Why is Liechtenstein so rich? It isn't the answer you'd expect

Ask almost anyone why Liechtenstein is so rich and you’ll hear “banks”. It’s a convenient answer and a fairly incomplete one. The figures from the country’s Office of Statistics tell a different story, about a place with far more industry than you’d guess and an economy that looks more like an industrial corner of Switzerland than an offshore financial centre.

A country of factories

Industry and manufacturing generate 40.4% of Liechtenstein’s gross value added, and the Office of Statistics points out that 32% of all jobs are in that sector, which it calls exceptionally high by European standards. There are 644 industrial firms, many of them with fewer than 50 staff, spread across very different niches. The biggest branches are machinery, equipment, dental products, vehicles, food and construction. It shows in the public accounts too. The state and the municipalities together took in about CHF 1,086 million in tax in 2024, and the Office of Statistics notes that the state’s own share of the economy is comparatively small.

With a tiny home market, the larger firms sell almost everything abroad. Their main markets are Switzerland, Germany and the United States, and direct goods exports to countries other than Switzerland alone came to CHF 3,210 million in 2024. Two names explain a great deal. One is Hilti, founded in Schaan in 1941 and now employing more than 34,000 people worldwide, covered on its own page, Hilti in Liechtenstein. The other is Ivoclar, which arrived in 1933 as a false-teeth factory and is now a global dental group, as explained on Liechtenstein and false teeth.

What about the banks?

They matter, but less than the cliché suggests. Financial services and insurance account for 10.1% of value added. In 2024 there were 10 banks in the country, employing 2,985 people and managing CHF 217.3 billion in assets. Add the legal and tax advisers and trust companies, which the Historisches Lexikon traces back to the 1920s, when the government set out to attract foreign capital with low taxes and very liberal company law. If you’re curious about the tax haven label and what changed after 2008, it’s on my page about banks and the tax haven reputation.

The pieces that make it work

There are several, and I don’t think any one of them would be enough alone. The first is Switzerland. Since 1924 Liechtenstein has shared customs and currency with it, which opened up a large market and gave it the Swiss franc. The second is Europe. Since 1995 it has been in the European Economic Area, which Switzerland turned down, giving it access to the EU single market without being a member.

The third is people from elsewhere. In late 2024 the country had 43,441 jobs filled against a population of 41,228, and 24,943 of those workers commuted across the border daily. Without them the factories wouldn’t run. The make-up of the resident population is set out in Liechtenstein’s population. The fourth is a long habit of courting business. In the depths of the 1930s slump, the government offered the Ramco false-teeth factory, the future Ivoclar, cheap land and five tax-free years to set up in Schaan. Today the official portal boasts of one company for every eight residents and a AAA credit rating.

GDP per head is misleading

Here’s the nuance hardly anyone mentions. Plenty of people measure Liechtenstein’s wealth by GDP per head, which comes out sky-high, but the Office of Statistics itself warns that this comparison gives misleading results. Some 58% of the people producing that wealth live abroad and don’t count as residents, so the ratio balloons. For a fair comparison, the office says, only GDP per worker will do. I find it refreshingly honest that the official statisticians spell that out so plainly.

What it means for your trip

You’ll feel it in the prices, which are Swiss and in francs, so I’d check what things cost beforehand on my page about prices and budget in Liechtenstein. But you’ll feel the upside too. The country’s wealth has left Vaduz with a Museumsmeile that includes the Kunstmuseum and the Hilti Art Foundation, and a valley where factories sit alongside vineyards and villages. Even the railway reflects it, since one of its three stops in the country is called Forst Hilti, after the Schaan company. Seeing the place with these figures in mind changes the visit quite a bit.