Switzerland and the Principality of Liechtenstein enjoy excellent, friendly relations with traditionally close ties. Sharing the same fundamental values, the two countries form a common economic and monetary area with open borders.
Bilateral relations Switzerland–Liechtenstein
Key aspects of diplomatic relations
The two countries have developed a dense network of treaties, including the Customs Treaty of 1923, under which Liechtenstein became part of the Swiss economic area. Diplomatic relations are characterised by numerous visits at all levels.
In their respective foreign policies, the two countries safeguard the same interests and values in many areas. They cooperate regularly and closely in such bodies as the UN and in connection with the International Criminal Court.
The common economic and currency area has led to the creation of strong economic ties between the two countries.
The Customs Treaty of 1923 in effect created a customs union based on the principle of open borders. Liechtenstein’s export statistics do not itemise trade with and via Switzerland. For this reason, trade between Switzerland and Liechtenstein can hardly be measured.
A double taxation agreement between Switzerland and Liechtenstein came into effect in 2017. Moreover, the automatic exchange of information in tax matters (AEOI) has applied since the start of 2018, with the result that the first exchange of financial account information will be made in autumn 2019.
Of Liechtenstein's 37,453-strong work force (as at December 2016), more than half are cross-border commuters; of these, some 55% are resident in Switzerland.
There is a lively cultural exchange between Switzerland and Liechtenstein. For example, agreements have been signed on Liechtenstein's participation in two programmes for children and teenagers: 'Youth and Sports', which offers courses and camps in around 70 different sports disciplines, and 'Youth and Music', for the general promotion of musical activities.
Swiss nationals in the Principality of Liechtenstein
As at the end of 2016, more than 3,600 Swiss citizens were living in the Principality of Liechtenstein, not including those with dual nationality. This corresponds to approximately 10% of the population of Liechtenstein. A constitutional provision within the framework of the European Free Trade Association (EFTA) dating from 2003 limits the migration of Swiss nationals to Liechtenstein. Every year, 12 Swiss nationals are admitted into Liechtenstein to exercise a gainful activity and five to reside without a work permit.
History of bilateral relations
Relations between Switzerland and Liechtenstein became closer after the end of the First World War. Switzerland has safeguarded Liechtenstein’s interests abroad since 1919. With the Customs Treaty of 1923, the Principality of Liechtenstein joined the Swiss economic area. Liechtenstein introduced the Swiss franc as its official currency in 1924. This common economic area continues even following Liechtenstein’s accession to the European Economic Area (EEA) in 1995.
In 1919, Liechtenstein opened a legation in Bern, which – following a temporary closure – was transformed into an embassy in 1969. Switzerland appointed an ambassador for the Principality of Liechtenstein for the first time in the year 2000, with residence in Bern.