Liechtenstein is a very attractive country for foreign investors because of the taxation system which provides for exemptions and incentives for certain industries, because it is a powerful financial center, and also because the Company Law provides for various types of structures to be established here. Many foreign companies have established offices here in order to offer their services. Foreign entities can choose to set up subsidiaries which operate independently from the parent company, but they can also establish branch and liaison offices in Liechtenstein. These structures depend on the mother companies.
Our Liechtenstein company formation agents can assist foreign companies in choosing between setting up subsidiaries, branches or representative offices here.
What is a Liechtenstein liaison office?
The liaison or representative office is the simplest business form for foreign companies to operate in Liechtenstein, because it does not allow carrying out commercial activities. The Liechtenstein representative office is best suited for companies seeking to test the market or to promote their services. The main activities to be undertaken by a liaison office in Liechtenstein are:
- – marketing;
- – research;
- – represent the parent company in relation with customers or partners.
The representative office can also engage in contracts with companies in Liechtenstein, but it cannot sell or purchase goods or services.
You can also watch our video on how to open a liaison office in Liechtenstein:
How to set up a representative office in Liechtenstein
A Liechtenstein liaison office does not have a separate legal personality and it is strictly connected to the parent company. The registration of a representative office is simpler that the company incorporation procedure in Liechtenstein, as the foreign company must only notify the Commercial Register about the existence of the liaison office. The main requirement to open a liaison office in Liechtenstein is to have a local address which will represent the registered address of the office.
Why set up a Liechtenstein liaison office?
As mentioned above, the main role of the representative office is to carry out market research and it is usually created to test a market before creating a new company in Liechtenstein. The representative office is set up by small and large companies in other countries and this is the first “natural” step for companies which cannot decide between two or more countries they want to expand their operations on.
Among the advantages offered by representative offices created in Liechtenstein, are the lack of taxes to be paid on this type of structure compared to the branch office. This is because the liaison office will not undertake any commercial activity. However, the parent company can decide to transform the liaison office into a branch, case in which commercial activities will be permitted.
Taxation of representative offices in Liechtenstein
Not only is a liaison office not subject to the income or corporate tax, but it will not be subject to other taxes such as the value added tax, nor will it have to keep accounting books or file any financial records with the tax authorities. This is because the management of the company is located in another country than Liechtenstein, therefore it is not a Liechtenstein tax resident.
If you want to open a representative office, our company registration consultants in Liechtenstein can offer information on the documents required to set it up. You can also contact us if you are interested in establishing a company in Liechtenstein.