Anyone who wanted, in the last year, to set up a company in Liechtenstein that manages finances or offers financial services of any kind had to comply with traditional legislation for banks and financial institutions.

A credit card company in Switzerland must enter into a partnership with a Swiss bank, as it stands no chance to obtain its own banking license.

In Germany, the banking supervision law distinguishes between a full banking licence (deposit bank) and a partial banking licence (securities trading bank, payment institution, e-money institution or other institution). The full banking licence allows all banking transactions to be carried out while the partial licence is limited to some or only one banking transaction (e.g. guarantee business).

Legislation within the framework of the European economic area

The FMA Liechtenstein (Financial Market Authority Liechtenstein) writes:

The existing regulation is based on traditional business models, i.e. universal banks offering a comprehensive range of services. Especially in the Fintech sector, however, a specialization can be observed. Therefore, there will be more and more companies that offer only a certain part of the traditional banking services. This is linked to an individual risk profile. The adjustment should take account of this development.

Specifically, the Financial Market Authority (FMA) should in the future be able to adjust the minimum capital of banks and investment firms to the respective risk profile. This does not only concern Fintechs. However, the government wants to make the Liechtenstein financial center more attractive specifically for the international Fintech scene which will be primarily affected by the adjustment.

Through EEA membership, financial service providers licensed in the EU or the EEA may, within the context of the freedom to provide services, also offer their services in Liechtenstein. The same way, Liechtenstein companies also enjoy full freedom to provide services in all countries of the European Union and the EEA. It goes without saying that, in the licensing process, all companies have to comply with the same legal requirements.”

Liechtensteins government aligns itself with current realities

What distinguishes Fintech companies is an evaluation of the tried and tested methods in finance and a new orientation with regards to procedure. Benchmarks such as the immediate availability of data, easier access to credit, or the speed of transactions, as for example in the trading business, are used as a guidelines. Consumer demands are often the main focus, and financial services are built around the actual product to make things easier.

What is still the future for many, namely more consumer-friendly interactions as well as access to trading, credits and banking, is becoming a reality in many countries thanks to modern Fintech start-ups.

Since March 2017, such modern Fintech companies have found it easier to establish their business in Liechtenstein because they no longer have to meet the requirements of a bank.


The government addresses Fintech companies with clear statements

A Document regarding the position of the Government of Liechtenstein from this January states:

In the future, the Financial Market Authority will be able to adjust the minimum capital requirements of banks and investment firms to the respective risk profile.

The government thus aims to increase the attractiveness of Liechtenstein as a financial center for the international Fintech scene. The new capital rules are implemented within the European regulatory framework, which is why access to the European Economic Area is guaranteed.

So far, the banking regulation has been based on the model of universal banks which offer a comprehensive range of services. With the increased presence of Fintech companies as providers of banking services, there is a clear trend towards specialization. In the future, therefore, there will be more and more companies that provide only a certain part of the banking services associated with an individual risk profile.

With the planned amendment to the law, the Financial Market Authority, as the licensing and supervisory authority, will be able to better take this development into account. It is a measure to exploit the opportunities of new financial technologies for the financial center and the country.”

Fintech, one of the four areas of focus for the Technopark Liechtenstein

In addition to traditional start-up areas focused on technology, such as measurement technology, or packaging, environment and recycling, Technopark Liechtenstein regards services and products in the Fintech scene as one of the most important innovation areas in the region.

With the relief for financial companies of all kinds (not exclusively start-ups), the Liechtenstein government is sending a clear signal in the same direction. For entrepreneurs with innovative ideas in the Fintech sector, Liechtenstein, and specifically the Technopark Liechtenstein, is an ideal location.

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