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Financing, investment and government support
Does the government provide any incentives or support programmes to promote fintech innovation in your jurisdiction (eg, tax incentives, grants and regulatory sandboxes)?
In general, the Liechtenstein government is very open minded towards fintech businesses. It has created a regulatory sandbox (a so-called ‘regulation laboratory’) which provides leeway, creating an environment favourable to implementation of fintech business models. At the same time, the supervisory process is designed by the Financial Market Authority in such a way that the quality characteristics of financial market supervision required in an international context can be maintained. If necessary, adjustments to the legal and supervisory framework conditions are carefully examined and then proposed for implementation.
In regards to the tax question, Liechtenstein provides a remarkably favourable environment for businesses in general, due to the mere 12.5% flat tax on corporations. Once this amount is paid, the business owes no further financial obligations to the government, as no capital gains or sales taxes are levied within the country. Further, there are plenty of incentives in terms of the presence of capital available to worthwhile ventures. This available capital is aimed at furthering investment, growth and research and development activities.
Has the government concluded any international cooperation agreements to promote and facilitate the cross-border expansion of fintech businesses?
As Liechtenstein is part of the European Economic Area, the financial markets of Liechtenstein are in harmony with EU regulations. In addition, Liechtenstein has a close relationship with Switzerland, which delivers further grounds for expansion of fintech businesses.
Ultimately, Liechtenstein’s membership of the European Economic Area creates a favourable environment for the creation of fintech start-ups, because the creation of a fintech business in Liechtenstein allows for the establishment of relationships with Switzerland as well as the European Union. In other words, by establishing a business in Liechtenstein, one has the best of both worlds, with access to benefits that would be awarded by establishing a business in Switzerland as well as those awarded to EEA member states. This creates a two-for-the-price-of-one situation, as opposed to having to choose between the benefits of incorporating in either Switzerland or an EU member state.
Financing and investment
What private financing and investment schemes are available and commonly used for fintech start-ups in your jurisdiction?
All the classic and historical finance and investment schemes available in Liechtenstein have grown into a highly sophisticated financial market. From initial public offerings to the raising of venture capital or more commonly used crowdfunding options, initial coin offerings or token generation events, the investment schemes available to start-ups are endless.
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