Set Up a Fintech Company in Liechtenstein
Set Up a Fintech Company in LiechtensteinUpdated on Tuesday 21st April 2020
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Fintech, or financial technology, refers to businesses that offer products, models and solutions for the financial services industry. The goal is to revolutionize the traditional manner of delivering financial services and at the same time improve the experience for the end user, either a corporate client or an individual in need of banking or other financial solutions.
Investors can find various opportunities in this business sector and those who set up a fintech company in Liechtenstein will also have access to a well-developed financial industry as well as good positioning in Europe for the purpose of reaching out to clients in major EU markets. Investing in this field, and opening a company, can be aided by our team of lawyers in Liechtenstein.
Opening a fintech company in Liechtenstein
Fintech companies around the world are setting a new pace for the delivery of financial services. In a rapidly evolving market, that presents certain challenges, investors can keep in mind the following issues when opening a fintech company in Liechtenstein:
- - find a niche: a business field that is widely explored nowadays, fintech offers a number of subdomains and it is advisable to explore them properly before deciding what type of services to offer to clients.
- - the laws: financial services are regulated throughout the world and Liechtenstein is no exception; the Financial Market Authority is the main regulator in the Principality.
- - the experts: the team is very important when opening a fintech business and hiring the right employees is essential.
- - funding: some fintech startups may consider some funding options, such as crowdfunding.
Our team of lawyers in Liechtenstein can help you with detailed information about the relevant laws for investment but also the laws for financial services providers.
Starting a business with the help of our lawyers in Liechtenstein
Company formation in Liechtenstein starts with choosing a type of company, followed by several other mandatory steps and ending with the registration and the licensing, when applicable. Fintech companies do not always require licensing, however, when the scope is related to banking services, certain requirements need to be met.
Below, our team of attorneys in Liechtenstein describes the five main steps that are need when opening a company:
- Choose the type of company: investors have several types of companies to choose from, among which the limited liability company (GmbH); this is also the phase during which the registered office address is chosen.
- Check the name availability: all company names need to be unique and a pre-registration verification is performed with the Commercial Register Division.
- Draw up the documents: these are the Articles of Association, proof of submitting the capital, the director’s specimen signatures and others, as required.
- Register: once the articles are drawn up and the name is reserved, the company can be registered with the Commercial Register; a license is issued within approximately one week.
- Obtain licenses: this is not required for all businesses, however, it is performed once the company has been registered.
Other steps will include tax registrations, equipping the company headquarters, hiring employees and the ongoing compliance for tax reporting purposes.
Liechtenstein has a simple tax system that is an advantage for many investors who open a company here. The main taxes, that also apply to a fintech company, are the following:
- - 12.5% is the fixed corporate income tax.
- - 1,800 CHF: this is the alternative minimum corporate income tax applicable to companies with a balance sheet of no more than 500,000 francs during a certain period.
- - the value-added tax in Liechtenstein has a standard value of 7.7%; fintech companies are subject to VAT if they have an annual turnover of more than 100,000 CHF per year.
Investors who wish to know more about founding companies as well as the taxation principles can reach out to our team of lawyers in Liechtenstein. Our tax attorneys, along with our specialists in accounting and reporting can provide complete details on the corporate obligations once an investor has successfully registered a fintech company.
The fintech sector in Liechtenstein
Liechtenstein can be seen as a favorable location to start a fintech project such as a blockchain company or a crypto exchange, among others. The Financial Market Authority has a special department dedicated to Fintech technologies and recognizes the opportunities that this business sector can present. The regulation in the financial technologies field imposed by the Authority is a transparent one and maintains good communication channels with investors and innovators in this field. What’s more, Liechtenstein is a good location to base a fintech company because of its liberal economic policy as well as the simple taxation system described above.
Companies in the fintech industry are subject to a number of laws and may be subject to licensing requirements from the Authority. Our attorneys in Liechtenstein remind investors that the company, once incorporated, will be subject to the due diligence legislation that aims to prevent money laundering and terrorist financing. Because the licensing requirements are not always clear, and they can depend on the specific types of services offered nu the company, we recommend that investors reach out to our agents for more information and an evaluation based on the business model.
Some of the laws that may apply to fintech companies are the following: the Banking Act, the Payment Services Act, the Electronic Money Act, the Law on Professional Due Diligence, the Remote Financial Services Act, the Asset Management Act and a number of other legislative and regulatory provisions. The Tokens and trusted Technologies Service Provider Law is specifically designed to regulate the token economy as well as provide regulations for cryptocurrency and blockchain projects. It is a law that does not interfere with any existing EU laws that may apply in this field.
The fintech sector is one that benefits from a favorable regulatory regime, that is subject to constant improvement and the effort to allow entrepreneurs to enhance the consumer’s confidence in these technologies. Investors and entrepreneurs can obtain feedback on their projects from the special department within the Financial Market Authority. The blockchain and the cryptocurrency sectors are among the most developed ones, however, the tokens law will allow for future developments in this area as well.
Investors who wish to open a fintech company in Liechtenstein can offer a wide range of products and services and they can structure their company as an AG or a GmbH legal entity.
Our law firm in Liechtenstein offers complete services related to company formation and counseling in commercial law. Contact us for more information about how to start a business.