Liechtenstein‘s economy is highly diverse with a strong focus on industrial manufacturing. The country has a comparatively large industry and a smaller services sector than many assume.
Industry and trade feel well in Liechtenstein. Although Liechtenstein is often mentioned in the same breath as the financial centre and its services, established from trade and industry-related companies underpin the broad diversification of the economic area.
Despite its small size, Liechtensteins economy covers almost all of the traditional sectors present in many other countries. Machinery and equipment manufacturing, plant construction, precision instruments, dental technology and the food industry are the main industries, with a large proportion of the goods and services produced in the country destined for export. Throughout all these sectors, companies based in Liechtenstein place emphasis on creating high-tech products of the finest quality rather than on cheap mass production.
About 40% of employees in Liechtenstein work in the industrial sector. Industry, combined with manufacturing, produces about 40% of the country‘s annual gross value added. Many industrial firms based in Liechtenstein operate in highly specialised niche markets, while many have become global leaders in their respective fields thanks to intensive research and development.
Alongside the few large companies present in Liechtenstein, it is first and foremost small and medium-sized enterprises that form the backbone of the countrys industry. On average, companies in Liechtenstein have fewer than ten members of staff, though these workers are often characterised by excellent qualifications and high levels of productivity.
The most important advantages that Liechtenstein has to offer as a business location are its central position in Europe and direct access to the European Economic Area (EEA) and Switzerland. Since 1924 Liechtenstein has formed part of a customs and currency union with Switzerland and benefitted from the stability of the Swiss franc. In 1992 Liechtenstein's citizens voted to join the EEA, with the country enjoying access to the EU/EEA single market since the treaty came into force in 1995. Of particular importance to companies in Liechtenstein are the provisions on the free movement of goods and persons. The Principality is also a member of the European Free Trade Association (EFTA) and as such benefits from one of the world's largest network of free-trade agreements. There are also a series of further international and bilateral agreements, for example with Switzerland Global Enterprises (S-GE, formerly OSEC) and the WTO, that create the best possible environment for export-oriented sectors of the economy.
Liechtenstein is home to highly qualified workers from over 100 countries. The high level of training and education as well as the attractive labour market are the basis for motivated and well-trained employees both from the Principality itself and the border region around Lake Constance. Foreign workers are an important part of Liechtenstein's economy: 53% of the country's workforce lives abroad and commutes to work each day. Bureaucracy is kept to a minimuim when it comes to employing new members of staff from over the border.