Bitcoinstein — Why INVAO opted for Liechtenstein
Liechtenstein is making a great effort to become Europe’s new blockchain hub. The country is creating a business-friendly regulatory environment, attracting both start-ups as well as established companies. The planned blockchain act will introduce more legal certainty and add to Liechtenstein’s attractiveness for blockchain businesses.
Liechtenstein — the small country nestled in the mountains between Austria and Switzerland has a population of only 37,000 and just one single hospitals. The country is so small; whenever the royal family throws a party, everyone will get invited.
But the royal family’s hospitality is not limited to parties. Crown Prince Alois has recently been reaching out to the blockchain community, marketing his country as the place-to-be for cryptocurrency businesses. His strategy seems to work, Forbes is already referring to Liechtenstein as “Bitcoinstein.”
Liechtenstein grants businesses access to the European market without having to comply with EU regulations
For many years, Liechtenstein has had a reputation as a place where the worlds richest hide their wealth to avoid taxes. As other European countries have increased pressure on Liechtenstein to reform their banking regulations, the leadership has started to watch out for alternative ways to position the country in the global economy.
A major advantage of Liechtenstein is that the country is part of the European Economic Area and enjoys a Customs and Currency Treaty with Switzerland. Therefore, financial services firms can trade across the entire continent. However, as Liechtenstein is not a member of the EU, businesses do not have to comply with EU regulations and do not have to report to EU authorities.
Banks in Liechtenstein handle cryptocurrency investments and even offer ICO advice. Most European banks do not offer these services due to anti-money-laundering regulations. Crypto-to-crypto trading is also not regulated in Liechtenstein and it is even possible to open a company without a bank account, just by using a cryptocurrency.
Yanislav Mahalov, founder of the company Aeternity, said in a Forbes interview:
“They’re not putting any financial incentives in place, but they’re making it easy to incorporate a cryptocurrency business.”
Newly introduced regulation will create legal certainty and a blockchain friendly business environment
Having that said, it is not Liechtenstein’s goal to become the wild west for blockchain companies. The government is currently working on a blockchain act, which is meant to regulate the industry from early 2019 onwards. The objective of this act is to create legal certainty, without overregulating the market.
The proposed law will help blockchain businesses to overcome anti-money laundering and know-your-customer hurdles, that have made it difficult for companies to integrate with the traditional economy in other European countries. The Blockchain act will also provide a legal basis for asset tokenization, ownership rights, and storage of digital assets, ICOs, token sales, and TGEs.
Prime Minister Adrian Hasler says, “There is no point in creating regulations that are excessive and lacking in practical relevance because then the blockchain economy will simply develop outside the regulations. That surely would not be in the interest of any country. Therefore, we want to propose a sensible regulatory approach by means of this law, where the role of the state in creating legal certainty and confidence comes into effect where it is needed.”
Liechtenstein is becoming Europe’s blockchain Silicon Valley, creating superior business and networking opportunities
Besides a favorable regulatory environment, Liechtenstein is also attractive from a business networking perspective. As the community is growing, more companies are moving their headquarters to Liechtenstein. Monthly blockchain meetups are being organized in the capital of Vaduz, where blockchain professionals can exchange ideas and knowledge. The city of Zurich, home to many financial service companies, is just an hour train ride away.
The FMA, the financial authority of Liechtenstein, has introduced the “regulatory laboratory”, a contact point for Fintech companies to discuss their needs. Companies report that they face very short response time and their suggestions are being taken seriously.
Altogether, Liechtenstein has become the obvious choice for blockchain companies. INVAO has decided to set up shop in the country as well, to benefit from legal certainty and to ensure legal compliance not only now, but also in the future.
Frank Wagner, CEO of INVAO, says, “we looked at other European countries, including Switzerland and Malta, but the blockchain friendly climate in Liechtenstein, combined with the regulation that is going to come in 2019, will protect both our business and our investors. That’s why Liechtenstein was the obvious choice.”
