2018 Index of Economic Freedom

Liechtenstein

overall scoreN/A
world rank
Rule of Law

Property RightsN/A

Government IntegrityN/A

Judicial EffectivenessN/A

Government Size

Government SpendingN/A

Tax BurdenN/A

Fiscal HealthN/A

Regulatory Efficiency

Business FreedomN/A

Labor FreedomN/A

Monetary FreedomN/A

Open Markets

Trade Freedom90.0

Investment Freedom85.0

Financial Freedom80.0

Embed This Data

Create a Comparison Chart

See how Liechtenstein compares to another country using any of the measures in the Index.

vs
Close
Download PDF
Quick Facts
  • Population:
    • 38.0 billion
  • GDP (PPP):
    • $160,526 per capita
  • Unemployment:
  • Inflation (CPI):
  • FDI Inflow:
Embed This Data

Liechtenstein is not graded in the 2018 Index because of the unavailability of relevant comparable statistics on all facets of the economy. Despite its small size and lack of natural resources, Liechtenstein has developed into a prosperous, highly industrialized, free-enterprise economy with a vital financial service sector and the world’s third-highest per capita income. The country is closely linked to Switzerland, whose currency it shares, and the European Union. Liechtenstein is a member of the European Free Trade Association, the Schengen Area, and the European Economic Area.

Flexibility and openness to global commerce have been the cornerstones of Liechtenstein’s modern and widely diversified economy. Minimal barriers to trade and investment foster vibrant economic activity, and a straightforward, transparent, and streamlined regulatory system supports an innovative entrepreneurial sector. Banking has benefited from Liechtenstein’s high levels of political and social stability and its sound and transparent judicial system.

Close

Background

Prince of Liechtenstein Hans-Adam II is head of state, but his son Prince Alois wields considerable power as regent, including the ability to dismiss the government and veto bills. The center-right Progressive Citizens’ Party won a reduced share of the vote in February 2017 parliamentary elections but still won the most seats. Prime Minister Adrian Hasler, in office since 2013, remains head of the government. Traditions of strict bank secrecy have helped financial institutions to attract funds. The banking sector has largely recovered from a contraction caused by the 2008 global financial crisis. Liechtenstein signed an agreement with the EU in 2015 allowing for the automatic exchange of financial account information.

Rule of LawView Methodology

Property Rights N/A Create a Graph using this measurement

Government Integrity N/A Create a Graph using this measurement

Judicial Effectiveness N/A Create a Graph using this measurement

Property rights and contracts are secure. Despite the appointment of judges by the hereditary monarch, the judiciary is independent and impartial. Politics and society are largely free of corruption. Although Liechtenstein is a leading offshore tax haven and traditionally has maintained tight bank secrecy laws, the government has made efforts in recent years to increase transparency in banking.

Government SizeView Methodology

Liechtenstein imposes relatively low taxes on both nationals and non-nationals. The tax reform law that became effective in January 2011 has made the tax system more modern and attractive. The corporate tax rate is now a flat 12.5 percent, and capital gains, inheritance, and gift taxes have been abolished. Although the fiscal system lacks transparency, government fiscal management has been relatively sound.

Regulatory EfficiencyView Methodology

Establishing a business is fairly easy. Administrative procedures are straightforward, and regulations affecting business are transparent and applied consistently. The number of individuals employed outnumbers the domestic population. The substantial numbers of foreign workers are mainly Swiss and Austrians. Liechtenstein has a de facto monetary union with Switzerland but no role in determining the Swiss National Bank’s monetary policies.

Open MarketsView Methodology

Liechtenstein’s average applied tariff rate is 0.0 percent. Nontariff barriers impede some trade. In general, government policies do not significantly interfere with foreign investment. There are no restrictions on repatriation of profits or currency transfers. Liechtenstein is a major financial center, particularly in private banking. The banking sector remains stable under a sensible regulatory regime.

Country's Score Over Time

View Chart of Scores over Time

Regional Ranking

rank country overall change
1Switzerland81.70.2
2Ireland80.43.7
3Estonia78.8-0.3
4United Kingdom781.6
5Iceland772.6
6Denmark76.61.5
7Luxembourg76.40.5
8Sweden76.31.4
9Georgia76.20.2
10Netherlands76.20.4
11Lithuania75.3-0.5
12Norway74.30.3
13Czech Republic74.20.9
14Germany74.20.4
15Finland74.10.1
16Latvia73.6-1.2
17Austria71.8-0.5
18Macedonia71.30.6
19Romania69.4-0.3
20Armenia68.7-1.6
21Poland68.50.2
22Malta68.50.8
23Bulgaria68.30.4
24Cyprus67.8-0.1
25Belgium67.5-0.3
26Hungary 66.70.9
27Kosovo66.6-1.3
28Turkey65.40.2
29Slovakia65.3-0.4
30Spain65.11.5
31Slovenia64.85.6
32Albania64.50.1
33Montenegro64.32.3
34France63.90.6
35Portugal63.40.8
36Italy62.50.0
37Serbia 62.53.6
38Bosnia and Herzegovina61.41.2
39Croatia611.6
40Moldova58.40.4
41Russia58.21.1
42Belarus58.1-0.5
43Greece57.32.3
44Ukraine51.93.8
See Entire Region List ›

View all countries ›

Back to Top