Foreign enterprisers interested in entering the Liechtenstein market can establish three types of entities: subsidiaries, branch offices and liaison or representative offices.
The main difference between these types of companies is that the subsidiary is independent from the parent company, while the branch office is dependent on the mother company. The representative office may not engage in commercial activities in Liechtenstein.
For a detailed comparison between the structures available for foreign companies, you can ask our Liechtenstein company formation agents.
What is a Liechtenstein subsidiary?
The subsidiary is an independent company through which a foreign business carries out commercial activities in Liechtenstein. The main advantage of opening a subsidiary in Liechtenstein is that the parent company can use one of the following types of companies to set it up:
- – limited liability companies;
- – public companies.
The main difference between these two types of entities is that the public company may trade its shares on the capital markets, while the private limited liability company may not. Differences are also in the share capital required to set up the two types of subsidiaries in Liechtenstein: the minimum amount required for a private company is 30,000 CHF, while the minimum capital required to open a public company is 50,000 CHF.
You can also find out from the video below how to establish a subsidiary in Liechtenstein:
Registering a subsidiary in Liechtenstein
All companies in Liechtenstein, including subsidiaries of foreign companies must be registered with the Commercial Register. In order to do that, the following documents must be filed with the Trade Register in Liechtenstein:
- – the details of the shareholders, which in this case are companies, and company directors;
- – proof pf payment of the share capital, which must be deposited in a Liechtenstein bank;
- – the company name reservation form, which must not be the same as the parent company’s name;
- – the subsidiary’s constitutive documents, which are represented by the articles of association;
- – a confirmation letter for the appointment of a Liechtenstein resident acting as representative of the company.
The Liechtenstein subsidiary must also have a registered address in this country.
From a taxation point of view, the subsidiary will be taxed as any other company in Liechtenstein and can benefit from all the advantages this country offers. For example, Liechtenstein has a corporate tax rate of only 12.5%.
Establishing a subsidiary as an establishment in Liechtenstein
A Liechtenstein subsidiary can also take the form of an establishment (Anstalt). This business form can be found in Liechtenstein only and has the following characteristics:
- compared to the limited liability company, the establishment needs a board of directors;
- the subsidiary created as an establishment can carry out both commercial and non-commercial undertakings;
- the establishment is subject to annual audits only if it is involved in commercial activities;
- the registration process of an establishment is quite easy and straightforward.
Our local consultants can also help foreign companies interested in setting up subsidiaries under the form of establishments in Liechtenstein.
Why open a subsidiary in Liechtenstein?
As mentioned above, the subsidiary is an independent entity when compared to the branch establishment. This is one of the advantages of creating a Liechtenstein subsidiary: it can carry out other commercial activities than its parent company. The subsidiary may also have a different management, if the parent company wants.
One of the greatest benefits of a foreign company opening a subsidiary in Liechtenstein is that it can benefit from the Parent-Subsidiary regulation which protects both companies from the risks incurred by one of the entities. Our Liechtenstein company formation consultants can explain how this regulation applies.
What types of activities can a Liechtenstein subsidiary undertake?
The subsidiary can carry out various types of activities, among which:
- – commercial undertakings;
- – sale of goods and services on an international level;
- – can act as a holding company;
- – trading activities.
For assistance in setting up a subsidiary in Liechtenstein, please contact us. Our company registration agents can also assist you in opening any other type of company in Liechtenstein.