Subsidiaries are legal entities with capital that is partially or totally owned by foreign companies. However, the management of the subsidiary is not conditioned by the foreign capital, and the entity is able to handle business contracts, hire employees or issue and transfer shares.
Double taxation refers to the fact that two countries collect simultaneously taxes on the same company. This situation often arises when companies have subsidiaries or branches in various countries.
Due to its very favorable financial policies for foreign investors, Liechtenstein is one of the countries where it’s worth doing business, as there are many financial advantages involved.
In Liechtenstein, the main taxes levied on businesses are corporate taxes, the capital tax, the VAT and the coupon (withholding) tax. There is no separate capital gains tax. Capital gains are treated as taxable income unless they come from real estate, in which case a property profits tax is levied.
Just like in any other European country, Liechtenstein has a taxation system divided into corporate taxes, for legal entities, and individual taxes.