Liechtenstein's economy runs on more jobs than residents

Why Liechtenstein's output per head overstates resident income

The World Bank puts Liechtenstein's output at 8.9 billion United States dollars in 2024, or 220,167 dollars for each resident. The division is correct and it answers a narrower question than it appears to. Gross domestic product counts everything produced inside the border, and about 57% of the people producing it in 2024 lived outside that border. Their wages are part of Liechtenstein's output, and they are paid out to households in Switzerland and Austria.

The government's own economic brochure, compiled by the Liechtenstein-Institut with data to the end of June 2026, makes the correction itself. It reports gross national income beside output, because national income counts what residents earn from work and capital wherever the earning happens. Liechtenstein's gross national income came to about 7.0 billion Swiss francs in 2023, or about 175,000 francs a head. Output was 7.8 billion francs in 2024. The brochure gives the reason for the gap in one sentence: commuters take so large a share of the wages earned in the country home with them that the outflow outweighs the surplus Liechtenstein normally earns on capital held abroad.

The Austrian Economic Chamber's report of June 2026 reaches the same point from the same number. With 57% of those employed commuting in, it says, output allows only limited conclusions about the income of the people who live there.

The household figures sit lower and are still high. Private household income was about 93,000 francs a head in 2023. Median equivalised disposable income, which counts income after taxes and transfers and adjusts for the size of the household, was 61,489 francs in 2023, against 51,984 francs in Switzerland. Wealth is spread far less evenly than income: the median taxed net wealth of a taxpayer was 68,424 francs in 2023, and the mean was 520,504 francs.

How jobs in Liechtenstein came to outnumber residents

In 1970 Liechtenstein had about half as many people in work as it had residents. The two lines crossed in 2017, and by the end of 2025 employment stood at 105.7% of the resident population. The same ratio was 59.0% in Switzerland, 51.4% in Austria and 76.0% in Luxembourg in 2025.

Residents did not close that gap. Labour force participation among residents aged 15 to 64 was 77.3% in 2025, below the Swiss figure of 84.1%. The growth came across the border, and it came steadily through every downturn the brochure records: the financial crisis, the strong franc and the pandemic all left the employment line rising. Commuting in the other direction stayed small, at about 2,500 people in 2024.

Of those commuting in during 2024, 61% came from Switzerland and 35% from Austria. The Austrian Economic Chamber counted about 8,700 Austrians crossing to work in 2025. The number of citizens of European Economic Area states who live in Switzerland and work in Liechtenstein rose faster than the rest over two decades, which the brochure attributes to free movement of persons under the bilateral treaties between Switzerland and the European Union.

The Historisches Lexikon des Fürstentums Liechtenstein describes how the pattern formed. Full employment held into the 1980s, the labour market was drained for decades, and firms had to recruit specialists and unskilled workers alike from abroad. From the 1950s that dependence produced fears of foreign domination, raised among others by the workers' association, and a restrictive policy on who could settle. By 2002 foreigners already held more than 65% of the 28,814 jobs in the country, and 13,030 of those jobholders were commuters. When Liechtenstein joined the European Economic Area in 1995 it negotiated a special arrangement that lets it go on controlling immigration by number.

Commuters are paid slightly more than residents. The median gross monthly wage in 2024 was 7,514 francs for commuters and 7,253 francs for employees living in Liechtenstein, against a Swiss median of 7,024 francs.

What Liechtenstein's factories make

Industry and the other goods-producing trades generated 2.9 billion francs of value added in 2023. Manufacturing alone accounted for 35.3% of the total, against 19.8% in Switzerland the same year. Industry held 37.0% of full-time-equivalent employment at the end of 2024, and its full-time workforce grew from about 12,500 in 2001 to 13,500, with a slight decline since a peak in 2018.

A customs and tax treaty with Austria in 1852 made the principality part of a larger economic territory, and Swiss textile manufacturers built factories there from 1861. Textile employment rose from 21 in 1861 to 677 in 1912, 470 of them women, and about 186 embroidery machines worked in homes around 1910. The textile mills stopped during the First World War for want of raw materials. In 1928 all of industry employed 541 people. A dental factory, Ramco, opened in Schaan in 1933. Three metal firms, Presta, Hilti and PAV, began taking on workers after 1941, and Presta and Hilti produced for the German armaments industry during the war. After 1945 came what the Lexikon calls a second industrialisation, concentrated in mechanical engineering, food production and plastics processing.

Many of the firms that grew out of that period work in narrow market niches, and the Austrian Economic Chamber names Hilti, thyssenkrupp Presta, Ivoclar Vivadent, Kaiser and Neutrik. A promotional survey by the Handelsblatt Research Institute, closed in October 2016 for the national marketing agency, describes Hilti as a maker of fastening and demolition tools for construction that spent 16% of its 2015 revenue on research, Presta as a maker of steering systems for more than 20 million vehicles a year, Ivoclar Vivadent as a maker of dental materials and artificial teeth delivered to more than 120 countries, Hoval as a maker of heating and ventilation plant, and Ospelt and Hilcona as food producers. In 2024 mechanical engineering employed 2,970 people in Liechtenstein, vehicle construction 2,252 and food production 1,838.

Research spending is almost entirely private. It came to 447.5 million francs in 2023, or 6.0% of output, and public spending accounted for 10.8 million francs of it, 2.4% of the total, against about 29% in Switzerland. Applicants from Liechtenstein filed 430 new patent applications in 2025, or 10.4 for every thousand residents, against 1.1 in Switzerland.

Why Liechtenstein's manufacturers employ mostly abroad

The commuter pattern repeats at the level of the firm. The industrial companies in the Liechtenstein Chamber of Commerce and Industry employed 9,944 people in Liechtenstein in 2025 and 54,240 in subsidiaries abroad, so 85% of their workforce was outside the country. In 2000 the figures were 7,971 at home and 24,134 abroad, a foreign share of 75%. Of the foreign jobs in 2025, 31,683 were in Europe, 11,792 in Asia and 9,993 in the Americas.

The banks show the same shape on a smaller scale, with an estimated 2,900 employees in Liechtenstein and 6,700 abroad in 2025.

Behind the large names sits a dense layer of small firms. At the end of 2024 Liechtenstein had 5,582 enterprises, and about 88% of them had fewer than ten employees. The 21 largest firms provided 15,173 jobs, about a third of the total. There is one enterprise for every seven residents, against about fourteen in Switzerland and about 24 in Germany, and the number of enterprises has nearly doubled in two decades.

Output per person employed was 181,079 francs in 2024, against 159,758 francs in Switzerland and 99,445 francs in Austria. The brochure adds a qualification: since 2000 Liechtenstein's growth has come mostly from adding employment, and less from productivity.

How Liechtenstein's goods reach the Swiss and European markets

The customs treaty with Switzerland, signed on 29 March 1923 and in force since 1 January 1924, removed the customs border between the two countries and applies Swiss customs law and every Swiss trade treaty to Liechtenstein. The Lexikon counts it among the central causes of the post-war upswing. Membership of the European Economic Area since 1995 added the European Union's internal market, and goods made in Liechtenstein can be sold under either set of rules, an arrangement called parallel marketability. The politics article covers how the two treaties were reconciled.

One consequence is that Liechtenstein's trade is only partly measured. The Swiss customs administration records direct exports, and those figures leave out everything sold into Switzerland. No statistics exist for trade in services, Liechtenstein has no balance of payments of its own, and the Swiss National Bank does not report it separately.

Direct goods exports came to 3.05 billion francs in 2025, down from 3.21 billion in 2024, and equalled 40% of output. Members of the chamber of commerce reported foreign sales of 7.8 billion francs in 2025, of which 1.0 billion was in Switzerland, and the Liechtenstein-Institut estimates the true export ratio at about 45%.

Germany took 990 million francs of direct exports in 2025, Austria 331 million, the United States 263 million, France 199 million and China 190 million. Measured without gold, precious metals and works of art and adjusted for prices, exports fell by 11.2% in 2022, rose by 2.9% in 2023, fell by 1.0% in 2024 and fell by 6.5% in 2025, to 2.88 billion francs. In 2007 the same measure stood at 3.45 billion. Imports on that measure were 1.47 billion francs in 2025, so the goods account stayed in surplus.

How Liechtenstein's financial centre changed after the tax affair

The first bank, now the Liechtensteinische Landesbank, was founded in 1861. The second, the Bank in Liechtenstein, followed in 1920. The Persons and Companies Act of 1926 let the country offer lump-sum tax deals, and from the 1920s domiciliary and holding companies were set up there for anonymous business and asset management on behalf of international clients. The assets themselves were not held in the country. The Lexikon records that in the 1930s the business drew constant criticism, from Germany above all, and that financial services and banking then grew without a break into the 1990s.

The break came in February 2008. On 14 February German investigators searched the chief executive of Deutsche Post, using customer data that a bank computer technician, Heinrich Kieber, had sold to the German foreign intelligence service; the German finance ministry paid him 4.2 million euros for it. The bank concerned, LGT, is owned by the princely house. Liechtenstein trusts at the time paid 0.1% of their assets a year in tax, with a minimum of 1,000 francs. On 12 March 2009 the government and the hereditary prince presented the Liechtenstein declaration, committing the country to the OECD standard on tax transparency and exchange of information. Britannica records that the reform package adopted that year led the OECD to remove Liechtenstein from its "black list" of tax havens. In 2010 the government agreed to pay 50 million euros to the German treasury, and by 2018 it had signed 77 agreements on tax transparency. The Landtag voted in November 2016 for automatic exchange of account information with 27 further partners, with the first exchange planned for 2019.

Measured by client assets, the business is larger now than before the affair. Banks managed 538 billion francs of client assets in 2025 including their foreign subsidiaries, and 240 billion within Liechtenstein, which has exceeded its pre-crisis level since 2017. Net new money came to 27.1 billion francs in 2025. The average tier-one capital ratio was 19.0% at the end of 2025. Bank profits have risen since 2011 and were still below their 2007 level in 2025. The banks employed 2,982 people in Liechtenstein at the end of 2025, and legal, tax and audit firms another 3,210 at the end of 2024.

How much finance weighs depends on the measure. The government brochure puts finance and insurance at 10.1% of value added in 2023 and 11.5% of those employed in 2024, against 4.6% in Switzerland; counted with legal and tax advice, the financial sector held 19.6% of full-time jobs in 2024. The Austrian Economic Chamber's report of June 2026 gives financial services about 20% of output.

Where the Liechtenstein state gets its revenue

In the 1930s the state paid for relief works out of four sources that brought in unexpectedly large sums: the lump sum it received under the Swiss customs treaty, levies on domiciliary companies, postage stamps and the sale of citizenship. The revenue base is broader now. The state took 931 million francs in taxes and charges in 2025. Its share of corporate income tax brought 288 million francs, value added tax 265 million and its share of wealth and earnings tax 136 million. The value added tax rate must mirror the Swiss rate, and the two countries levy indirect taxes jointly. The 2016 Handelsblatt survey, citing KPMG, gave the corporate tax rate as 12.5%.

Taxes supplied 72% of the state's current revenue of 1,287 million francs in 2025, and financial income from its investments about 20%. Public revenue across all levels of government came to 20.1% of output in 2024, against 26.9% in Switzerland and 23.0% in Ireland. Public spending came to 21.6% of output the same year, against 49.3% in the European Union.

The state accounts closed with surpluses of 373 million francs in 2023, 333 million in 2024 and 331 million in 2025. Gross public debt is close to zero. The state's net assets reached 4.4 billion francs in 2025 and the communes' 2.2 billion in 2024, with Vaduz holding 811 million and Schaan 535 million. S&P Global rated Liechtenstein AAA with a stable outlook in 2025. Liechtenstein joined the International Monetary Fund in 2024.

What farming and tourism still add in Liechtenstein

Agriculture produced 12 million francs of value added in 2023, 0.2% of the total, and held 0.7% of full-time jobs at the end of 2024. Britannica records that few people farm, that the farms are fairly large and concentrate on livestock and dairying, that the crops are maize, potatoes and cereals, and that the Alpine slopes are grazed in summer. Before 1945 the Lexikon describes a poor agrarian state; drainage of the Rhine valley floor had raised open arable land from about 370 hectares around 1800 to 1,530 hectares around 1870.

Tourism has never been large. The Lexikon's entry on it says so directly and gives the reason: the country lacked the scenery and the cultural assets that made neighbouring Graubünden a tourist region. Since the 1950s Liechtenstein has received about twice as many guests a year as it has residents, and in the 1950s the average guest already stayed only two nights. In 2007 about 40 hotels and inns offered 1,323 beds. The Malbun valley, lived in only during summer, became a winter sports resort between 1962 and 1979, with five ski lifts, two chairlifts and nine hotels.

Hotels recorded 228,579 overnight stays in 2024, 2.8% more than in 2023. Swiss guests accounted for 46.1% and German guests for 21.7%, and nights spent by Swiss guests rose from 46,717 in 2019 to 92,590 in 2024. Net room occupancy averaged 53.3% in 2024, against 43.7% in 2019. Accommodation and food service generated 0.9% of value added in 2023.

Liechtenstein imports more than 85% of its energy. In 2010 it produced 80,105 megawatt hours of electricity, 94.2% of it from hydropower, and consumed about 350,645. The Lawena power station was built in 1925 and 1926, and the Samina power station followed in 1949. The Austrian Economic Chamber reports that solar capacity was expanded in 2025 and that the commune of Balzers has an estimated wind potential of about 90 gigawatt hours a year.

What the IMF sees as Liechtenstein's economic risks

The IMF's Article IV report on Liechtenstein, published on 27 March 2026, found high incomes, low unemployment and a strong fiscal position in an economy highly exposed to global and geopolitical shifts. It asked for rising medium-term spending pressures to be quantified in the fiscal plans, for action on the sustainability of the pension system and for reforms to address skills shortages and raise labour supply. It found productivity above that of comparable economies, with the gap narrowing.

The labour question follows from the commuter figures. Employment fell slightly in 2025 after decades of growth, and the Austrian Economic Chamber calls the shortage of labour the greatest challenge the economy faces. The resident population is ageing quickly: the median age was 45.3 in 2024, against 37.4 in 2003.

The two current estimates of growth disagree. The Austrian Economic Chamber's June 2026 report gives growth of about 1% for 2025 and forecasts a contraction of 0.4% in 2026. The Liechtenstein-Institut's estimate for the government, with data to the end of June 2026, puts real growth in 2025 at about minus 3%, in the context of United States tariffs, after real growth of about 5% in 2024.

Part of the uncertainty is built into the statistics. The national accounts rely on tax assessment data, so a first estimate of output appears fourteen months after the year ends and final results after twenty-three. The IMF lists more timely national accounts and a balance of payments among the priorities.