LIECHTENSTEIN Law and Practice Contributed by: Christian Inmann and Markus Stelzl, Inmann Stelzl & Partner Attorneys at Law Partnership
4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities In Liechtenstein, there are clear regulatory distinctions between loans to individuals and loans to (small) busi - nesses or other non-consumer borrowers. • Loans to individuals (consumer loans) are subject to strict consumer protection rules, primarily under the Liechtenstein Civil Code, the Liechtenstein Consumer Protection Act and the Consumer Credit Act. These laws impose requirements for trans - parency, disclosure obligations, creditworthiness assessments and provide for specific withdrawal rights. Mortgage or real estate-related loans are additionally governed by the Mortgage and Real Estate Credit Act, which sets specific rules for loan conditions, repayment and borrower protection. • Loans to (small) businesses and other commercial entities are generally treated as commercial loans. These are less heavily regulated, and many con - sumer-specific protections do not apply, allowing for greater contractual flexibility. Depending on the size of the lender and its portfolio, the Banking Act may impose obligations for the lender. This may include concentration limits and risk management requirements. 4.2 Underwriting Processes In Liechtenstein, underwriting processes depend on the underwriting entity, but are primarily guided by risk and creditworthiness assessment and regulatory requirements under the DDA and related financial market laws. While the regulations set minimum standards, larg - er institutions often have internal guidelines for the underwriting process, which set additional standards. Further, when it comes to consumer loans, these pro - cesses are also heavily shaped by consumer protec - tion laws.
4.3 Sources of Funds for Fiat Currency Loans In Liechtenstein, fintech lenders can source fiat funds for loans through several channels, each carrying dis - tinct legal and regulatory implications. • Peer-to-peer (P2P) lending – funds are pro - vided directly by individuals via digital platforms. Depending on the final structure, these platforms may require a licence and/or be considered credit brokerage under the Liechtenstein Banking Act or a financial intermediary, if the investment instru - ments offered to lenders qualify as securities. • Lender-raised capital/institutional funding – funds can be raised by a fintech from investors by way of equity or debt financing. While this reduces regula - tory complexity compared with public funding, the lender must still comply with securities regulation, AML/CFT obligations and ensure proper creditwor - thiness assessments. • Taking deposits – accepting deposits from the public constitutes a regulated banking activity under the Liechtenstein Banking Act. Only licensed banks or authorised institutions may take deposits, subject to strict prudential, capital and reporting requirements. Non-bank fintech lenders generally cannot accept deposits without a banking licence. Each funding source triggers different regulatory obli - gations, with deposit-taking being the most heavily regulated, while P2P and institutional funding require, in particular, robust AML compliance and investor protection measures. Fintech lenders must carefully structure their operations to align with the applicable legal framework. 4.4 Syndication of Fiat Currency Loans Loan syndication can occur in Liechtenstein, though it commonly only takes place for larger commercial or institutional loans. Fintech companies in Liechtenstein are typically not involved in loan syndication of fiat loans. This is typically a business of legacy players.
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