Lex Mundi Global Foreign Investment Restrictions Guide |
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Liechtenstein |
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(Europe)
Firm
Marxer & Partner
Contributors
Michael Grabher |
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| Please provide a short summary of the Foreign Investment Restrictions adopted by your jurisdiction. | Generally, it has to be noted that there is no national antitrust law or merger control law in place in Liechtenstein. Aside from restrictions on the acquisition of domestic real estate by foreigners, there are currently no legal provisions effective in Liechtenstein that would explicitly and/or solely restrict foreign investors from investments in Liechtenstein. However, authorizations may be required in certain regulated areas such as:
Further authorization and or licensing requirements may also apply with regard to the energy or aviation sectors. In general, the respective investments are subject to the supervision of an official control authority, which may, under certain preconditions, review investment transactions and, if it deems it necessary pursuant to the respective legal provisions, object to such transactions. |
| Is your regime focused on economic protectionism, national security, or a combination? | Apart from the real estate sector Liechtenstein encourages foreign investment and is not protectionistic. Liechtenstein law safeguards public order and economic stability for all investors irrespective of foreign or domestic origin. |
| Who is considered a "foreign investor" and are only investments from particular countries covered? | With regard to the acquisition of domestic real estate, it has to be noted that EEA nationals are entitled to acquire real estate in Liechtenstein under the same conditions as Liechtenstein nationals. Swiss nationals are entitled to acquire real estate for residential purposes in Liechtenstein under the same conditions as Liechtenstein nationals; however, certain restrictions apply. Third-country nationals face heavier restrictions, particularly related to the duration of their legal residence in Liechtenstein. The relevant provisions concerning the other sectors referred to under question 1 do not provide for any distinction with regard to the origin of the respective investor. |
| What sectors are subject to Foreign Investment Restrictions screening? | As already stated above, aside from the restrictions on the acquisition of domestic real estate by foreigners, there are no legal provisions in Liechtenstein that would explicitly and/or solely restrict foreign investors from investments in Liechtenstein. Sectors that under certain preconditions are subject to investment screening without any explicit foreign investment connection are in particular:
Further authorization and or licensing requirements may also apply with regard to the energy or aviation sector. |
| What are the relevant thresholds? | There is no general threshold that would apply to all relevant sectors. However, thresholds may be defined separately per each sector. For example regarding the banking/insurance/asset management sector: Any intended direct or indirect acquisition and any intended direct or indirect sale of 10% or more in a bank, investment firm, insurance company or asset management company must be reported to the Liechtenstein Financial Market Authority ("FMA") in writing by the person or persons interested in the acquisition and sale. Likewise, any intended direct or indirect increase or any intended direct or indirect reduction of qualified stake ownership (10% or more) must be notified to the FMA if, as a result of the increase or reduction, the thresholds of 20%, 30% or 50% of the capital or voting rights of the bank, investment firm, insurance company or asset management company are reached, exceeded or fallen below, or if the bank, investment firm, insurance company or asset management company would become a subsidiary of an acquirer or would no longer be a subsidiary of the seller. |
| Is notification under Foreign Investment Restriction rules mandatory? | The notification duties are specifically regulated for each relevant sector. See examples displayed in the answers to the questions to follow. |
| Is the relevant authority's approval required prior to closing? | Whether the approval of the competent authority must be obtained prior to the closing of the respective investment agreement is regulated by the legal provisions for the respective sector. In respect of the acquisition of real property: Pursuant to Art. 15 of the Land Transfer Act, legal transactions requiring the approval of the land transfer authority must be submitted to the land transfer authority within four months of their conclusion, otherwise, they become null and void. Legal transactions requiring approval remain ineffective as long as the approval has not been obtained. In respect of the banking/insurance/asset management sector: The FMA must be notified of any intended acquisition or increase of qualified stake ownership prior to closing. In the course of the assessment procedure, the FMA may object to the intended direct or indirect acquisition or increase of such stake ownership. If stake ownership is acquired or increased despite an objection by the FMA, the voting rights of the buyer may not be exercised until the objection is amended or overturned on appeal or the objection is withdrawn by the FMA. Any voting rights exercised nevertheless shall be null and void. |
| What was the impact of COVID-19 on your foreign investment regime? | The COVID-19 pandemic had no impact on the Liechtenstein foreign investment regime. Liechtenstein has not adopted any foreign investment regulations specifically with regard to the COVID-19 pandemic. |
| How active has your agency been in reviewing, delaying, modifying or blocking foreign investments? | The Liechtenstein government does not actively seek to delay or block foreign investment. |
| On what grounds can enforcers review and block a foreign investment? How active have they been in the past 6 months? | Aside from restrictions on the acquisition of domestic real estate by foreigners, there are currently no legal provisions effective in Liechtenstein that would entitle the competent authority to explicitly and/or solely review and block foreign investors from investments in Liechtenstein. In respect of the banking/insurance/asset management sector: The FMA reviews the suitability of any interested buyer irrespective of foreign or domestic origin and the soundness of the intended acquisition or increase in the interest of a sound and prudent management of the respective bank, investment firm, insurance company or asset management company in which the acquisition or increase is intended, also taking into account the likely influence of the interested buyer on the respective bank, investment firm, insurance company or asset management company. |
| Do you expect any regulatory developments over the next 6 months? | In early 2020, the Swiss Parliament instructed the Swiss Federal Council to create a legal basis for controlling foreign investments. The debate in the Swiss parliament has shown that the Swiss parliament requires an effective and administratively lean investment control. The Swiss Federal Council is currently in the process of implementing this mandate. Since Liechtenstein follows the guidelines of Switzerland or Austria upon many occasions in developing its legal system, it remains to be observed whether the aforementioned developments in Switzerland will result in any innovations in Liechtenstein. |
Lex Mundi Global Foreign Investment Restrictions Guide
Generally, it has to be noted that there is no national antitrust law or merger control law in place in Liechtenstein.
Aside from restrictions on the acquisition of domestic real estate by foreigners, there are currently no legal provisions effective in Liechtenstein that would explicitly and/or solely restrict foreign investors from investments in Liechtenstein.
However, authorizations may be required in certain regulated areas such as:
- Banking;
- Insurance;
- Asset Management;
- Real estate;
- Media.
Further authorization and or licensing requirements may also apply with regard to the energy or aviation sectors.
In general, the respective investments are subject to the supervision of an official control authority, which may, under certain preconditions, review investment transactions and, if it deems it necessary pursuant to the respective legal provisions, object to such transactions.
Apart from the real estate sector Liechtenstein encourages foreign investment and is not protectionistic. Liechtenstein law safeguards public order and economic stability for all investors irrespective of foreign or domestic origin.
With regard to the acquisition of domestic real estate, it has to be noted that EEA nationals are entitled to acquire real estate in Liechtenstein under the same conditions as Liechtenstein nationals. Swiss nationals are entitled to acquire real estate for residential purposes in Liechtenstein under the same conditions as Liechtenstein nationals; however, certain restrictions apply. Third-country nationals face heavier restrictions, particularly related to the duration of their legal residence in Liechtenstein.
The relevant provisions concerning the other sectors referred to under question 1 do not provide for any distinction with regard to the origin of the respective investor.
As already stated above, aside from the restrictions on the acquisition of domestic real estate by foreigners, there are no legal provisions in Liechtenstein that would explicitly and/or solely restrict foreign investors from investments in Liechtenstein.
Sectors that under certain preconditions are subject to investment screening without any explicit foreign investment connection are in particular:
- Banking;
- Insurance;
- Asset Management;
- Real estate;
- Media.
Further authorization and or licensing requirements may also apply with regard to the energy or aviation sector.
There is no general threshold that would apply to all relevant sectors. However, thresholds may be defined separately per each sector.
For example regarding the banking/insurance/asset management sector:
Any intended direct or indirect acquisition and any intended direct or indirect sale of 10% or more in a bank, investment firm, insurance company or asset management company must be reported to the Liechtenstein Financial Market Authority ("FMA") in writing by the person or persons interested in the acquisition and sale. Likewise, any intended direct or indirect increase or any intended direct or indirect reduction of qualified stake ownership (10% or more) must be notified to the FMA if, as a result of the increase or reduction, the thresholds of 20%, 30% or 50% of the capital or voting rights of the bank, investment firm, insurance company or asset management company are reached, exceeded or fallen below, or if the bank, investment firm, insurance company or asset management company would become a subsidiary of an acquirer or would no longer be a subsidiary of the seller.
The notification duties are specifically regulated for each relevant sector. See examples displayed in the answers to the questions to follow.
Whether the approval of the competent authority must be obtained prior to the closing of the respective investment agreement is regulated by the legal provisions for the respective sector.
In respect of the acquisition of real property:
Pursuant to Art. 15 of the Land Transfer Act, legal transactions requiring the approval of the land transfer authority must be submitted to the land transfer authority within four months of their conclusion, otherwise, they become null and void. Legal transactions requiring approval remain ineffective as long as the approval has not been obtained.
In respect of the banking/insurance/asset management sector:
The FMA must be notified of any intended acquisition or increase of qualified stake ownership prior to closing.
In the course of the assessment procedure, the FMA may object to the intended direct or indirect acquisition or increase of such stake ownership.
If stake ownership is acquired or increased despite an objection by the FMA, the voting rights of the buyer may not be exercised until the objection is amended or overturned on appeal or the objection is withdrawn by the FMA. Any voting rights exercised nevertheless shall be null and void.
The COVID-19 pandemic had no impact on the Liechtenstein foreign investment regime. Liechtenstein has not adopted any foreign investment regulations specifically with regard to the COVID-19 pandemic.
The Liechtenstein government does not actively seek to delay or block foreign investment.
Aside from restrictions on the acquisition of domestic real estate by foreigners, there are currently no legal provisions effective in Liechtenstein that would entitle the competent authority to explicitly and/or solely review and block foreign investors from investments in Liechtenstein.
In respect of the banking/insurance/asset management sector:
The FMA reviews the suitability of any interested buyer irrespective of foreign or domestic origin and the soundness of the intended acquisition or increase in the interest of a sound and prudent management of the respective bank, investment firm, insurance company or asset management company in which the acquisition or increase is intended, also taking into account the likely influence of the interested buyer on the respective bank, investment firm, insurance company or asset management company.
In early 2020, the Swiss Parliament instructed the Swiss Federal Council to create a legal basis for controlling foreign investments. The debate in the Swiss parliament has shown that the Swiss parliament requires an effective and administratively lean investment control. The Swiss Federal Council is currently in the process of implementing this mandate.
Since Liechtenstein follows the guidelines of Switzerland or Austria upon many occasions in developing its legal system, it remains to be observed whether the aforementioned developments in Switzerland will result in any innovations in Liechtenstein.