Liechtenstein And Belgium Sign Zero Withholding Tax Treaty: Why International Groups, Funds And Family Offices Should Reassess Their European Structures Now

Josef Bergt

2026

Liechtenstein and Belgium have taken a material step in the further integration of their tax, investment and legal relations, as Prime Minister Brigitte Haas and Belgian Prime Minister Bart De Wever signed a double taxation agreement on 4 May 2026 during the 8th European Political Community Summit in Yerevan, a development which, although technical at first sight, may become commercially relevant for corporate groups, private clients, investment funds, holding structures, technology ventures, family offices and financial intermediaries with Belgian and Liechtenstein exposure.

The agreement is important not merely because it extends Liechtenstein’s growing treaty network, but because it reflects a more mature phase in Liechtenstein’s international tax positioning, namely a phase in which the jurisdiction no longer competes by opacity, regulatory arbitrage or historical privilege, but by legal certainty, treaty access, financial sophistication, EEA integration and institutional reliability, all of which are decisive where investors, entrepreneurs and family offices require a jurisdiction that is at once European, stable, discreet, compliant and commercially efficient.

According to the Government of Liechtenstein, the treaty regulates the elimination of double taxation between Belgium and Liechtenstein, creates clearer conditions for individuals and legal entities in cross-border situations, follows the international OECD standard and takes into account the OECD and G20 BEPS framework designed to prevent base erosion and profit shifting in international arrangements.

The most commercially significant element, however, is the announced withholding tax treatment: the agreement provides that, in order to promote cross-border investment, no withholding taxes are to be levied on group dividends, loans between companies and royalties, subject of course to the final treaty text, its entry into force, the applicable domestic implementing rules and anti-abuse standards.

This may matter considerably, because withholding tax friction often determines whether an international holding, financing or licensing structure is merely elegant on paper or genuinely efficient in practice, especially where profit distributions, intra-group funding, intellectual property licensing or fund-linked payments must move across borders without avoidable tax leakage, excessive refund procedures or uncertainty around treaty relief.

For Belgian investors, Liechtenstein should therefore be viewed not only as a small financial centre between Switzerland and Austria, but as a jurisdiction that combines access to the European Economic Area with proximity to the Swiss economic and currency area, a civil law foundation, a sophisticated corporate and foundation law system, an increasingly dense treaty network and a regulatory environment that is particularly relevant for wealth structuring, investment funds, holding companies, private wealth platforms, fintech, blockchain, trusts, foundations and cross-border entrepreneurial groups. Liechtenstein officially joined the EEA on 1 May 1995 and became a full participant in the European single market, while Switzerland confirms that Liechtenstein also remains integrated into the Swiss economic area through the 1923 Customs Treaty and the use of the Swiss franc.

For Liechtenstein investors and corporate groups, Belgium may equally become more attractive as a treaty partner, particularly where Belgian operating companies, research and development activity, logistics, European headquarters functions, intellectual property exploitation, private equity investments or family-owned businesses require a predictable legal route for dividends, interest-like financing income and royalties to be aligned with a Liechtenstein parent, shareholder, lender, licensor, fund vehicle or asset structure.

A further point deserves attention: the Government’s announcement expressly refers to the treaty treatment of asset structures, investment funds and pension funds, which suggests that the agreement is not limited to conventional corporate tax planning, but may also be relevant for more sophisticated institutional, fiduciary and private wealth configurations, including Liechtenstein foundations, establishments, trusts, investment undertakings and pension-related vehicles, depending on the precise drafting of the final treaty provisions and their interpretation by the competent authorities.

The agreement also provides for a mutual agreement procedure with an arbitration clause for complex double taxation cases, which is an important practical safeguard, because modern cross-border disputes increasingly arise not from the existence of tax but from the interaction of two reasonable, but inconsistent, tax positions taken by two states, for example on residence, beneficial ownership, permanent establishments, transfer pricing, fund qualification or the attribution of income to a particular person or vehicle.

From a compliance perspective, the treaty also follows the modern international architecture of transparency. The Government states that exchange of information will follow the international standard, while automatic exchange of financial account information will continue to be handled through the Liechtenstein EU agreement on automatic exchange of information, and that administrative assistance in enforcement has also been agreed.

This is not a disadvantage. It is the condition under which sophisticated international structuring can remain durable. Serious clients no longer seek structures that cannot be explained. They seek structures that can withstand regulatory review, banking due diligence, tax authority scrutiny, succession planning, investor onboarding and reputational examination. In that environment, a treaty based structure is often stronger than an informal arrangement, because it converts assumptions into legal architecture and replaces improvisation with documented analysis.

The timing is also relevant. The Liechtenstein Fiscal Authority’s treaty overview identified Belgium as an agreement that had been initialed on 27 November 2024, but not yet in force at that time, while the Government’s May 2026 announcement records the formal signature of the agreement. Businesses should therefore monitor the remaining ratification and entry into force steps carefully, because treaty benefits usually depend not only on signature, but on the completion of domestic procedures, the exchange of ratification instruments and the effective date rules for withholding taxes and other taxes.

In practical terms, companies and investors should not wait until the first distribution, royalty payment, financing transaction or exit event occurs. Existing structures should be reviewed now, because treaty eligibility is often determined by facts that must be in place before payment, including tax residence, beneficial ownership, board substance, commercial rationale, transfer pricing support, accounting treatment, group documentation, financing terms, intellectual property ownership and the absence of abusive treaty shopping.

The treaty may be especially relevant in the following situations: Belgian operating companies held through Liechtenstein structures, Liechtenstein private wealth vehicles with Belgian assets or beneficiaries, Belgian founders considering a Liechtenstein holding or family office platform, Liechtenstein companies licensing technology into Belgium, intra-group financing between Belgian and Liechtenstein entities, fund structures with Belgian investors or Belgian portfolio exposure, and succession planning where assets, shareholders, family members or management functions are divided between both jurisdictions.

At the same time, the agreement should not be misunderstood as a mechanical tax reduction tool. Modern tax treaty practice, particularly after BEPS, requires coherence between legal form and economic substance. A Liechtenstein vehicle that is properly governed, capitalised, documented, managed and integrated into a genuine commercial or private wealth strategy stands in a fundamentally different position from a conduit entity inserted shortly before a payment only to obtain a treaty advantage.

The legal question is therefore not merely whether the treaty grants relief. The decisive question is whether the taxpayer can demonstrate that the structure deserves the relief. This distinction is where legal planning, tax analysis, regulatory understanding and documentation quality become decisive.

For international families, the agreement may provide an additional reason to consider Liechtenstein as a European private wealth jurisdiction, particularly where wealth must be administered across generations, jurisdictions and asset classes, and where the legal structure must reconcile estate planning, asset protection, governance, philanthropy, family business continuity, regulatory compliance and tax transparency within one coherent design.

For corporate groups, the treaty may improve the attractiveness of Liechtenstein holding, finance and licensing structures, provided that those structures are not isolated tax devices but part of a genuine operational, investment or ownership model. For funds and institutional investors, the express reference to investment funds and pension funds may become particularly relevant once the final text and administrative practice are available.

For entrepreneurs, the agreement strengthens the case for Liechtenstein as a jurisdiction from which to build, hold, finance or expand European business models, especially in sectors where capital, technology, licensing, digital assets, regulated financial services and cross-border investment converge.

Bergt Law, as a Liechtenstein law firm with a strong focus on corporate law, financial market regulation, fintech, blockchain, investment structures, private wealth and cross-border legal strategy, assists clients in assessing whether the new Liechtenstein Belgium tax treaty can improve existing or planned structures, and whether the legal, regulatory and governance conditions required for treaty protection can be implemented in a robust and defensible manner. Further information is available at bergt.law/en

Sources: Press Release Liechtenstein Government, May 4, 2025: Liechtenstein and Belgium Sign a Double Taxation Agreement

Executive Summary:

• Liechtenstein and Belgium signed a double taxation agreement on 4 May 2026, marking a significant step for bilateral investment and tax certainty.

• The agreement follows OECD standards and reflects the BEPS framework against treaty abuse, base erosion and profit shifting.

• The most relevant commercial feature is the announced zero withholding tax treatment for group dividends, intercompany loans and royalties, subject to the final treaty text, ratification and anti-abuse rules.

• The treaty also addresses asset structures, investment funds and pension funds, making it relevant beyond ordinary corporate tax matters.

• A mutual agreement procedure with arbitration may improve dispute resolution in complex cross-border tax cases.

• Automatic exchange of information and enforcement assistance confirm that the treaty belongs to the modern transparency-based tax environment.

• Belgian and Liechtenstein companies, investors, family offices, funds and entrepreneurs should review existing and planned structures before payments or reorganisations occur.

• Treaty access will depend not only on legal form, but on substance, beneficial ownership, governance, documentation and commercial rationale.

• Liechtenstein’s position as an EEA jurisdiction with close Swiss economic integration makes it a distinctive platform for European structuring, provided the structure is legally coherent and properly implemented.

• Bergt Law can assist with legal assessment, treaty analysis, governance design, regulatory review and cross-border implementation for clients with Liechtenstein and Belgian exposure.