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The Economic Activity of Liechtenstein

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Certain factors contribute to making Liechtenstein economy strong. These are (1) it has a strong financial service sector that boasts of low business taxes and maximum tax rate of 20%, making it as a tax haven in the world, (2) it has more registered companies than its citizens, (3) easy rules on incorporation that attract holding companies, or the so-called “letter-box” companies to register offices that now provide 30% of state revenues; and (4) the presence of stiffungen or foundations, which are financial groups that increase the privacy of financial holdings of non-resident foreigners, and from which additional revenues are generated. These are supported by the banking and finance sector which has 15 chartered banks, three non-banking and 71 public investment companies, and insurance and reinsurance groups.

Tourism accounts for a large part of the country’s economy as the other industries which make it as one of the highly industrialized countries of the world. These include electronics, textiles, precision instruments, power tools, metal manufacturing, calculators, anchor bolts, food products and pharmaceuticals. Already it is the world’s largest producer of ceramics, sausage casings, potassium storage units, and false teeth, and has the largest internationally known manufacturer of direct fastening systems.

Agriculture also maintains a major role in the overall economic growth with its export and local-consumption products of barley, wheat, potatoes, corn, dairy products, livestock, and wine. The country still plans to further develop the industrial sector by focusing on the metal and machines industries and electrical, optical and vehicle manufacturing.