At first sight, Liechtenstein may seem like a time capsule to the Middle Ages, with all its medieval castles, extraordinary landscapes, and ruled by one of the few royal families left in Europe.

This tiny principality is located in a paradisiac valley in the Alps. It offers a great retreat from life in great cities and heaven for financial freedom, all this just 15 minutes from Switzerland and Austria.

With about the size of Manhattan, Liechtenstein is one of the world's smallest countries, with about 160km2 and 40,000 inhabitants.

Despite its small size and population, Liechtenstein has become one of Europe's wealthiest countries and one of its last financial freedom frontiers. The secret is a free market economy with great incentives for foreigners to invest in industries and use its financial system—this why a country of only 40,000 people has 70,000 registered companies in its territory. 

Investors worldwide are seduced by one of Europe's lowest tax rates and a government that fosters the people's pursuit of financial freedom.

Why should be Liechtenstein on the top of your list for your family office?

Low taxes: Compared to the corporate tax rate of 30% in Germany and 33% in France, plus their hefty income tax rates, the 12.5% corporate tax rate makes Liechtenstein look good. 

It is not a tax haven: In 2018, the OECD removed Liechtenstein from the List of Uncooperative Tax Havens. Thus, it is a fully whitelisted jurisdiction making it a top destination for high-profile family offices.

Enjoy nature: Liechtenstein is the perfect country for people who love the outdoors, with dozens of square kilometers of mountains and forests to explore.

High standard of living: Liechtenstein is one of the world's richest countries, with a GDP per capita of 150,000 dollars, and has the Swiss franc as its national currency. People earn an average of $6,000 of monthly income.

Economic Stability: Liechtenstein is so stable that Standard & Poor rates its national debt as AAA, the firm's highest standard. Plus, the national currency is the Swiss Franc, which is even more stable than the US Dollar. Here you won't worry about inflation, unemployment, or other problems that affect most economies.

Liechtenstein trusts: Liechtenstein is the only civil law jurisdiction to adopt its own trust legislation in the world. It has no limits of perpetuity or accumulation of capital. Plus, the details of the trust are kept private.

Cryptolicenses: Liechtenstein is one of the first countries in the world to enact a crypto licensing law. It is one of the most modern legislations with a beneficial regime. This is an excellent opportunity for tech-savvy family offices.

A bit of history of Liechtenstein

Liechtenstein was founded in 1719, when Prince Johann Adam purchased Vaduz and Schellenberg's lordships, merging them and raising it into an Imperial Principality, which remained part of the Holy Roman Empire.

In 1866, this micronation became independent, remaining a quiet, rural country with no business in European affairs. However, poverty and lack of opportunities made many Liechtensteiners migrate, mostly pursuing the American dream in the United States.

While Liechtenstein remained neutral in World War I and II, it was closely tied to Austria, making the allied countries impose an economic blockade. This forced this tiny principality to starvation that drew to conclude a monetary union with Switzerland.

After World War II, the country faced many economic problems, making the royal family sell part of its art collection, including the "Ginevra de Bencci" of Leonardo Da Vinci, purchased by an art gallery in the United States. 

Prince Francis Joseph II led a fast industrialization period, stimulated by a free market economy with low corporate tax rates. The transition was huge. In a few decades, Liechtenstein passed from being rural to a developed and diversified economy.

Under favorable conditions and sound leadership, Liechtenstein's GDP per capita raised from $20,000 to $150,000, one of the world's highest.

After Francis’s death in 1989, his successor, Hans Adam II, continued the path of his father and integrated Liechtenstein to the United Nations, the European Free Trade Association, and the European Economic Area.

Being part of the European Economic Area offered a great advantage to Liechtenstein's booming financial system. While its citizens and companies have virtually no restrictions to invest in Europe, the EU bureaucrats don't interfere with their economic policies. Thus, they can rely on a fully independent economy.

Why Liechtenstein?

Liechtenstein is a stable, safe, and not tumultuous country governed by a benevolent prince, whose purpose is simple: keep people happy and money flowing into Liechtenstein.

As Liechtensteiners don't worry about inflation, unemployment, or poverty rates, they can enjoy the beautiful mountains, breathtaking views and practice a lot of skiing. That's the reason why Liechtenstein has won ten Olympic medals, all of them in Alpine skiing.

On this little principality, most people's only issue is to enjoy a quiet, private life while they amass tons of money. Thanks to the low tax rates and a market economy, anyone in Liechtenstein can enjoy full financial freedom.

Liechtensteiners value silence so much that in a pamphlet directed towards immigrants, the government states that they strongly advise against holding "noisy festivities" during lunch (from noon to 1:30 pm) and after 10:00 pm.

Not convinced yet that Liechtenstein is the perfect place? Perhaps the low crime rate will do the trick. This country is so safe that the last murder occurred in 1997, and robberies are incredibly rare. The government maintains a well equipped police which maintains public order.

On the other hand, imagine enjoying a party with the Royal Family. Every year, on Liechtenstein's day, all the residents are invited to the Vaduz Castle to have a beer with Prince Hans Adam and his family. In most countries, only a few people can enjoy a direct, honest talk with their representatives; in Liechtenstein, you can have this privilege yearly.

Visit the ruined castles of Schellenberg, enjoy wine from the Prince's winery, go skiing, and spend a weekend crossing the whole country on foot. All this is waiting for you in Liechtenstein.

The economic potential of Liechtenstein

You may ask why a country with only one McDonald's and no airports has anything attractive for investment. The trick is a business climate friendly to foreign investment with strategic advantages.

One of the main reasons is the low tax rates, a maximum income tax rate of 22.4% and 12.5% of corporate tax, one of the lowest in the region. Plus, capital gains and dividends are not taxed albeit certain conditions apply.

Alternatively, the company registration process is straightforward. You only need to provide the Public Registry details and documentation about the business you want to create. The minimum share capital stipulated by law is CHF 30,000 (or $30,000 or €30,000). The whole process can be completed in a few days.

The government fosters investment through a free market economy, which has resulted in a heavily industrialized economy that employs almost every Liechtensteiner, demanding a foreign workforce of about 20,000 people that comes every day from Switzerland or Austria.

The flagship industry is the manufacturing of false teeth. Liechtenstein is the world's leader in this sector, creating 60 million sets every year, about 20% of world's sales. Most of the production goes to India.

Some other highlights

Education: Liechtenstein's education system is similar to the Swiss, with obligatory education for every child. Because of this, the country has a 100% literacy rate.

There are nine high schools and four centers of higher education, highlighting Liechtenstein's University in Vaduz. In 2006, the Programme for International Student Assessment ranked Liechtenstein's education system as the 10th best globally. Moreover, Liechtenstein has higher PISA-scores than any other European country.

Health: Healthcare system is a noteworthy item, as is a universal healthcare system that assures every resident's access to healthcare. This has given extraordinary results: The life expectancy in Liechtenstein is above 82 years, and, about the COVID-19 pandemic, the government has successfully contained the virus, only suffering 39 deaths.

Because of its small population, there is only one hospital in Liechtenstein, located in Vaduz. However, the governments maintain treaties with hospitals over the border in Switzerland or Austria. 

Transport: Due to its small size, there are no airports in Liechtenstein. However, Zurich´s airport is only 60-90 minutes away from Vaduz and approximately 2.5-3 hours to the airport of Milan and Munich. There is a small section of a train road, which goes to some parts of Liechtenstein and an efficient bus network in place. Vaduz counts with three heliports. 

Since Charlemagne, Liechtenstein has attracted kings and emperors to extend their domains. This tiny principality still holds a halo of mystery and lots of secrets, which are waiting to be discovered. 

Hundreds of years of history have made Liechtensteiners wise people, people who know that the key for achieving wealth is hard work and financial freedom, and the result is amazing: extraordinary richness and a high standard of living for almost all Liechtensteiners. Furthermore, for those not so wealthy, there is a social system that allows them to enjoy a normal life.

Liechtenstein encourages foreigners to invest and take advantage of their opportunities. So for anyone looking for a haven to live and invest in, Liechtenstein must be on the top of the list. 

If you want to know more about Liechtenstein's wonders, just contact us in Mundo!