The Principality of Liechtenstein is located in Central Europe between Austria and Switzerland. Liechtenstein is a constitutional hereditary monarchy with a Prince as head of State and a democratically elected parliament. It is a politically stable modern democratic state. Banking and financial services are one of Liechtenstein's main industries and within this industry there are high levels of secrecy with heavy sanctions imposed for any breaches of confidentiality. One of the main attractions of Liechtenstein is its extremely flexible company law, which allows for the creation of any type of legal organisation, which is recognised under the law of any jurisdiction in the world. Low taxes and easy incorporation rules have induced approximately 74,000 holding companies that provide around 30% of state revenues. Liechtenstein has developed into a prosperous, highly industrialised, free-enterprise economy with a vital financial service. The country participates in a customs union with Switzerland and has been a member of the European Free Trade Association (EFTA) and EU since May 1995. Its geographical location, approach to domestic and foreign policy, legal and economic framework, endow it with outstanding qualities as a business center. Its close ties with Switzerland, coupled with its membership of the European Economic Union Area (EEA), create a broad and potentially profitable field of activity for industry, trade, financial services and foreign investors.

Aktiesngesellschaft (AG)

The legal basis of Aktiengesellschaft (Joint Stock Company) is modeled to the Swiss Corporation. It may be defined as an association with its own name, with a stated capital divided into shares and with liability limited to the extent of its assets. Therefore provided the shareholders observe the company’s articles, they have no personal liability for its debts. There are two types of joint stock companies permitted in Liechtenstein. These are the holding and domiciliary companies. A holding company has its registered seat in Liechtenstein with a purpose of mainly administering or managing assets and investments. The domiciliary company has its corporate seat or domicile in Liechtenstein, but carries on its commercial activities outside Liechtenstein. Both entities are exempt from any income tax, property tax (with the exception for real estate) and capital gains tax. Neither pays income tax, but instead pay and annual capital tax of 1/10th of 1% on their capital and accumulated profits with a minimum annual tax of Swiss Francs 1,000.