Concept
Liechtenstein is a tiny principality between Switzerland and Austria with one of Europe's most stable financial sectors and a reputation as a place for very old and very quiet capital. Taxes here are moderate, not zero. The main difficulty lies elsewhere: obtaining a residence permit in Liechtenstein is harder than almost anywhere else in Europe.
Residence by Quota and Lottery
The principality strictly limits the number of residence permits issued. For citizens of EEA countries, approximately 28 permits are available per year, distributed in two ways. Half are allocated through a lottery held twice a year, while the other half are distributed by the government based on applications. Citizens of non-EEA countries face an even more difficult path: they need an employment motive or substantial economic significance to the country. Unlike in the Caribbean or Andorra, you cannot directly purchase Liechtenstein residence through investment.
Income and Wealth Tax
Income tax consists of a national rate ranging from 1 to 8 percent and a municipal surcharge, which brings the top effective rate to approximately 22 percent. Wealth is taxed in a distinctive way: net assets are multiplied by a notional yield of around 4 percent, and this calculated figure is added to taxable income. However, Liechtenstein has no capital gains tax on securities and crypto assets and no tax on dividends, making the principality convenient for holders of investment portfolios.
Lump-Sum Regime for the Wealthy
🔗 Related
Tax Residency: Basics · Private Foundations (Foundations / Stiftung) · Holding Structures · Monaco: Tax Regime · Andorra: Tax System
For ultra-high-net-worth individuals who do not work in the country and live on income from capital, there is expenditure-based taxation, known as lump-sum. Tax is calculated on worldwide living expenses at a rate of approximately 25 percent, with an annual minimum fixed at 300,000 francs and locked in for five-year periods. The regime is available to those who are moving to Liechtenstein for the first time or after at least ten years of absence, are not citizens of Liechtenstein, and finance their lives from foreign sources.
⚙️ The Liechtenstein lump-sum is similar in logic to the Swiss forfait: the state takes a fixed sum instead of ordinary income and wealth tax. This is a solution for those whose capital and expenses are large and whose source of income is outside the principality. For everyone else, the main limitation remains the quota on permits.
🍓 Liechtenstein offers moderate taxes, no capital gains tax on securities and crypto assets, and a lump-sum regime starting at 300,000 francs per year for ultra-high-net-worth individuals. Income tax reaches approximately 22 percent, wealth is taxed through a notional yield of 4 percent. The main limitation is residence itself: approximately 28 permits per year for EEA citizens, half of them through a lottery.
This material is of an expert-analytical nature and does not constitute individual legal or tax advice.
Key factual claims
- Income tax consists of a national rate ranging from 1 to 8 percent and a municipal surcharge, which brings the top effective rate to approximately 22 percent.