Roadmap 2025
With Roadmap 2025, the banking centre has developed a new multi-year strategy. The motto of Roadmap 2025 is “Growth through sustainability and innovation”, and it defines precise fields of action for various success factors. The Roadmap also shows what we stand for and what makes the Liechtenstein banking centre unique. Here you can find the press release.
Liechtenstein has a stable banking centre, open to the world, that enjoys a high reputation. It occupies a top position internationally as an asset management centre. With its high innovative capacity, it makes a valuable contribution to the necessary transformation of the global economy towards more sustainability.
With its cross-generational approach and unique combination of tradition, innovation, quality, and sustainability, the banking centre offers its discerning, international clients high-quality financial services.
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Sustainable We take our responsibility towards people and the environment seriously. In doing so, we define sustainability comprehensively and are guided by the 17 Sustainable Development Goals (SDGs) of the United Nations. This approach is supported by the entire country |
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Excellent We place high demands on the quality of our services and products. We invest in our employees and continuously review business models in light of evolving opportunities. |
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Innovative We look ahead, are open to new ideas, and create the necessary structures not only to enable innovation, but also to promote it. We focus on the benefits for our clients, employees, the environment, and society |
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Connected We strive for the best possible international networks and, through our Bankers Association, cultivate professional relationships with all relevant stakeholder groups, with a focus on credibility and the long term. We are convinced that only in that way can our globally oriented banking centre contribute to Liechtenstein's prosperity |
We want to further develop our success factors so that the Liechtenstein banking centre can continue to grow. For each of these success factors, we have defined specific fields of action that will be the focus of our efforts in the coming years.
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«Together, we make our financial centre fit for the future as a successful international player.”»
This new self-conception stands for a modern, future-oriented Bankers Association. For a successful implementation of our “Roadmap 2025”, a strong and competent representation of interests is needed more than ever, helping to shape the necessary changes even more proactively and bundling the forces in the banking centre. The Liechtenstein Bankers Association (LBA) is this voice, representing the shared interests at the national, European, and international levels. For this targeted, effective representation of interests, we have reprioritised our seven core services internally and externally:
You can find more about our performance promise in the Broschure - Roadmap 2025.
Asset management has for many years been the core business of Liechtenstein banks. Because of the limited domestic market, the banking sector has always had an international focus and built up comprehensive expertise on cross-border wealth solutions early on. Today, the banks in Liechtenstein manage a total of over CHF 360 billion in assets, about half of which originates abroad. Over the past 50 years, this value has multiplied, demonstrating the attractiveness of the banking centre. Partly responsible for this high level of growth is a unique combination of competence, innovation, and tradition. The traditional approach can also be described with the words prudent, cautious, and long-term. The result is the proverbial soundness of the banks, which is also reflected in a Tier 1 capital ratio of more than 20%. The Banking Industry Country Risk Assessment (BICRA) places the Liechtenstein banking centre in Group '2', one of the best possible ratings. According to BICRA, the banking sector has proven its high level of resilience even in the crisis year 2020, having to record only minor credit losses.
Liechtenstein is characterised by its lean state apparatus with efficient public authorities like no other country. The public spending ratio is only 24%, the lowest of any European country. Liechtenstein has no government debt, but rather government reserves. The analysts of Standard & Poor's have accordingly confirmed the high stability and attractiveness of the country. For years, they have given Liechtenstein a AAA rating, which only few other countries in the world still have. The lean state apparatus and low level of bureaucracy allow the country to offer comparatively moderate taxation and an attractive tax framework for companies. The uniform corporate earnings tax rate for Liechtenstein companies is 12.5%. This flat tax includes all tax due to the state. Liechtenstein has no capital tax or coupon tax.
Already very early on, the Liechtenstein financial centre was open to digital transformation and new financial technologies. The Liechtenstein banks have already been engaged in digitalisation for many years, and several institutions have made major investments in this area. Clients benefit in two ways: They receive customised services on the front end, and the internal processes are optimised on the back end, which means services are offered more cost-effectively.
But not only banks, also the Government and the Financial Market Authority (FMA) recognised this potential early on, as demonstrated by two supporting initiatives. The FMA's Regulatory Laboratory is the first point of contact for fintech companies on regulatory, licensing, and supervisory questions. This promotes innovation without weakening client protection. And with Innovation Clubs, the Government provides an innovation process accompanied by the state for companies wishing to establish or further develop their new business ideas in Liechtenstein. With its pioneering "Blockchain Act", which entered into force at the beginning of 2020, Liechtenstein was one of the first countries to create legal certainty in distributed ledger technology (DLT) and the token economy – a field of great importance for the future.
Liechtenstein's small size and its political system based on consensus and cooperation mean that the affected sectors and institutions are involved early on before important decisions are made, allowing them to play a significant role in shaping the outcome. Important factors in this regard are Liechtenstein's lean government and lay parliament. Both depend on expertise and active support from the private sector.
Liechtenstein has long been linked to its neighbour Switzerland through friendly and close economic and political relations. Liechtenstein has been part of the Swiss customs area on the basis of a treaty since 1923. Thanks to this treaty, the free trade agreements relating to the movement of goods concluded bilaterally by Switzerland also apply to Liechtenstein. On the basis of the customs treaty, certain indirect taxes – such as the Swiss value added tax – are also applicable in Liechtenstein. Liechtenstein introduced the Swiss franc as its official means of payment in 1924. An official currency treaty with Switzerland was not concluded until 1980, however, in the wake of the great monetary turbulences of the 1960s and 1970s. The treaty goes no further than is necessary to protect the currency. It therefore does not interfere with the freedom of each country to pursue its own economic policies. For the Liechtenstein banks, the currency treaty ensures access to the Swiss financial market infrastructure, in particular the interbank payment system SIC (Swiss Interbank Clearing) operated by SIX.
Liechtenstein joined the European Economic Area (EEA) in 1995. This means that Liechtenstein companies benefit from unrestricted access to the EU/EEA single market with its almost 500 million people and potential clients as well as the four freedoms: movement of goods, persons, services, and capital. At the same time, special quota rules for residence in Liechtenstein – and thus an exemption in the area of the free movement of persons and freedom of establishment – takes account of the country's special demographic situation and small size. For financial institutions, the EU passport associated with the single market is of the utmost importance. It enables them to offer and provide their financial services and products authorised in Liechtenstein in all other EEA countries without further approval requirements. At the same time, Liechtenstein is required to transpose and apply all EU legal acts with EEA relevance into domestic law. This means Liechtenstein financial service providers are subject to the same regulatory framework as financial service providers from other EU/EEA countries. In this regard, the banking sector advocates for proportional regulation that takes aspects into account such as differences in size or specific business models.
The Liechtenstein banking centre has a strong international network. A high proportion of its clients are situated abroad. As a member of the EEA, relations with the EU member states and the EEA/EFTA countries Norway and Iceland are of great importance. At the same time, Liechtenstein is very closely linked, both economically and politically, to Switzerland. Thanks to the currency union, the banking sector is also fully integrated into the Swiss payment services system. This means that Liechtenstein has full economic access to the two most important economic areas in Europe. Liechtenstein is also a member of numerous international organisations (the United Nations, the Council of Europe and MONEYVAL, the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes, the OECD Inclusive Framework on BEPS, Schengen/Dublin, and the OSCE). But not only the state and its authorities have a good network. The Bankers Association is a member of all relevant international bodies such as the European Banking Federation (EBF) and the European Payment Council (EPC). Because of the importance of sustainability, the Liechtenstein Bankers Association has also been a member of the international Financial Centres for Sustainability (FC4S) network since 2018. More than 30 international financial centres already belong to the FC4S network. Liechtenstein's openness to the world is not limited to these memberships, however. Nearly 20 000 people commute to work in Liechtenstein every day. A high quality of life, a wide range of international-level cultural activities, and multifaceted basic and continuing education opportunities through the university level contribute to the attractiveness of the country. This means that Liechtenstein is not only an attractive place to work for locals, but also for specialists and professionals from Switzerland, Austria, and Germany. With several international airports within a radius of 100 to 200 kilometres, Liechtenstein is not only located in the heart of Europe, but is also very easy to reach internationally.
The first bank in Liechtenstein was founded in in 1861. Insurers and professional trustees, fund companies, asset managers, and numerous public-benefit foundations have meanwhile joined banks as part of the financial centre. Financial institutions strongly shape Liechtenstein's image, especially internationally. But it is often forgotten that the country has a broadly diversified, export-oriented economic sector with a strong industrial focus. With more than 4 000 companies (one company for every nine inhabitants), Liechtenstein has the highest density of companies in the world. Contributing more than 40% to GDP, the industrial sector is even the most important sector of the economy. The industrial companies include numerous successful niche players, among them many world market leaders in their industries such as Hilti, Hoval, Neutrik, Hilcona, Ivoclar Vivadent, Ospelt, and Kaiser. Liechtenstein is accordingly one of the most industrialised countries in Europe. The financial sector contributes 24% to GDP and is the second most important sector of the economy.
Liechtenstein's borders have remained unchanged since the Principality was founded 300 years ago. An economic upswing that has been sustained for many years, a well-developed social welfare state, balanced public finances, low unemployment, and one of the highest per capita incomes in the world are some of the factors responsible for this unique political stability. Alongside these factors, Liechtenstein's special form of government – a combination of democracy and monarchy – has also had a beneficial impact on stability. The strong political position of the Reigning Prince, extensively developed direct-democratic rights, a lay parliament, and a lean government ensure that a broad consensus is sought on all important matters and that there are no abrupt changes of direction. The close social, neighbourly, and even family ties in this small country of just under 40 000 inhabitants also have a positive impact on stability in Liechtenstein. The originally agricultural country has been able to maintain this closeness and cohesion despite the strong economic diversification of the past 50 years and the high level of immigration in the course of the economic upswing.
Liechtenstein's system of political parties is another guarantor of a high level of political stability. Since 1938, the two large parties in the middle of the political spectrum – the Progressive Citizens' Party (FBP) and the Patriotic Union (VU) – have governed almost continuously in a coalition.
Sustainability has long been part of the DNA of Liechtenstein, its people, and its banks. Liechtenstein is the only country in the world that can call itself an "Energy Country". The label symbolises how an ecological sense of responsibility is broadly enshrined in both politics and the population. Liechtenstein has launched public-private partnerships in two other areas: firstly, the Waterfootprint Liechtenstein initiative launched in March 2019. With this campaign, Liechtenstein is the first country in the world to provide access to clean drinking water to one person affected by water poverty for each of its inhabitants. This goal was already achieved in March 2021. The second lighthouse project is the Liechtenstein Initiative against human trafficking and modern slavery, also referred to as the FAST Initiative. FAST stands for Finance Against Slavery and Trafficking. The initiative is a partnership of several countries with the United Nations University Centre for Policy Research and a consortium of banks, philanthropic foundations, and associations. It is estimated that slavery and human trafficking account for about USD 150 billion worldwide each year. Studies show that modern slavery and human trafficking are now the most common predicate offences of money laundering and terrorist financing in the world. It is all the more important that broadly diversified economies such as Liechtenstein, with its strong industrial and financial centre, take action here. All of this shows that Liechtenstein conceptualises sustainability not only as climate protection, but also more broadly. The guiding principles are the UN's 17 Sustainable Development Goals (SDGs)
Sustainability is an integral part of the corporate culture of Liechtenstein banks. Their business models have a long-term focus, and all banks distance themselves from short-term profiteering. The banks' sense of responsibility is not only reflected in their broad engagement through their own public-benefit foundations, their membership in a wide range of international standard-setters and professional organisations such as UN PRI, UN PRB, UN Global Compact, CDP, etc., and the involvement of all three major banks in the Swiss and Liechtenstein Climate Foundations, but is also firmly enshrined in the banks' core business. The Liechtensteinische Landesbank, for example, has been offering an environmental and renovation mortgage based on a sustainability model since 2004, and its sustainability reporting is based on the standards of the globally recognised Global Reporting Initiative (GRI). As the largest and most international banking group, LGT has been a pioneer in sustainability for years. It already introduced its own sustainability rating in 2017, has been offering its private clients active asset management solutions since 2019 with a focus on sustainability, and engages in sustainability at many levels, including through LGT Venture Philanthropy and its sister company Lightrock formed in 2021, through which LGT bundles all of its direct impact investing activities under a single roof.
Much is also being done at the level of the Liechtenstein Bankers Association (LBA). The LBA has been an active member of the international Financial Centres for Sustainability (FCS4) network since April 2018 and is also actively involved in the various sustainability committees of the European Banking Federation (EBF). It goes without saying that it also supports the efforts at the European level for a uniform taxonomy. The LBA is aware that much still needs to be done. Especially in the core business of Liechtenstein banks – investment advice and asset management – as well as in investment funds, the range of products and services must be further expanded. Liechtenstein's banking centre is aware of these challenges and will further intensify its efforts in this field.
With the Liechtenstein Declaration of 2009, the country committed itself to complying with international tax standards. Since then, the entire financial centre has pursued a clear strategy of transparency and tax cooperation guided by international standards. The most important milestone of this strategy was the commitment of Liechtenstein and its financial sector in 2013 to automatic exchange of tax information (AEOI). Liechtenstein advocated for a uniform, global standard and at the same time committed to early implementation as an early adopter. Not only in tax matters, but also in the fight against money laundering, corruption, and financing of terrorism, Liechtenstein abides by international standards – alongside regulatory requirements of the EU – and pursues a zero tolerance policy. While Liechtenstein is not a member of the Financial Action Task Force (FATF), the country has been an active member of MONEYVAL for many years. MONEYVAL was founded in 1997 and is the Council of Europe's Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism. An FATF-Style Regional Body (FSRB), MONEYVAL regularly assesses and reports to the FATF on whether Liechtenstein's defensive mechanisms meet the FATF standards.
The term "cross-generational" is exemplary for banking in Liechtenstein in three ways. Firstly, financial centre participants in Liechtenstein traditionally take a long-term, cross-generational view when serving clients. This has allowed them to build up comprehensive expertise on questions of wealth for families, entrepreneurs, and institutions. Secondly, sustainable action and thinking have always been part of Liechtenstein banks' DNA. Sustainability is an integral part not only of the banks' investment philosophy, but also of their corporate culture. This is reflected in the banks' broad engagement through their own public-benefit foundations, the membership and integration of all three major banks in the Swiss and Liechtenstein Climate Foundations, the wide range of energy-efficient and resource-preserving operational, mobility, procurement, and building management measures, but also in climate neutrality and high corporate governance standards. Sustainability is firmly enshrined in the banks' core business. The Liechtenstein banks pursue a comprehensive sustainability approach that is guided not only by the Paris climate goals, but also by the UN's 17 Sustainable Development Goals (SDGs). An example is the banks' support for the initiative against modern slavery and human trafficking (FAST), which Liechtenstein co-founded. Thirdly, the Liechtenstein banking centre puts its own values and self-conception into practice by always fulfilling its social responsibility when providing services. A good example is the Villa Wirbelwind day care centre opened by the Bankers Association in 2017, thanks to which bank employees are better able to reconcile their work and family life.
Liechtenstein is an attractive centre for education, offering a high-performing and multifaceted education system. Each year, about CHF 200 million is invested in education. The school system is defined in the constitution as a responsibility of the state. But not only the compulsory school system and the very successful dual education and vocational training system are important cornerstones of this success. Research and academia are equally important. They are an investment in the future, ensuring innovation in the economy, the state, and society. With 60 patent applications per 1 000 inhabitants, Liechtenstein even surpasses Switzerland as the world champion in patents. The University of Liechtenstein meets the challenges of a constantly changing world through basic and continuing education, research, and knowledge and technology transfer. It has offered doctoral programmes since 2008, and its enrolment in 2020 was more than 700 students. The university makes a significant contribution to ensuring that Liechtenstein has highly qualified specialists at its disposal. Liechtenstein makes targeted efforts to quickly and efficiently translate research findings into technologies and to integrate them into economic growth areas with new jobs. The increasingly complex international asset management business of the banks also benefits from this broad and at the same time specialised range of educational opportunities.
