Employer of Record in Liechtenstein: A Complete Guide for 2025
Regulation
Introduction
Liechtenstein is a financial hub in Europe, offering opportunities for international companies due to its stable economy, strong banking sector, and strategic location. Companies looking to expand in this low-tax, business-friendly jurisdiction may benefit from an Employer of Record (EOR) to navigate local employment laws.
What Is an Employer of Record (EOR)?
An EOR is a third-party organization acting as the legal employer for a workforce in Liechtenstein. It manages payroll, tax compliance, labor contracts, and other HR functions, allowing companies to hire without establishing a local legal entity.
Key Advantages of Using an EOR in Liechtenstein
- Speed to Market: Hire employees within days instead of months.
- Full Legal Compliance: Navigate labor and tax laws with expert support.
- Cost-Efficient Entry: Avoid expenses related to entity setup and administration.
- Operational Focus: Focus on business growth while the EOR handles HR administration.
Employment Law Overview in Liechtenstein
- Working Hours: Standard hours are 8.5 hours/day or 42.5 hours/week.
- Employment Contracts: Typically issued in writing, detailing salary, working hours, notice periods, and benefits.
- Termination Rules: Notice periods vary based on tenure, generally 1–3 months.
- Social Security System: Includes mandatory contributions for health, accident, pension, and unemployment insurance.
Payroll and Taxation
- Income Tax: Progressive rates up to approximately 8%, plus municipal surcharges.
- Employer Contributions: Approximately 12–13% of gross salary goes towards social security.
- 13th Month Salary: Common but not mandatory; expected in competitive sectors.
EOR vs. Entity Setup: A Quick Comparison
| Feature | EOR | Legal Entity |
|---|---|---|
| Setup Time | Days | Several Months |
| Cost | Lower | High (legal, tax, admin) |
| Compliance | EOR handles all | Your full responsibility |
| HR Admin | Delegated | In-house |
| Risk Exposure | Minimized | Higher |
Ideal Use Cases for EOR Services in Liechtenstein
- Testing market potential before incorporation.
- Hiring employees in the DACH region without setting up a branch.
- Managing short-term or project-based employment.
- Supporting M&A or joint ventures with minimal structural changes.
How to Choose an EOR Provider in Liechtenstein
Choose a provider with local labor law and tax expertise, transparent pricing models, multilingual support (German and English), and integration with global HR systems.
Conclusion
Liechtenstein offers strategic advantages for companies targeting Central Europe. An Employer of Record simplifies the expansion process, ensuring compliance and enabling rapid hiring without needing a local entity.
