How does Liechtenstein protect US assets from foreign civil judgments?

Liechtenstein is not a signatory to the Lugano Convention. Consequently, foreign civil or commercial judgments (except those from Austria or Switzerland) are not automatically enforceable. Plaintiffs must initiate fresh domestic legal proceedings in the Principality, which serves as a significant deterrent against frivolous litigation.

Can US companies use Liechtenstein to access the EEA market?

Yes. As an EEA member, Liechtenstein offers full 'passporting' rights. A US company established in Liechtenstein can provide goods and financial services across all 30 EEA/EU states under a single regulatory framework while benefiting from Liechtenstein’s 12.5% corporate tax and AAA sovereign credit rating.

Why is Liechtenstein considered a gateway to the European market?

Liechtenstein is a member of the European Economic Area (EEA), which provides its entities full access to the EU Single Market and the free movement of services. Combined with its customs union with Switzerland, it offers a unique dual-access gateway for international wealth and corporate structures.

Can a Liechtenstein trust be used for EU-wide business operations?

Yes. A Liechtenstein trust or foundation can benefit from the freedom to provide services within the EEA. Bender Brothers & Co specializes in structuring these entities to ensure they meet EU regulatory standards while optimizing for cross-border succession and asset protection.

Gateway to the European Market

For decades, Bender Brothers & Co has assisted English-speaking entrepreneurs to establish a substantive corporate presence within the European Economic Area in Liechtenstein. It also has longstanding experience with the negotiation of lump sum residency programmes in Switzerland and Liechtenstein. The Principality has unique strategic advantages over other European jurisdictions, amongst which are the following.

I. EEA and Switzerland

Liechtenstein enjoys EU market access for goods, services, capital, and people through membership of the EEA. Locally regulated firms may promote financial services in 30 European jurisdictions under unified passporting rules. In addition, the Principality affords privileged access to the Swiss market through its shared currency and customs union with Switzerland.

Being only an hour’s drive from Zürich, the Principality is centrally located and enjoys direct access to skilled expertise from neighbouring Switzerland, Austria and Germany. For the purposes of economic substance, office space is affordable.

II. Security

The Principality benefits from a stable political administration under the guidance of a constitutional monarchy and a sovereign AAA rated financial infrastructure. Liechtenstein’s robust banking sector and use of the Swiss Franc provide the highest level of security with respect to counterparty risk. Its innovative approach to legislation ensures a versatile framework for financial and legal services.

III. Responsive Regulatory Environment and Small Government

Regulatory procedures are efficient, pragmatic and responsive on account of the small scale of Liechtenstein’s civic institutions. The country has a somewhat libertarian approach to government, which is continually held to account through referenda. The population has shown itself to be decidedly supportive of the free market over the years.

IV. White-listed Jurisdiction

Liechtenstein applies corporation tax at 12.5%, which is amongst the lowest in the EEA. Unlike other European jurisdictions, such as Ireland, there is no withholding charge on dividends or interest nor any form of capital gains tax. In spite of wide-ranging opportunities for corporate fiscal structuring, the EU and OECD consider the Principality to be an onshore financial centre rather than a tax haven.

V. Asset Protection against Frivolous Litigation

As Liechtenstein never signed the Lugano Convention on the mutual recognition of civil and commercial judgments, it provides a high level of asset protection. A plaintiff cannot rely on relief granted by a foreign court outside of Austria and Switzerland. He would have no choice but to initiate litigation anew in Liechtenstein, a significant disincentive for frivolous actions with little merit.

Considerations for US Investors

The Principality’s straightforward tax code can simplify cross-border corporate arrangements to a far greater extent than DTA agreements, particularly from the perspective of US investors. As a single-owned GmbH company may be classified as a tax transparent Disregarded Entity (DRE) by the IRS, the consolidated fiscal burden can be reliably limited to 12.5% in light of there being no withholding and capital gains tax in Liechtenstein. Even if the GmbH were configured as a Protected Cell Company, the DRE status could be maintained if each cell had a corresponding contractual debt claim for passive LP investors. Furthermore, it is possible for a Liechtenstein fiduciary arrangement to be construed as a revocable foreign grantor trust to ensure tax transparency at the top level of ownership.