Liechtenstein is a synonym of luxury and prestige, and it is also called ‘the tax paradise’. Naturally, this country has a highly developed financial sector and a large number of foreign enterprises successfully operating under this jurisdiction. With a population of less than
40,000, Liechtenstein is a very tiny state, but low tax rates have turned it into a safe haven for financial institutions. This is one of the reasons why more companies are registered here than citizens.
The advantages of doing business in this jurisdiction are very strong: the safety of legislation and economic conditions are guaranteed. The country has an AAA rating from Standard & Poor's, which indicates its reliability, stable financial situation, and legal security. So, businesses can be sure when they develop their networks here, that 20 years later the conditions will not change, but will remain the same as they are now.
So, if you also have in mind to register a company related to the financial sector and fintech in Liechtenstein, this article will be at handy for you.
Financial Sector under Vigilant Attention
Liechtenstein is part of the European Economic Area, but not the European Union. It is important that the financial institutions registered here, including those that work with cryptocurrencies and blockchain, can circumvent many burdensome EU requirements by continuing to operate throughout the continent thanks to the rules for conducting financial transactions.
To some extent, this is why the banks of Liechtenstein invest in cryptocurrency on behalf of their customers and even offer consultations on ICOs, while the rest of the financial sector in Europe avoids digital currencies.
The financial sector in this country is under close and vigilant attention of the authorities. The Liechtenstein fintech sector, as well as in the financial market of Liechtenstein as a whole is supervised by The Financial Market Administration (FMA). You can imagine how developed the fintech sector in this country is, when you come to know that a separate department dealing exclusively with issues related to fintech has been created in the framework of FMA.
Since Lichtenstein is a member of CES, the directives of the EU are applied to companies who intend to start a fintech business in Lichtenstein. Among these are:
- all banking operations (deposit and credit business), as well as investment services are regulated in accordance with MiFID II;
- payment services in the EU are regulated by the EU Electronic Money Directive and PSD2.
How to establish a fund in Liechtenstein
Liechtenstein has been specializing in asset and business structuring for more than 100 years, and is the only continental European country to have implemented trusts in its own legislation. In addition, it has a very common tool for structuring conditions and succession planning - funds. All this gives Lichtenstein a whole range of opportunities for clients from continental Europe and other countries to provide tools that they understand.
The regulation of the Liechtenstein Collective Investment Scheme is based on the EU Directive on Collective Investment in Transferable Securities (UCITS) and the Directive on Alternative Investment Fund Managers of the EU (AIFMD) and is therefore standardized within the European Union and EEA.
If you plan to establish a fund in Liechtenstein, please be informed that there is an Alternative Investment Fund (AIF) in this country, and you will be able to use its services. The AIF is a sort of a fundraising company for investing in accordance with a specific investment strategy on behalf of investors.
You can also find it helpful to learn in more details about UCITS: this undertaking attracts public capital and invests this capital jointly in specific transferable securities on a risk-sharing basis. However, if a start of a crypto fund in s your mind, then the financial experts advise to study AIFMD, as this is primarily a fund-manager regulation, rather than an investment-fund regulation.
Legal advice on financial technology regulation in Liechtenstein
If you are interested in registering a fintech company in Europe and seek professional legal assistance, you are welcome to IQ Decision UK! Our qualified law specialists will help you understand the specific requirements of EU legislation, and provide a comprehensive legal support for financial activities in Liechtenstein.
You can contact us by phone, e-mail or in any way convenient for you (in instant messengers or by filling out the special form below).