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Banking Regulations in Liechtenstein

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Initial Capital Requirements

A fundamental aspect of banking regulations in Liechtenstein is the initial capital requirement for banks and investment firms. The following key points outline this regulation:

  • Minimum Capital Requirement: The initial capital of a bank or investment firm must not be less than 1 million Swiss francs (or its equivalent in euros or US dollars).
  • Flexibility: The FMA has the power to reduce the amount of the initial capital in certain cases.

Rules Governing Banks’ Relationships with Customers and Third Parties

While there is no specific law governing the relationship between banks, customers, and third parties, the following general rules apply:

  • General Contract Law: The general rules and provisions on contracts and legal transactions (ABGB) govern these relationships.
  • Contract of Mandate: A contract of mandate (agency agreement) is commonly used in banking business.

General Terms and Conditions

Banks in Liechtenstein typically have their own General Terms and Conditions that they use for customer relationships. These terms must meet certain criteria:

  • Fairness: The terms must not be detrimental to the customer.
  • Balance of Rights and Obligations: The terms must not cause a substantial imbalance of contractual rights and obligations.

Cross-Border Banking Activities

Banks operating in Liechtenstein must comply with specific regulations regarding cross-border banking activities:

  • License Requirements: A bank can take up its business in Liechtenstein only on the basis of a license issued by the FMA (Financial Market Authority).
  • EEA Countries: Banks from EEA countries may also operate in Liechtenstein under the freedom to provide services, provided they notify the FMA prior to their first-time activity.
  • Third Countries: Banks from third countries must establish a branch in Liechtenstein and obtain a license from the FMA.

Conciliation Board

The conciliation board is an extrajudicial body that settles disputes between customers and banks about the services provided by the bank. The conciliation board acts as a mediator, but neither the bank nor the customers are bound to accept any generated solution.

Note: This article provides a general overview of banking regulations in Liechtenstein. It’s essential to consult with the relevant authorities or a qualified professional for specific guidance on these regulations.