LIECHTENSTEIN Law and Practice Contributed by: Hannes Arnold, Thomas Nigg, Christina Pointner, Sebastian Auer, Johannes Sander, René Saurer and Marta Baftiaj, Gasser Partner
1. Legal System 1.1 Legal System and Judicial Order
stitutional jurisdiction, exercised exclusively by the Constitutional Court ( Staatsgerichtshof ). This court serves as an extraordinary court of appeal and may be petitioned against final decisions for alleged vio - lations of constitutional rights, rights guaranteed by the European Convention on Human Rights, or rights under the European Economic Area Treaty. All courts are located in Vaduz. Liechtenstein has maintained a customs union with Switzerland since 1923 and shares the Swiss franc as its currency. Since 1995, it has also been a member of the European Economic Area, giving Liechtenstein- based service providers passporting rights across the EU single market. This dual access, Swiss and Euro - pean, is unmatched by any other jurisdiction. 2. Restrictions on Foreign Investments 2.1 Approval of Foreign Investments Unlike some larger jurisdictions, Liechtenstein does not operate a general foreign direct investment screening regime. A foreign investor therefore does not generally require stand-alone investment approval merely because it is acquiring shares in, establishing or financing a Liechtenstein business. Approval requirements arise instead from sector-spe - cific regimes and rules governing particular assets. The most important practical examples are regulated financial services, including banks, investment firms, funds and insurance undertakings, where acquisitions of qualifying holdings or control (meaning in general, if the investor has at least 10% of capital or voting rights or another possibility to exercise considerable influ - ence) may require prior notification to, or approval by, the Liechtenstein Financial Market Authority (FMA). Other regulated activities, such as gambling, telecom - munications, energy or certain professional services, may also require an operating licence or regulatory consent irrespective of the investor’s nationality. Liechtenstein’s European Economic Area (EEA) mem - bership is of importance in this context: EEA investors generally benefit from the free movement of capital and establishment, but that benefit does not displace generally applicable licensing, fit-and-proper, pruden -
Liechtenstein is located at the heart of Europe, bor - dered by Switzerland and Austria. With around 40,000 residents and the highest GDP per capita in the world, the principality combines the ways of a small jurisdic - tion with genuine economic depth. Liechtenstein is a constitutional hereditary monarchy on a democratic and parliamentary basis. Under the Constitution of 1921, state power is vested jointly in the Reigning Prince, as the Head of State, and the People. The Parliament ( Landtag ) consists of 25 members elected by proportional representation for four-year terms. The Landtag proposes laws, and the government, a collegial body of five ministers includ - ing the Prime Minister, is responsible for day-to-day administration. Liechtenstein has pronounced direct democratic rights, where citizens may launch a ref - erendum to put parliamentary decisions to a popular vote or initiate constitutional amendments. For a law to enter into force, it must be approved by both Parlia - ment and sanctioned by the Reigning Prince, reflect - ing the dualistic principle of shared sovereignty. Liechtenstein is a civil law jurisdiction with strong his - toric ties to Austria and Switzerland, and their respec - tive legal traditions. The cornerstone of civil law is the General Civil Code ( Allgemeines bürgerliches Gesetz- buch , ABGB), adopted from the Austrian model and in force since 1812. Key procedural laws, including the Code of Civil Procedure (ZPO), the Jurisdiction Act (JN) and the Execution Code (EO), are also derived from Austrian law. By contrast, property law is based on the Swiss model, and company law is governed by the Persons and Companies Act ( Personen - und Gesellschaftsrecht , PGR), which draws heavily on Swiss corporate law. Employment law and social security law likewise follow the Swiss model. The Liechtenstein judicial system is organised into three main branches. The first is the ordinary jurisdic - tion for civil and criminal matters, operating through a three-tier court system. The second branch com - prises the administrative courts, with the Adminis - trative Court ( Verwaltungsgerichtshof ) as the highest administrative tribunal. The third branch is the con -
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