Subchapters:
- Business Relationships
- Foreign direct investment
- FTAs and Treaties
- Development Cooperation
- Prospective fields of study (MOP)
Business relations
Trade relations with the EU
Liechtenstein /Li/ is not a member state of the EU, but is its close economic and political partner within the EFTA – member since 1991, and EEA – member since 1995. Most aspects of relations between Li and the EU are governed by the EEA Agreement, which through Li gains access to the common market of the 31 member countries of the EEA. Since December 2011, Li has also been an associate member of the Schengen Area and fully participates in the Dublin Asylum Competency System.
- Allcountrylist: Overview of major industries in Liechtenstein, including mining, construction, transportation, tourism, and foreign trade.
In 2020, exports of goods from Li developed negatively with almost all trading partners. According to continents, however, exports to European countries decreased the least. Most of Liechtenstein’s exports go to EU countries. In 2020, this share was 63.2%. Liechtenstein’s most important trade partners from EU member states are Germany (25.2%), Austria (10.7%) and France (8.0%).
Most of Liechtenstein’s imports also come from EU countries. Most goods were imported from Germany (34.6%) and Austria (21.5%).
In 2020, goods worth CHF 1,232 million were imported from the EU to Liechtenstein, while goods worth CHF 1,648 million were exported from Liechtenstein to the EU in the same year. Li thus shows a positive trade balance with the EU in 2020 (+ CHF 416 million).
The positive foreign trade balance was mainly caused by surpluses in trade relations with France (+ CHF 213 million).
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Exports to the EU (million CHF) | ON | ON | ON | 1,648.0 | ON |
| Imports from the EU (million CHF) | ON | ON | ON | 1,232.0 | ON |
| Balance with the EU (CHF million) | ON | ON | ON | 416.0 | ON |
Source: Swiss Customs (data taken by the Statistical Office of Liechtenstein)
Trade relations with the Czech Republic
Liechtenstein is not one of the important trading partners of the Czech Republic, it has long been around the 100th position among the trading partners of the Czech Republic with a share of roughly 0.01% of the total turnover of foreign trade of the Czech Republic. The growing trend of mutual trade since 2003 was interrupted in 2008 and 2009 by the consequences of the economic crisis. Between 2010 and 2019, the Czech Republic’s trade balance was negative from Liechtenstein’s point of view. In 2021, the Czech Republic imported goods worth 348,032 thousand from Liechtenstein. CZK. Industrial consumer goods accounted for the largest share of imports. In the same year, the Czech Republic exported goods worth 303,705 thousand to Liechtenstein. CZK. The largest share of exports was made up of machinery and means of transport.
Liechtenstein thus reported a positive trade balance with the Czech Republic in 2021 (CZK 44,327,000).
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Exports from the Czech Republic (billion CZK) | 0.4 | 0.4 | 0.3 | 0.3 | 0.3 |
| Imports to the Czech Republic (billion CZK) | 1 | 0.3 | 0.3 | 0.3 | 0.3 |
| Balance with the Czech Republic (billion CZK) | 0.2 | -0.1 | 0 | 0 | 0 |
Source: CZSO
Trade relations with countries outside the EU
Approximately 18.3% of Liechtenstein’s exports went to the American continent and 16.6% to Asia. The main destinations of Liechtenstein products outside Europe in 2020 were the USA (13.9%), approximately 7.1% of Liechtenstein exports went to China in 2020.
The share of imports from Asian countries in 2020 was 15.2%, while 6.5% of goods were imported from America. Of this, a total of 9.4% of Liechtenstein’s imports came from China and 6.1% from the USA.
In 2020, goods worth CHF 415 million were imported from non-EU countries to Liechtenstein, while goods worth CHF 1,191 million were exported from Liechtenstein to non-EU countries in the same year. Liechtenstein also has a positive trade balance with countries outside the EU in 2020 (+ CHF 776 million).
The positive balance of foreign trade was mainly caused by surpluses in trade relations with the USA (+CHF 298 million).
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Export to countries outside the EU (million EUR) | ON | ON | ON | 1,191.0 | ON |
| Import from non-EU countries (million EUR) | ON | ON | ON | 415.0 | ON |
| Balance with non-EU countries (million EUR) | ON | ON | ON | 776.0 | ON |
Source: Swiss Customs (data taken by the Statistical Office of Liechtenstein)
Foreign direct investment
Liechtenstein invested more capital abroad than foreign countries invested in Liechtenstein. This fact is primarily due to Liechtenstein’s decades-long trade surplus. However, exact data cannot be given because Liechtenstein does not have its own balance of payments and the Swiss National Bank does not provide separate information about Liechtenstein. Some foreign central banks nevertheless publish economic exchange with Liechtenstein. For example, Liechtenstein direct investment in Germany reached CHF 6.0 billion in 2017, in Austria CHF billion in 2018, and in the USA in 2017 CHF 0.3 billion.
In contrast, the direct investments of these countries in Liechtenstein are significantly lower. The Bank of England, for example, reports that in 2017 Great Britain’s FDI in Liechtenstein reached CHF 0.9 billion. Information regarding the investment of other countries in Liechtenstein is not available to the ZÚ Bern.
In 2021 or at present, we have not recorded any significant FDI from the Czech Republic in Liechtenstein.
FTAs and treaties
Treaties with the EU
Since 1995, the EU and Liechtenstein have been close economic and political partners in the EEA. Most aspects of mutual relations are governed by the EEA agreement, namely:
• participation in the EU internal market,
• participation in EU agencies and EU programs,
• Liechtenstein’s financial contribution to economic and social cohesion in the EU and the EEA. The EU and Liechtenstein have signed an agreement on the automatic exchange of information in tax matters, which facilitates the fight against tax evasion. This agreement is valid from 2017.
Contracts with the Czech Republic
The contractual relations of the Czech Republic with LI are based on international bilateral and multilateral contractual documents by which both countries are bound. Those parts of the EU acquis are also relevant for them, which, based on the contractual relations between the EU and CH, are also reflected in the bilateral relations of individual member states with CH and LI. Indeed, some international agreements concluded by CH also apply to LI, such as the Agreement between the Government of the Czech Republic and the Swiss Federal Council on mutual abolition of the visa requirement.
The most important bilateral documents include the Memorandum on future cooperation on the occasion of the establishment of diplomatic relations between the Czech Republic and Lithuania from September 2009 and the Agreement between the Czech Republic and Lithuania on the prevention of double taxation and prevention of tax evasion in the field of income and property taxes from September 2014, which prevents so that income and assets are taxed in both states.
The Czech Republic is participating in the negotiation of the Agreement between the EU and Liechtenstein on the fight against fraud and other illegal activities. From the beginning of the discussion of the text, the Czech Republic took the position that states interested in close cooperation with the EU and its member states should accept conditions similar to those applied in the EU.
Developmental cooperation
Liechtenstein’s official development assistance (ODA), which includes development cooperation projects, aid in the event of natural disasters, but also the costs of caring for asylum seekers in the country, reached CHF 2million in 2020 according to the OECD (roughly 0.5 % of GDP). However, Liechtenstein’s long-term goal is to increase its contributions to up to 0.7% of GDP. [VI1] Data for 2021 are not available.
Prospective fields of study (MOP)
Liechtenstein invests 8.4% of GDP (approx. CHF 450 million) annually in research and development, making it one of the world leaders in this field. This small European country can rightly be called a center for innovation and technological development. The state generously supports the innovation of start-ups and small and medium-sized enterprises.
ICT
Liechtenstein places great emphasis on the development of the ICT sector. With the pandemic crisis, the importance of digitization came to the fore. In the field of ICT, software, antivirus, intelligent applications and others are in demand, e.g. cloud services, e-commerce, web design, e-learning, e-games, etc.
Services
Services in the financial sector are particularly promising. Liechtenstein is a very interesting destination for ambitious FinTech projects.
On 01/01/2020, the Blockchain Act came into force, making Liechtenstein the first country in the world to officially use cryptocurrencies. Thanks to its uniqueness in access to cryptocurrencies, it is slowly but surely becoming the most attractive country in the world for emerging projects based on the breakthrough blockchain technology.
