How to Register a Sole Proprietorship (Einzelfirma) in Liechtenstein

In Liechtenstein, operating as an independent contractor or sole proprietor is a straightforward way to establish a business. The country offers a politically stable environment, access to both the Swiss and European Economic Area markets, and a competitive tax framework, which makes it attractive for entrepreneurs and small businesses. The process is relatively efficient compared to setting up a corporate entity, though it does require meeting regulatory and tax obligations.

Challenges include unlimited personal liability and the need to maintain accurate accounting records. However, the benefits are significant: low entry barriers, full control over the business, and flexibility in operations. Against this backdrop, the Einzelfirma—Liechtenstein’s sole proprietorship structure—remains one of the simplest and most flexible ways to start working independently.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Always verify with official sources or consult a professional before taking action.

What is a Sole Proprietorship in Liechtenstein?

In Liechtenstein, a sole proprietorship is officially called an “Einzelfirma”. Depending on context, it may also be referred to as:

• Sole trader
• Self-employed person
• Independent contractor

These terms all describe the same model: one individual legally running a business without forming a company.

How does a Sole Proprietorship (Einzelfirma) work in Liechtenstein?

Einzelfirma vs. other business structures in Liechtenstein

While a sole proprietorship is the simplest way to operate a business, it is not the only option. Many entrepreneurs consider forming a GmbH (limited liability company) or other corporate entities, particularly if they plan to take on higher risks or employ staff. Below is a comparison between a sole proprietorship and a GmbH.

Step-by-step guide: How to register a sole proprietorship in Liechtenstein

Step 1: Check your eligibility

To form an Einzelfirma, you must be a natural person. Liechtenstein citizens and residents can register directly. Foreign nationals may also establish a sole proprietorship, but in practice, they must usually have a local residence or business address in Liechtenstein. This requirement ensures proper registration with the Commercial Register and the tax authorities.

Certain regulated trades, such as financial services, trust activities, or professions requiring technical qualifications, demand additional permits or proof of professional competence from the Office of Economic Affairs before you can begin operating.

Step 2: Choose your business name

Your business name must contain your surname exactly as in the civil register. You may add descriptive or trade elements, provided the name remains distinguishable and compliant. You can search existing companies in the Trade Register.

Step 3: Gather required documents

You will need:

• Proof of identity (passport or ID card)
• Recent criminal record extract
• Extract from the garnishment register
• Lease agreement or land register extract for business address
• Business purpose statement or plan
• Certificates of qualification for regulated professions

Step 4: Register with the Commercial Register

File your registration with the Commercial Register via the Office of Justice portal. In addition, you must obtain a business licence from the Office of Economic Affairs.

Step 5: Pay registration fees and contributions

The registration fee for entering a sole proprietorship (Einzelfirma) in the Commercial Register is CHF 150. Additional changes later, such as amending the company name or business address, typically cost CHF 100 per entry.

Step 6: Complete post-registration obligations

After registration, you must comply with several ongoing obligations. These include keeping proper accounting records, filing yearly income tax returns, and registering or deregistering employees with the relevant social insurance authorities. You must also update the Commercial Register with any changes to your address, business purpose, or other key details.

In addition, sole proprietors must issue legally compliant invoices. Every invoice should include your business name, address, invoice number, date, description of goods or services, the client’s details, and the applicable VAT if you are registered. All invoices and supporting documents must be retained for at least 10 years, as required under Liechtenstein’s commercial law.

Financial and tax obligations for sole proprietors in Liechtenstein

You are responsible for:

• Income tax: Sole proprietors pay progressive personal income tax in Liechtenstein. State income tax applies first, and each municipality adds its own surcharge (multiplier). The combined effective rates range from about 3% on low incomes to around 24% on high incomes. Returns are filed annually with the Tax Administration Office.
• VAT (Mehrwertsteuer): The standard VAT rate is 8.1%, with reduced rates of 3.8% (accommodation services) and 2.6% (basic goods like food and books). VAT registration is mandatory if your taxable turnover exceeds CHF 100,000 per year. Returns are generally filed quarterly with the Tax Administration Office.
• Social security contributions: Sole proprietors must register with the Liechtenstein social security system (AHV/IV/FAK) for old-age, disability, and family allowance contributions. The combined rate is about 12.1% of net income (AHV 8.25%, IV 1.35%, FAK 1.9%, plus administrative costs of 0.575%), subject to minimum and maximum thresholds. If annual self-employment income is below CHF 3,000, a fixed minimum contribution of CHF 362.25 per year applies. Contributions are usually paid quarterly as advance payments and later adjusted once the final income is confirmed.
• Record-keeping: You must maintain accurate accounts if annual turnover exceeds CHF 10,000. Accounting records, invoices, and receipts must be retained for at least 10 years to comply with audit requirements
• Invoicing: Every invoice must include your business name, address, VAT number (if registered), client details, date, description of goods or services, and the applicable VAT. Invoices must be numbered sequentially and archived as part of your bookkeeping obligations.

Launch your contracting career and stay compliant with Deel

Registering as a sole proprietor gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

• Automate invoicing and expense tracking with essential Bookkeeping tools
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FAQs

What is the minimum capital required to start a Einzelfirma in Liechtenstein?
There is no mandatory minimum capital requirement.

Do Einzelfirmen need to register for VAT?
Yes, if their business activities are VAT-liable and turnover exceeds the threshold.

How much are the standard monthly or annual contributions?
Social contributions vary depending on income. Contributions equal about 12.1% of net income. If you earn less than CHF 3,000 per year, a fixed minimum of CHF 362.25 annually applies. For example, with a CHF 50,000 income, contributions are around CHF 6,000 per year, paid quarterly.

Can a Einzelfirma hire employees?
Yes. Employers must register employees with the National Administration for Social Insurance (AHV, IV, FAK) and ensure immigration compliance.

How long does it take to register as an Einzelfirma in Liechtenstein?
Typically, a few days to a few weeks, depending on the municipality and whether permits are required.

Can foreign nationals register as an Einzelfirma in Liechtenstein?
Yes, provided they meet residence and permit requirements.

Do Einzelfirmen need a separate business bank account?
It is not legally required, but strongly recommended to separate business and personal finances.

What happens if I stop working as a Einzelfirma?
You must deregister from the Commercial Register, cancel your business licence, notify tax and social authorities, and file final tax returns.

Are there any government incentives or reduced rates for a new Einzelfirma?
There are no widely publicized national incentives specific to sole proprietors as of 2025, though local support may be available.

Can I use Deel as an Einzelfirma to get paid by international clients?
Yes. Deel supports sole proprietors in receiving payments globally in multiple currencies with low fees.

Does Deel generate compliant invoices for Einzelfirma?
Yes. Deel generates legally compliant invoices to help you meet regulatory requirements.

Can Deel help me with taxes as a sole proprietor in Liechtenstein?
Yes. Deel provides tax reports and records to simplify your filings, though it does not replace an accountant.

Does Deel offer contracts for freelancers and Einzelfirma?
Yes. Deel provides contract templates compliant with local law.

Can I access benefits through Deel as an Einzelfirma?
Yes. Deel offers optional perks such as health insurance and retirement savings plans.