Liechtenstein Tightens Banking Regulations to Prevent Financial Crime
Introduction
In a bid to strengthen its financial reputation and comply with international regulations, Liechtenstein has implemented stricter banking rules aimed at preventing financial crime. This tiny European microstate, known for its banking secrecy, is working to shed its reputation as a haven for wealthy individuals seeking asset protection.
A Changing Landscape in Banking
The country’s banking sector, once known for its secrecy and flexibility, is now subject to stricter regulations. Key Changes Include:
- Anonymous accounts are no longer allowed
- Non-residents, including US citizens, face significant hurdles in opening new accounts
- Banks operating in Liechtenstein must disclose account holders’ information to foreign governments upon request
The Impact on Banking Fees and Services
Banking fees in Liechtenstein are higher than those in other European countries. Foreign account holders may also find it challenging to manage their accounts, as the country’s banks operate under a stricter model of wealth management.
Key Points:
- No longer a bank that offers cheap transactions
- Focus on old European model of wealth management
Foundations in Liechtenstein: A Viable Option
Despite the challenges facing banking in Liechtenstein, the country remains a popular destination for setting up foundations. Foundations are solid asset protection vehicles that offer limited liability and capital preservation.
Key Points:
- Require a minimum of 30,000 Swiss francs in assets to set up
- Designed for the same purposes as any foundation
- Cannot be redomiciled or moved to a new jurisdiction
Residence and Citizenship: A Limited Opportunity
For those looking to move to Liechtenstein, the opportunities are limited. The country has a population of just 37,000, and only approximately 28 EU nationals are allowed to obtain work permits each year.
Key Points:
- Only 28 EU nationals can obtain work permits each year
- Obtaining citizenship is difficult, requiring at least 30 years of residency or marriage to a citizen
- Dual citizenship not allowed
- Applicants must be able to speak German fluently
Conclusion
While Liechtenstein may still offer some opportunities for asset protection and wealth management, the country’s banking regulations have become significantly more stringent in recent years. Foreign account holders should no longer expect to enjoy the same level of anonymity and flexibility as in the past.