Liechtenstein in the European Economic Area

The road to 1995

The decisive turn in Liechtenstein’s modern economic history came with the European Economic Area. In November 1990, Switzerland and Liechtenstein amended the customs treaty to give the principality greater freedom in European integration. The amendment allowed Liechtenstein to join agreements and international organisations without Switzerland, provided that special arrangements between the two countries safeguarded the functioning of the customs union.¹ The significance of this change became clear in December 1992. After the Swiss electorate had rejected the EEA Agreement on 6 December, the voters of Liechtenstein approved it a week later, on 12 and 13 December, with a majority of 55.8 percent. The Swiss Federal Councillor Jean-Pascal Delamuraz had assured Liechtenstein before its vote that Switzerland would cooperate in finding a solution if the principality voted in favour.

The solution required more than two years of negotiation. Its central concept was the parallele Verkehrsfähigkeit, the parallel marketability of goods. Goods that comply with Swiss law may circulate in Liechtenstein as part of the Swiss customs territory, and goods that comply with EEA law may also circulate there as part of the EEA internal market, while a market surveillance and control system prevents the principality from being used to circumvent Swiss rules. On 9 April 1995 the voters of Liechtenstein approved the revised arrangements with the customs treaty, and on 1 May 1995 Liechtenstein joined the European Economic Area.² The Federal Department of Foreign Affairs notes that EEA membership did not change the shared economic framework with Switzerland.³

Dual market access and the financial services passport

For the financial sector, EEA membership produced an effect that no Swiss institution can replicate. The EEA Agreement extends the internal market for financial services to Iceland, Liechtenstein and Norway. Once the relevant EU legal acts have been incorporated into the EEA Agreement by decision of the EEA Joint Committee, banks, insurance undertakings, investment firms, fund management companies and alternative investment fund managers licensed in Liechtenstein can provide services throughout the European Union on the basis of their home country licence, either by establishing branches or by cross-border services under the freedom to provide services. Liechtenstein institutions therefore enjoy the European passport while operating in Swiss francs and within the Swiss customs and currency area.

This dual access has shaped the business models of the Liechtenstein financial centre since 1995. Insurance undertakings in Vaduz write life insurance for clients in Germany, Austria and other EU countries on a freedom of services basis, and Liechtenstein fund management companies distribute their funds throughout the EEA under the UCITS and AIFMD passports. The figures published by the Liechtenstein Financial Market Authority show the result. In 2024, the 32 insurance undertakings supervised by the FMA collected premiums of 5.70 billion francs, of which life insurance accounted for 2.36 billion. The largest cross-border premium volumes came from Switzerland with 1,161 million francs, Germany with 878 million and Ireland with 853 million. The fund sector comprised 840 single funds and sub-funds with a volume of 117.8 billion francs, managed by 19 authorised management companies.⁴

For Zurich, this dual access is both a complement and a source of competition. Unable to passport its services into the EU, a Zurich bank must rely on national regimes such as the German exemption procedure discussed in Section IX or on subsidiaries within the EU. A Liechtenstein bank, by contrast, can serve the same German or Austrian client from Vaduz under the European passport. At the same time, several of the largest Liechtenstein banks maintain Swiss subsidiaries in Zurich and Basel to reach Swiss clients and to benefit from the depth of the Zurich market. The relationship is therefore one of mutual dependence. Liechtenstein offers Zurich the EEA dimension, and Zurich offers Liechtenstein market depth, talent and a larger client base.

Notes

1. 100 Jahre Zollvertrag Schweiz–Liechtenstein, “EWR und Zollvertrag”, https://www.zollvertrag.li/geschichte-meilensteine/100-jahre-schweizerisch-liechtensteinische-beziehungen/ewr-und-zollvertrag. ↩
2. 100 Jahre Zollvertrag Schweiz–Liechtenstein, “EWR und Zollvertrag” (note above). The page describes the arrangement as a success that is today assessed positively by political and economic actors alike. ↩
3. EDA, “Bilaterale Beziehungen Schweiz–Liechtenstein”, https://www.eda.admin.ch/eda/de/home/vertretungen-und-reisehinweise/liechtenstein/schweiz-liechtenstein.html. ↩
4. Finanzmarktaufsicht Liechtenstein (FMA), Finanzplatz Liechtenstein, edition 2025, https://www.fma-li.li/fma-li/documents/publikationen/finanzplatz-liechtenstein/fma-broschuere-finanzplatz-liechtenstein-2025.pdf. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.