Foreign investors are attracted by several investment incentives Liechtenstein offers. Among these, low share capital requirements and advantageous taxation system. However, not only foreign enterprisers seek to open new companies, but also foreign companies wanting to have an established presence in Liechtenstein. In order to support multinational companies and even smaller ones, the Company Act in Liechtenstein provides for several types of entities. Among these, subsidiaries, commercial and non-commercial establishments and branch establishments or offices. Both foreign and local companies can have one or more branch offices in Liechtenstein.
Our company formation agents in Liechtenstein can help you choose the right type of structure when opening a business here.
You can also watch the video below for information on how to create a branch office in Liechtenstein:
What is a Liechtenstein branch establishment?
The branch establishment is considered any place of business of a local or foreign company in Liechtenstein. The branch office will be tied to the commercial activities of the parent company and will be registered with the Companies Registrar in Liechtenstein. The Company Law also specifies that the parent company will be held liable for the actions of its branch office. Even if the Liechtenstein branch office will be registered and dissolved in accordance with the local legislation, the relation between it and the foreign parent company will be subject to the law applicable in the parent company’s resident country.
How to register a branch office in Liechtenstein
A branch office must be registered with the Liechtenstein Trade Register. The main requirements to open a branch establishment in Liechtenstein is to have a registered address and a legal representative who is domiciled in the country. The legal representative can also be a Liechtenstein company which must be appointed by the management board of the parent company.
Just like in the case of other types of companies, the branch office must also have a memorandum and articles of association which can be filed with the Trade Register and which can be amended in accordance with the local laws.
Liability of the branch establishment in Liechtenstein
As an extension of the local or foreign company, the branch office will not be responsible for the business’ liabilities, as these fall onto the parent company. Also, the parent company has the duty to report with the Liechtenstein Companies Registrar all the changes made in the branch establishment. From an accounting point of view, a branch office registered in Liechtenstein will be subject to the local accounting requirements.
Types of branch offices in Liechtenstein
The Liechtenstein legislation provides for two types of branch offices a foreign company can establish:
- permanent establishments;
- secondary establishments.
While the permanent establishment must carry out a trading activity in Liechtenstein, the secondary branch office has the advantage of having a certain degree of independence from the parent company. The permanent establishment is usually the most employed form of foreign companies for doing business in Liechtenstein as it is covered by double taxation agreements and benefit from various tax facilities.
Another particularity of the permanent branch office is that it is regulated by the Tax Law in Liechtenstein.
It should be noted that foreign insurance companies may also set up branch offices in Liechtenstein provided that they obtain the authorization of the Financial Supervisory Authority in the Principality. These will also be subject to various share capital requirements.
Our clients’ questions on branch offices in Liechtenstein
Yes, compared to the autonomy of the subsidiary, the branch office is controlled by the parent company. This means that all decisions are taken by the parent company.
No, the registration process for a branch office will imply the same steps as for any other company in Liechtenstein.
The Liechtenstein branch office will pay the corporate tax of 12.5% for the income generated in the country.
This decision should be made based on the types of activities the parent company is interested in. Our company registration agents in Liechtenstein can help you make this decision.
The law does not provide for a national to be a director in a Liechtenstein branch office.
For information about the taxation and accounting standards applicable to branch establishments in the Principality, please contact our company registration consultants in Liechtenstein. We can also assist with the registration of a branch establishment in Liechtenstein.