Legal System

The legal system of Liechtenstein consists of local civil and penal codes based on a civil code system. The system also makes provisions for judicial review of legislative acts in the Federal Constitutional Court.

Civil law, also called Continental law or Romano-Germanic law, is the most prevalent legal system in the world. The main difference between civil and common law is that that common law draws abstract rules from specific cases, whereas civil law starts with abstract rules, which judges must then apply to the various cases before them. In other words, historically speaking, common law is based upon traditions and laws are codified following court rulings. On the other hand, in the case of civil law, laws are first codified and then applied.

Privacy

At this time the government of Liechtenstein has not signed a Tax Information Exchange Agreement with the United States although it has signed a Mutual Assistance Treaty with the United States. Moreover, Liechtenstein is only a transitional participant in the European Union Savings Directive and thus has not agreed to share personal information with other nations. As such, Liechtenstein does offer a high level of privacy protection to both American and European Union citizens. Liechtenstein’s refusal to share information with either the European Union or American government suggests a strong commitment to maintaining the privacy of their offshore investors.