractive location for institutions for occupational retirement provision ( IORPs, pension funds ) as part of its implementation of the EU’s IORP Directive.
The Pension Funds Act governs the taking up and performance of the activities of pension funds. It allows pension funds to accept sponsoring undertakings from other contracting parties to the EEA Agreement, subject to the applicable provisions of labour and social law governing the design of the retirement provision systems in each country of activity. This means that where the supervisory conditions in the home member state are met, and after notification to the host member state, pension funds authorized in any EEA state can provide services in any other EEA state.
Professional trustees and trust companies
The activities of professional trustees include in particular the formation of legal persons, companies, and trusts, the assumption of board and management mandates under article 180a of the Law on Persons and Companies ( PGR ), the assumption of trust mandates, accounting and reviews, as well as financial, economic, and tax advice.
As of 31 December 2016, the number of persons with a licence under the Professional Trustees Act was 396 ( previous year: 378 ). This number includes 139 professional trustees ( previous year: 115 ), and 257 trust companies ( previous year: 263 ). The increase in the number of professional trustees is due to the elimination of dormant licences effective 1 January 2017 and the consequent activation thereof. The deadline for activating them expired on 31 December 2016.
Auditor and audit companies
As of 31 December 2016, the number of persons with a licence under the AACA was 128 ( previous year: 127 ). This number includes auditors ( 40 ), auditors engaged in the free movement of services ( 39 ), foreign auditors established in Liechtenstein ( 3 ), audit companies ( 28 ), and audit companies engaged in the free movement of services ( 18 ).
Patent lawyers and patent law firms
Patent lawyers and patent law firms offer professional advice and representation in the fields of intellectual
Other financial intermediaries