Financial Crime World

Liechtenstein Cracks Down on Banking Secrecy: Compliance Procedures in Place

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A Shift in Strategy: From Tax Haven to Transparent Hub

Vaduz, Liechtenstein - In a bid to shed its reputation as a tax haven and comply with increasingly stringent EU and US regulations, the principality of Liechtenstein has introduced robust compliance procedures for banking activities. This move aims to deter foreigners from seeking asset protection through secretive bank accounts.

Compliance Procedures in Place

The new measures include:

  • Stringent verification of client identities and beneficial ownership information
  • Regular reporting to local authorities on account holders’ activities
  • Disclosure of account holder details upon request from foreign governments

These changes have made banking in Liechtenstein less appealing to Westerners, who are accustomed to the ease with which they can manage their finances abroad.

No Longer a Secretive Haven

“Banking secrecy is a thing of the past in Liechtenstein,” said a financial expert. “If you’re looking for anonymity or attempting to avoid laws from your home country, this isn’t the place to do it.”

Foundations Remain Viable Option for Asset Protection

Foundations remain an attractive option for those seeking asset protection, despite added costs and regulatory requirements.

  • Ingvar Kamprad, founder of IKEA, utilizes a Liechtenstein foundation to manage his company’s intellectual property rights.
  • A local attorney specializing in private foundations noted that while the benefits and drawbacks should be carefully considered before proceeding, these vehicles remain an attractive option for asset protection.

Residency and Citizenship: Restrictive Requirements

Residency and citizenship in Liechtenstein are restricted:

  • Only approximately 28 EU nationals are allowed to obtain work permits each year.
  • Obtaining citizenship requires a minimum of 30 years’ residency or, alternatively, marrying a citizen and maintaining continuous residence for five years.

Conclusion

Liechtenstein’s tough stance on banking secrecy has made it less appealing as an offshore wealth hub. However, those willing to navigate the country’s complex regulations may still find it an attractive destination for asset protection.