First-step analysis: fintech regulation in Liechtenstein

Financial regulation

Regulatory bodies

Which bodies regulate the provision of fintech products and services?

The Financial Market Authority (FMA) is the supervisory authority in the fintech sector, as well as the Liechtenstein financial market in general. The FMA has an entire department solely dedicated to the fielding of fintech-related inquiries.

Regulated activities

Which activities trigger a licensing requirement in your jurisdiction?

As Liechtenstein is a member of the EEA, general EU regulations and directives apply (with an EEA Joint Committee decision required). All banking activities (deposit and loan business), as well as investment services pursuant to Annex I of Markets in Financial Instruments Directive II are regulated. In addition, payment services pursuant to the Payment Services Directive (2015/2366/EC) (PSD2) and the E-money Directive (2009/110/EC) are regulated. This represents an advantage for start-ups based in Liechtenstein that benefit from the EU passport, a system allowing providers of financial services already licensed in the EEA to offer their services in other EEA countries (and, thus, including the EU) without additional approval requirements.

Since 1 January 2020, legal and natural persons with headquarters (registered office) or a place of residence in Liechtenstein who wish to professionally act as trustworthy technologies service providers (TT service providers) must apply to be entered into the TT Service Provider Register in writing with the FMA before beginning their activity. This also applies to token issuers that issue tokens in their own name or in the name of a client in a non-professional capacity if tokens in the amount of 5 million Swiss francs or more are issued within a 12-month period. According to the transitional provisions of the Law on Tokens and TT Service Providers (the Blockchain Act), however, persons who, on the date the Act entered into force, had already provided TT services, were required to register within a 12-month period of the Blockchain Act entering into force.

Consumer lending

Is consumer lending regulated in your jurisdiction?

Regulation of consumer lending depends on the concrete business model. Taking deposits (in legal tender) and lending this money to others (deposit and lending business) are considered to be banking activities, which are both reserved to licensed banking institutions. If a platform is operated that enables users to provide these kinds of activities to other participants, then this could be an illegal business model. However, it depends on the exact use case. In addition, if loans are given in the form of tokens (which neither represent e-money nor financial instruments), then the Banking Act is not applicable, as it deals with legal tender (fiat) only.

Secondary market loan trading

Are there restrictions on trading loans in the secondary market in your jurisdiction?

If obligations from a debtor to a creditor are purchased (eg, if the retailer’s receivables are purchased by a company) and the risk of insolvency (eg, of the customer as debtor) is assumed by the buyer upon conclusion of the assignment agreement (credit risk function), there is no requirement for special financial licences. The retailer may retain the assignment price paid for the purchased receivables without the possibility of a redemption. The retailer is only liable for the legal existence of its assigned customer claim.

However, if loans (in the sense of a lending business) are traded (ie, a new creditor is entering the agreement), then this will likely constitute a banking business. This must be differentiated on a case-by-case basis.

Collective investment schemes

Describe the regulatory regime for collective investment schemes and whether fintech companies providing alternative finance products or services would fall within its scope.

The Liechtenstein Collective Investment Scheme Regulation is mainly based on the Undertakings for the Collective Investment in Transferable Securities (UCITS) Directive (2009/65/EC) and the Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD) and is therefore harmonised within the European Union and the EEA.

An ‘alternative investment fund’ (AIF) is broadly defined as an undertaking collecting capital to invest it pursuant to a defined investment strategy on behalf of the investors.

A ‘UCITS’ refers to an undertaking that raises capital from the public and invests this capital collectively in specific transferable securities on the principle of risk spreading.

Alternative investment funds

Are managers of alternative investment funds regulated?

With funds, it is crucial to distinguish between the investment portfolio and the shares of the fund. Since a fund pursuant to the UCITS Directive may invest only in specific types of financial product, a true crypto-fund is not feasible and only the shares of the fund may be tokenised. In that sense, a true crypto-fund can only be achieved under the AIFMD, as this is primarily a fund-manager regulation, rather than an investment-fund regulation. An AIF mainly targets professional investors.

Hence, a fund pursuant to the AIFMD may invest in a crypto-portfolio and its shares may be tokenised. A central aspect of an AIF is the pooling of capital or assets. These criteria must be broadly construed to mean any assets. Thus, a fund may hold yachts in its portfolio or other commodities, such as tokens.

Peer-to-peer and marketplace lending

Describe any specific regulation of peer-to-peer or marketplace lending in your jurisdiction.

No specific regulation applies to peer-to-peer lending. EU legislation applies and it should be analysed if banking business is conducted.


Describe any specific regulation of crowdfunding in your jurisdiction.

An EU directive on crowdfunding is due to be enacted in the future, which will affect Liechtenstein jurisprudence owing to the country’s harmonisation with the European Union as an EEA member state. At present, an initial coin offering (ICO) or a token generation event may be regulated in Liechtenstein if security tokens are being issued. In general, there is no singular act specific to ICOs that regulates crowdfunding, but several laws may apply.

Moreover, the Blockchain Act directly applies to token generating events, ICOs and security token offerings.

Invoice trading

Describe any specific regulation of invoice trading in your jurisdiction.

Factoring is not regulated as a financial market activity if the risk of insolvency is assumed by the buyer. Only a commercial business licence is required from the Office of Economic Affairs. If a TT service is offered, registering under the Blockchain Act is required. Depending on the use case, the registration under the Blockchain Act may supersede the requirement for a business licence. 

Payment services

Are payment services regulated in your jurisdiction?

The revised Liechtenstein Payment Service Act, which is based on PSD2, entered into force on 1 October 2019. The E-money Act, which is based on the EU E-money Directive, is also relevant to payment services.

For a variety of business models, the application of PSD2 could trigger the need for a payment services licence.

Open banking

Are there any laws or regulations introduced to promote competition that require financial institutions to make customer or product data available to third parties?

PSD2 introduces the new roles of a payment initiation service provider and an account information provider. In this regard, banking institutions must, to a certain extent, make customer or product data available to third parties.

Insurance products

Do fintech companies that sell or market insurance products in your jurisdiction need to be regulated?

The Liechtenstein Insurance Act is based on the Insurance Distribution Directive (2016/97/EC) and the distribution of insurance products is a regulated activity.

Credit references

Are there any restrictions on providing credit references or credit information services in your jurisdiction?

Credit references and information services may constitute account information services pursuant to PSD2.

Law stated date

Correct on:

Give the date on which the above content is accurate.

10 June 2020.

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