COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Liechtenstein Sectoral Adaptations - Review
Date: 2023-07-27
Institutions: European Commission, Secretariat-General
Subjects: EFTA, European Economic Area, Liechtenstein, free movement of persons, free movement of workers, residence permit, right of establishment, transitional period (EU)

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   EUROPEAN COMMISSION  Brussels, 27.7.2023  COM(2023) 458 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Liechtenstein Sectoral Adaptations - Review  
 
 
1. 

INTRODUCTION 

Article 5(2) of Protocol 15 of the Agreement on the European Economic Area (EEA Agreement) on 
transitional periods on the free movement of persons1 stated that Liechtenstein could maintain in force 
quantitative limitations for new residents until 1 January 1998 with regard to EU citizens and nationals 
of other European Free Trade Association (EFTA) States, to be gradually reduced. Decision No 1/95 
of  10  March  19952  of  the  EEA  Council  on  the  entry  into  force  of  the  Agreement  on  the  European 
Economic Area for the Principality of Liechtenstein included a Declaration by the EEA Council on the 
free  movement  of  persons.  This  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’.  

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  No 191/19993 
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,  EU  citizens  and  nationals  of  other  EEA  countries  wishing  to  take  up 
residence  in  Liechtenstein  have  to  obtain  a  residence  permit.  The  Sectoral  Adaptations  establish  a 
minimum number of permits to be issued to EU citizens and nationals of other EEA countries every 
year,  constituting  a  yearly  net  increase  in  the  residing  EU/EEA  population  of  1.75 %  (for 
economically  active  people)  and  0.5 %  (for  economically  inactive  people)  respectively4  of  their 
number in 1998. Obtaining a residence permit, however, is not a prerequisite to work in Liechtenstein. 

In the course of the 2004 enlargement of the European Union, 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 carried out in 2014. After the first two 

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3  

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OJ L 1, 3.1.1994, p. 176. 
OJ L 86, 20.4.1995, p. 58. 
EEA Joint Committee Decision No 191/1999 of 17 December 1999 amending Annexes VIII (Right of establishment) 
and V (Free movement of workers) to the EEA Agreement, OJ L 74, 15.3.2001, p. 29. 
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 IV 
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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reviews, the specific arrangements remained unchanged. The third review (for the period 2014-2018) 
was due to take place in 2019 but was delayed. 

This Communication constitutes the third review and addresses the question whether it is appropriate 
to continue applying these restrictions to the number of residence permits granted by Liechtenstein. 

2.  

SECTORAL ADAPTATIONS IN PRACTICE 

Liechtenstein  issues  yearly  reports  on  how  it  applies  the  Sectoral  Adaptations.  It  then  shares  the 
reports  with  its  EU  counterparts  and  the  EFTA  Surveillance  Authority.  The  information  provided 
below is based on the reports by Liechtenstein for the years 2014 until 2018.  

On  the  basis  of  the  Sectoral  Adaptations,  the  Liechtenstein  authorities  must  make  available  a 
minimum  of  56  new  residence  permits  and  around  300  new  short-term  permits  (not  exceeding  12 
months) a year to EU citizens and nationals of other EEA countries exercising an economic activity in 
Liechtenstein.  Liechtenstein  fulfilled  its  quota  obligations  for  new  permits  for  each  of  the  years 
reported  on  (table  2  below).  A  supplementary  quota  of  16  permits  per  year  is  available  for  persons 
who are not exercising an economic activity and who wish to take up residence in Liechtenstein. 

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.  These  family  members  also  have  the 
right to take up an economic activity. 

Table 1: Number of applications by economically active and economically inactive persons 2014-
2018 

Year 

2014 

2015 

2016 

2017 

2018 

Number of applications by 
economically active persons 

Number of applications by economically 
inactive persons 

517 

488 

599 

657 

706 

16 

44 

71 

94 

133 

Table 2: Number of permits awarded to economically active and economically in active persons 
2014-2018 

Year 

2014 

2015 

Number of permits awarded to 
economically active persons 

Number of permits awarded to 
economically inactive persons 

70 

67 

17 

22 

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2016 

2017 

2018 

58 

70 

69 

3.  

THE 2019 REVIEW 

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16 

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The current review process started in 2019, and, due to delays, is being completed in 2023 with a view 
to a timely launch of the 2024 review for the period 2019-2023. 

The figures provided by Liechtenstein for the period 2014-2018 (see table 1 above) show an increase 
in the number of applications for residence permits by economically active persons and a significant 
increase  in  the  number  of  applications  for  residence  permits  by  inactive  persons.  The  number  of 
applications is substantially higher than the minimum quota of permits to be awarded. 

In the consultations between the European Commission 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. Liechtenstein  took the position that the specific arrangements for 
Liechtenstein  should  not  be  changed  and  that  the  2019-2023  review  should  take  place  before  May 
2024. 

In the course of the review and as specified in Decision 1/95 of the EEA Council, the Commission had 
to take into account 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 first circumstance being a constant, in relation to the second one, the Commission notes that in the 
reference  period  2014-2018,  Liechtenstein’s  population  has  grown  by  1 014  people  from  37 366  to 
38 380  people,  which  represents  a  2.7%  increase.  For  the  same  period,  the  number  of  non-national 
residents grew from 6 451 at the beginning of 2014 to 6 855 at the beginning of 2018, an increase of 
6.3%. In 2018, out of the 38 380 people, 34% were non-national residents.5 This data shows that the 
proportion of non-national residents in Liechtenstein remained high through the reference period.  

The European Free Trade Asssociation (EFTA) working party of the Council was debriefed about this 
issue  on  24  January  2023  and  subsequently  on  7  February  2023.  No  Member  State  raised  concerns 
about the continuation of the regime for 2014-2018. 

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 at this point in 
time. Nevertheless, the Commission notes that the formula to calculate the annual quota and the basis 
for the calculation have remained unchanged in the last 24 years.  

5  

Annual Reports on application of EEA Joint Committee Decision No. 191/1999 in the area of free movement of 
persons in Liechtenstein (2014-2018) 

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In light of the shared objective of providing for the fullest possible realization of the free movement of 
persons,  as  stated  by  the  EEA  Agreement,  the  parties  could  examine  whether  a  modification  of  the 
Sectoral  Adaptations  would  be  appropriate  in  the  context  of  the  fourth  review  of  the  sectoral 
adaptations scheduled to take place in 2024. 

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