COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Liechtenstein Sectoral Adaptations - Review
Date: 2015-08-28
Institutions: European Commission, European External Action Service
Subjects: EFTA, European Economic Area, Liechtenstein, free movement of persons, free movement of workers, residence permit, right of establishment, transitional period (EU)

EUROPEAN 
COMMISSION 

Brussels, 28.8.2015  
COM(2015) 411 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

Liechtenstein Sectoral Adaptations - Review 

EN 

   EN 

 
 
 
 
  
 
1. 

INTRODUCTION 

Protocol  15  of  the  Agreement  on  the  European  Economic  Area  (EEA  Agreement)  on  transitional 
periods  on  the  free  movement  of  persons  stated  that  Liechtenstein  could  maintain  in  force 
quantitative  limitations  for  new  residents  until  1  January  1998  with  regard  to  nationals  of  EC 
Member States and other EFTA States. Decision No 1/95 of 10 March 19951 of the EEA Council on the 
entry  into  force  of  the  Agreement  on  the  European  Economic  Area  for  the  Principality  of 
Liechtenstein  included  a  special  Declaration  by  the  EEA  Council  on  the  free  movement  of  persons. 
This  Joint  Declaration  states  that  a  review  is  to  be  carried  out  at  the end  of a  transitional  period 
provided for in Protocol 15 of the EEA Agreement, taking into account Liechtenstein’s ‘specific 
geographic  situation’.  The  same  Declaration  provides  some  guidance  on  what  this  specific 
situation  implies:  ‘The  EEA  Council  recognises  that  Liechtenstein  has  a  very  small  inhabitable 
area  of  rural  character  with  an  unusually  high  percentage  of  non-national  residents  and 
employees.  Moreover,  it  acknowledges  the  vital  interest  of  Liechtenstein  to  maintain  its  own 
national identity.’ 

After  the  expiry  of  Protocol  15  of  the  EEA  Agreement  on  the  free  movement  of  persons, 
Liechtenstein  and  the  European  Union  came  to  a  specific  arrangement  in  1999.  This  arrangement, 
known as the ‘Sectoral Adaptations’, was initially laid down in the Decision of the Joint Committee 
191/19992  and  then  incorporated  into  Annexes  V  (Free  movement  of  workers)  and  VIII  (Right  of 
establishment)  to  the  EEA  Agreement.  Under  the  Sectoral  Adaptations,  the  free  movement  of 
persons applies to Liechtenstein. However, EEA citizens wishing to take up residence in Liechtenstein 
have  to  obtain  a  residence  permit.  The  Adaptations  establish  a  minimum  number  of  permits  to  be 
issued to EEA citizens every year, constituting a yearly net increase in the residing EEA population of 
1.75 % (for economically active people) and 0.5 % (for economically inactive people) respectively3 of 

1 OJ L 86, 20.4.1995, p. 58. 
2 EEA JCD M 191/1999 of 17 December 1999 amending Annexes VIII (Right of establishment) and V (Free movement of 

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workers) to the EEA Agreement. 
Annex VIII (Right of establishment): 
‘Title II 

1.  The number of residence permits available annually for nationals of Iceland, Norway or an EU Member State 

exercising an economic activity in Liechtenstein shall be determined in such a way that the yearly net increase from 
the previous year in the number of economically active nationals of those countries resident in Liechtenstein is not 
less than 1.75 % of their number on 1 January 1998. 
[…] 

2.  The Liechtenstein authorities shall grant residence permits in a way that is not discriminatory and does not distort 
competition. Half of the net increase in the permits available shall be granted in accordance with a procedure that 
gives an equal chance to all applicants. 

3.  Residents who have a short-term permit and who exercise an economic activity shall be included in the quota. 

[…] 
The number of short-term permits available for the purposes of exercising an economic activity shall not deviate by 
more than 10 % from what it was in 1997. 
Title III 

Family members of nationals of Iceland, Norway and EU Member States residing lawfully in Liechtenstein shall have the 
right to obtain a permit of the same validity as that of the person on whom they depend. They shall have the right to take 
up an economic activity, in which case they will be included in the number of permits granted to economically active 
persons. 

Title V 

A supplementary annual quota of 0,5% of the basis referred to in point II shall be available for persons who wish to take 
up residence […]’ 

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their  number  in  1998.  Obtaining  residence  permits,  however,  is  not  a  prerequisite  to  work  in 
Liechtenstein. 

In  the  course  of  the  2004  enlargement,  these  arrangements,  first  agreed  for  a  term  of  five  years, 
were continued, subject to the requirement that they should be reviewed every five years. Following 
the first review in 2009, a second review was launched in 2014. 

This Communication is part of that review. Its focus is on whether Liechtenstein should be allowed to 
continue applying these restrictions to the number of residence permits it grants. 

2.  

SECTORAL ADAPTATIONS IN PRACTICE 

Liechtenstein issues yearly reports on how it applies the Adaptations. It then shares the reports with 
its  EU  counterparts  and  the  European  Free  Trade  Association  (EFTA)  Surveillance  Authority.  The 
information provided below is based on the report Liechtenstein submitted in 2014.  

The Liechtenstein authorities can issue a minimum of 56 new residence permits and around 300 new 
short-term permits (not exceeding 12 months) a year to EEA citizens exercising an economic activity 
in Liechtenstein. Every year Liechtenstein fulfils its quota obligations for new permits. The number of 
short-term permits is usually below 300. A supplementary quota is available for people who are not 
exercising  an  economic  activity  and  who  wish  to  take  up  residence  in  Liechtenstein.  This  quota  is 
around  20  permits  a  year.  There  are  no  restrictions  preventing  family  members  of  a  holder  of  a 
residence permit from joining their spouse/family and taking up residence in Liechtenstein. They also 
have the right to take up an economic activity. 

Year 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

2009 

2010 

2011 

Number of applications by 
economically active people 

Number of applications by economically 
inactive  people 

502 

516 

467 

500 

436 

555 

615 

801 

657 

587  

598  

3 

53 

45 

31 

24 

16 

26 

33 

44 

33 

25  

41 

 
2012 

2013 

483 

464 

27 

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Following the 2009 review, the specific arrangements remained unchanged. 

3.  

THE 2014 REVIEW 

The current review process started in 2014. 

The  latest  figures  provided  by  Liechtenstein  (see  table  above)  show  a  significant  decline  in  the 
number of applications for residence permits by economically active and inactive people, following a 
peak in 2008. The number of applications nevertheless remains 16-23 times higher than the allocable 
minimum quota, in particular for economically active people. 

In  the  consultations  between  the  European  Commission,  the  European  External  Action  Service  and 
Liechtenstein  on  a  possible  change  to  the  current  rules,  Liechtenstein  argued  that  its  absorption 
capacity remained rather limited and had not changed during the review period. It also argued that 
the  Joint  Declaration  on  Liechtenstein’s  Sectoral  Adaptations,  attached  to  the  2014  Agreement  on 
the participation of Croatia in the EEA, basically reconfirmed that Liechtenstein’s absorption capacity 
was unchanged.4 Liechtenstein therefore suggested that the specific arrangements for Liechtenstein 
should not be changed and that the next review should take place before May 2019. 

In  the  course  of  the  review,  the  Commission  assessed  whether  there  had  been  a  change  in 
Liechtenstein’s specific geographic situation and in the circumstances described in Decision No 1/95 
of the EEA Council, namely that (a) Liechtenstein has a very small inhabitable area of rural character; 
and (b) Liechtenstein has an unusually high percentage of non-national residents and employees and 
a vital interest in maintaining its national identity. 

The result of the assessment is as follows: 

(a) Liechtenstein occupies a territory of 160 square kilometres that has not changed; 

(b) Liechtenstein’s population is 36 925. It has grown by more than 4 000 people since 1998 (32 227), 
the  reference  year  for  the  Adaptations,  and  by  around  1 300  since  2009  (35 851),  the  year  of  the 
previous  review.  This  might  not  seem  high  in  real  terms  but  translates  into  increases  of  14 %  and 
around 3 % respectively. The proportion of foreigners has also been rising, up to 33.5 % in 2012 from 
33.3 % the previous year, half of whom are EEA citizens. The number of employees is almost equal to 
the  number  of  residents  (over  35 800  persons),  52 %  of  whom  commute  from  neighbouring 
countries. 

4 ‘The Present Contracting Parties and the New Contracting Party, 

- 

- 

[…] 
Observing an ongoing high demand from nationals of EU and EFTA States to reside in Liechtenstein, surpassing 
the net immigration rate set out in the abovementioned sectoral adaptations, 
Considering that the participation of Croatia in the EEA results in a higher number of nationals having the right of 
invoking the free movement of persons as enshrined in the EEA Agreement, 

Agree to duly take into account this factual situation as well as the unchanged absorption capacity of Liechtenstein when 
reviewing the sectoral adaptations in Annexes V and VIII to the EEA Agreement.’ 

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These numbers seem to confirm the special geographic nature and the limited absorption capacity of 
Liechtenstein. 

The high demand for residence permits, despite the difficulties in obtaining them, is most probably 
explained  by  the  fact  that  different  tax  rules  apply  to  Liechtenstein  residents  compared  with  non-
residents. As long as these differences remain, it is to be expected that people will want to officially 
reside  in  Liechtenstein  and  will  apply  in  relatively  high  numbers  for  residence  permits,  making  it 
necessary to maintain certain restrictions on the number of annual permits issued. 

The Council European Free Trade Association (EFTA) working party was debriefed about this issue on 
5 September 2014 and subsequently on 30 April 2015. No Member State raised concerns about the 
continuation of the current regime. 

4.  

CONCLUSIONS 

In view of the above, the Commission does not see the need to make any change to the current rules 
and  considers  that  the  provisions  on  the  Sectoral  Adaptations  can  remain  unchanged.  A  review  of 
these provisions should take place before May 2019. 

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