Navigating the Liechtenstein Trade Act: An Outline for Permit-Obliged and Notification-Obliged Businesses

Josef Bergt
2023

As of 2021 some significant changes in the landscape of the Liechtenstein Trade Act have taken effect since. The Liechtenstein Trade Act and Trade Ordinance legislation now delineate two critical categories, namely permit-obliged and notification-obliged trades. These reformations have established a pivotal role for the Liechtenstein Office of Economic Affairs, vested with the responsibility to oversee and regulate these trades. This discussion aims to provide an interpretation of these shifts to the business landscape of Liechtenstein. The trade regulations apply to all activities carried on commercially within Liechtenstein and which are not prohibited by law, whereas an activity is deemed to be carried out commercially if it is conducted independently, regularly and with the intention of obtaining a profit or other economic advantage, irrespective of the purposes for which it is intended. Independence within the meaning of this regulation shall be fulfilled if the activity is carried out on one's own account and at one's own risk. A regular activity shall also be deemed to be a one-time action if the intention to repeat it can be inferred from the circumstances of the case or if it requires a longer period of time.

Simple trades or notification-obliged trades, falling under the notification-obliged business category, require no application for trading permits. Entrepreneurs intending to initiate a trade that is not subject to the permit-obliged category must take steps to register their business, notwithstanding the pending review of prerequisites by the Office for National Economy.

Opposing this, permit-obliged or qualified trades (e.g., electronics technicians or professionals in the hospitality industry amongst others) necessitate the submission of an application for the issuance of a trade permit, making the distinction clear between these two classes. If your intention is to engage in a permit-obliged industry, the preliminary stage involves the submission of an application complemented with suitable documents.

Notably, businesses, when ready for operation, and once the required documents are appropriately submitted, can initiate their notification-obliged trade, even if the Office of Economic Affairs has not yet scrutinized the prerequisites of the notification.

Conversely, permit-obliged businesses have to bide their time and wait for the Office of Economic Affairs official approval, examining the prerequisites before commencing their business operations.

For notification-obliged businesses, the required documents include a valid identity document for Liechtenstein citizens, EEA nationals, and Swiss nationals. Even for third-country nationals, an uninterrupted residence for at least five years in Liechtenstein is essential. Furthermore, registered companies need to provide a commercial register extract to validate operational competence. In essence, no entity can exercise their trade until the preconditions for exercising it are fulfilled, accompanied by completed registration with complete documentation. Additionally, a criminal record extract not older than three months as well as an excerpt from the debt collection and seizure register not older than three months are required as well as a plan of the business premises along with a rental agreement and an exact description of the business purpose and finally the payment of the fees.

For companies planning to operate within the permit-obliged trade category, the document requirements are somewhat similar to the notification-obliged businesses. However, they also need to provide documents proving their technical suitability, such as diplomas or examination certificates, and previous employment confirmations or references if required.

Any entrepreneur who conducts commercial activities without proper authorization incurs a fine of up to CHF 20’000. The activities within the notification-obliged trades can only be executed when the conditions for their exercise are fulfilled, even if the Office of Economic Affairs has not checked the prerequisites yet.

The submission cost for notification-obliged businesses is CHF 250 for natural persons and CHF 500 for legal entities, while it is CHF 500 and CHF 1’000, respectively, for permit-obliged trades.

Businesses must report any changes in business purpose, business management, or operations management, place of business, or delivery address to the Office of Economic Affairs. If the aforementioned changes apply to permit-obliged trades, their implementation requires the prior approval of the Office of Economic Affairs.

It is permissible to surrender one’s trade authorization or put it on temporary hold, which must be conveyed to the Office of Economic Affairs. The recommencement of commercial operations is also subject to prior notice to the authority with particularly safety-critical activities being limited to maximum of five years of hiatus.

Special trades such as accountants, real estate agents, and goods traders, who are subject to due diligence duties have to demonstrate the reliability of their beneficial owners with a qualified participation of more than 25% according to Art. 3 para. 1(n, p and q) of the Liechtenstein Due Diligence Act in connection with Art 19 of the Trade Act.

Executive Summary:

• Liechtenstein Trade Act since 1st January, 2021 differentiates between permit-obliged and notification-obliged trades. 
• The Liechtenstein Office of Economic Affairs is the competent regulatory authority.
• Notification-obliged or simple trades do not require a permit but need to be registered. 
• Permit-obliged or qualified trades require an application for a trade permit. 
• Businesses can start operations in notification-obliged trade as soon as the documentation is provided to the competent authority.
• Documentation requirements include identity verification, commercial register extract, and proof of technical suitability for permit-obliged trades next to rental agreements and an extract of the criminal record of the director under trade law as well as professional qualification certificates. 
• Trade without authorization can lead to hefty fines. 
• Any change in business purpose or management must be reported. 
• Businesses can suspend their trade authorization temporarily. 
• Special provisions apply for accountants, real estate agents, and goods traders due to their duty of care as per the Due Diligence Act.
• Persons eligible as director under Liechtenstein trade law must be nationals of an EEA member state or Switzerland or third-country nationals with a permanent, uninterrupted residence of at least five years in Liechtenstein.