Liechtenstein financial service providers fall into five categories:

• Banks and finance companies
• Asset management companies
• Investment undertakings
• Professional trustees, lawyers, auditors
• Insurance undertakings

As of the end of 2007, in particular, the Liechtenstein financial center is home to:

• ·15 banks
• ·401 trust companies
• ·47 Liechtenstein insurance undertakings
• ·27 fund management companies with approx. 360 investment funds
• ·163 investment companies

The banking institutes in Liechtenstein distinguish themselves through a solid equity capital cover and thereby provide the best conditions from the perspective of depositor protection. Liechtenstein also has a deposit guarantee and investor protection system that all banks have joined. By far the most important business field of the Liechtenstein banks is private banking with portfolio administration and related services. The close cooperation of banks with professional asset managers is typical of the Liechtenstein banking center.

Investment undertakings (funds) are assets raised from the public following public solicitation for the purpose of collective capital investment and managed by a management company for the joint account of the unit-holders, unless expressly provided otherwise, in accordance with the principle of risk spreading. Investment undertakings may be established on a contractual basis (investment funds) or as a company (investment company).

The passage of the Insurance Supervision Act in 1996 led to the expansion of the Liechtenstein insurance location. The main business of Liechtenstein insurance undertakings consists in unit-linked life insurance. Non-life insurers are niche insurers specializing in specific insurance products (e.g. art insurance). Reinsurance undertakings are in many cases self-insurance undertakings (captives), which only assume risks of their group as reinsurance.

Pension schemes are the implementing organs of occupational pension funds. Occupational pension funds, as the 2nd pillar in the three-pillar concept along with State Old Age, Survivors’ and Disability Insurance (AHV/IV, 1st pillar), are intended to allow insured persons to continue their accustomed lifestyle after they retire. They are organized at the level of businesses. In principle, all employees who are already insured in the 1st pillar and who earn a certain minimum annual income are subject to the insurance requirement. The employer is required to administer occupational pension plans. For this purpose, the employer establishes its own employment scheme or joins a collective scheme in which different companies are administered with the same or different insurance plans.

The scope of activities of professional trustees includes the formation of legal persons, membership on boards of directors, and accounting and inspections. Lawyers, legal agents, patent attorneys, and patent attorney companies work especially in the areas of professional legal counseling and representation of parties as well as counseling and representation with respect to intellectual property. Some auditors and auditing companies also hold a license for the conduct of professional audits.

Overall, an enhanced diversification of products, especially investment funds and insurance solutions, and a significant expansion of the number of market participants have been observed since the beginning of the 1990’s. Due to these dynamics of the financial services sector, State authorities also had to be expanded in recent years and the justice system and police strengthened.

The Liechtensteinische Landesbank, established over 140 years
ago, is the bank with the richest tradition in Liechtenstein