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Liechtenstein: a safe-haven, not a tax-haven

Liechtenstein has been a European banking centre since the Second World War. Like Switzerland, the country has prided itself on its strict bank secrecy laws and stable political system. These bank secrecy laws made Liechtenstein increasingly popular over the last 50-60 years as a tax haven for individuals and companies in Europe and worldwide.

Until recently, individuals opening bank accounts in Liechtenstein were guaranteed that their accounts would be held to the most stringent bank secrecy laws, and their holdings would never be reported to anyone. Bankers in Liechtenstein opened accounts for individuals worldwide.

However, the promise of bank secrecy allowed banks in Liechtenstein to start charging high ‘management’ fees to foreign account holders. Most individuals with accounts held in Liechtenstein have historically paid the disproportionately high fees not due to the excellent banking services that they have received, but because it is a cost of avoiding taxation in their home country.

In 2011 Liechtenstein entered into tax-sharing agreements with a number of countries worldwide, including the United Kingdom, the European Union, the United States and Australia. At the end of 2017, banks in Liechtenstein will begin disclosing the account details of their foreign account holders to their home tax offices.

This new tax arrangement is likely to cause huge fines and excess taxation for many individuals with accounts located in Liechtenstein.

As a result, many account holders are now looking to move their money out of Liechtenstein and to close their accounts prior to the commencement of the tax-sharing agreements. The problem many people face is where to put the money. Because of these tax-sharing arrangements, there are only a number of ways that Liechtenstein banks will allow individuals to close their accounts and transfer their money.

One of the best ways for individuals holding money in Liechtenstein to close out their accounts prior to the tax-sharing arrangements going into effect is to purchase gold. Individuals with accounts in Liechtenstein can legally transfer the balance of their accounts to a precious metals dealer. Individuals can then either purchase gold for delivery, or storage.  In addition to helping resolve the issue of tax-sharing arrangements, the costs of holding gold bullion in most cases are significantly lower than the fees charged by banks in Liechtenstein.

For further information about this, please contact us.