Liechtenstein Cross-Border Employment, Home Office and Social Security Contributions: Why the A1 Certificate Has Become a Board-Level Risk in 2026

Josef Bergt

2026

Liechtenstein has always been more than a small jurisdiction with a disproportionately sophisticated financial and corporate sector. It is a labour market built on borders, precision and mobility. Employers in Liechtenstein may have management in Switzerland, engineers in Austria, sales teams in Germany, a board member in Zurich, a consultant in Milan, a shareholder in Dubai and a payroll process that, at first glance, appears administratively settled, until the practical question is asked with sufficient legal seriousness: in which country is the individual actually insured for social security purposes?

That question, which is often treated as a payroll detail rather than a strategic legal issue, has become increasingly important because hybrid work, cross-border commuting, multi-state management, remote board activity, platform-based advisory work and temporary postings have created factual patterns that no longer fit the traditional model of one employee, one workplace, one employer and one state.

The core rule remains deceptively simple. European social security coordination does not create a single European social security system. It coordinates national systems, which continue to apply their own contribution rules, benefits, administrative procedures and enforcement practices. The purpose of that coordination is to avoid both double coverage and gaps in coverage, while preserving the mobility of workers, managers and self-employed persons within Europe. Regulation (EC) No. 883/2004 and Regulation (EC) No. 987/2009 form the central architecture for the EU and EEA coordination framework, including Liechtenstein as an EEA State. 

For Liechtenstein, the starting point is the place-of-work principle. In broad terms, a person is socially insured where the work is physically performed, not necessarily where the employment contract was signed, where the employer is incorporated, where payroll is processed, where the employee resides, or where the parties intended the relationship to be economically anchored. The Liechtenstein AHV-IV-FAK guidance emphasises that social security law must be distinguished from tax law and that a person insured with the Liechtenstein AHV is, as a general proposition, also subject to Liechtenstein rules for other social insurance branches, subject to exceptions and sector-specific particularities. 

This distinction is commercially relevant. A tax analysis may conclude that no permanent establishment, no wage tax issue, or no material income allocation concern arises. That conclusion does not settle the social security position. A person may be tax-resident in one jurisdiction, employed by a company in another, work partly from a third, and fall under a fourth set of administrative obligations if the coordination rules, exceptions and bilateral arrangements point in that direction.

The Strategic Risk: One Employee Can Move the Entire Contribution Position

For employers, the legal exposure often begins with a small operational concession. A senior employee living in Austria works from home every Monday. A Swiss resident director travels to Liechtenstein but performs preparatory work from home. A German employee of a Liechtenstein company spends one week per month with customers outside Liechtenstein. A founder, who is also formally self-employed, accepts a Liechtenstein board position. A consultant is treated as independent in one country but as employee-like under Liechtenstein social security classification.

In each case, the analysis may shift from a simple place-of-work question to a multi-state coordination exercise.

The EU and EEA system generally seeks to ensure that one social security legislation applies at a time. Yet that rule is not mechanical. Where a person works in several states, the decisive factors may include residence, the percentage of activity performed in the residence state, the number of employers, the location of the employer’s registered office or place of business, whether the person is employed or self-employed, whether a public law status applies, and whether the activity in one state is merely marginal. The Liechtenstein AHV materials use practical thresholds, including the familiar 25% test for a substantial part of activity in the residence state and a 5% threshold as an indicator for marginal activity. 

The result is that social security is no longer a back-office calculation. It is part of legal structuring, human resources governance, cross-border tax design, board composition, due diligence and transactional risk management.

Home Office: The 25% Trap and the Less-Than-50% Opportunity

The most important current development for many Liechtenstein employers is cross-border telework. During the pandemic, exceptional administrative tolerance allowed many cross-border employees to work remotely without immediately changing their social security affiliation. That temporary logic has ended. Since July 2023, the relevant question is whether the facts fall under the ordinary coordination rules or whether the multilateral framework agreement for cross-border telework can be used.

Under the ordinary position, telework in the residence state may become decisive if it reaches or exceeds 25% of working time. The Liechtenstein National Administration expressly notes that the physical place of work remains a decisive criterion and that telework from the residence state may cause a change in the applicable social security law, for example where the work in the residence state reaches 25% or more. 

The multilateral framework agreement provides a valuable but conditional solution. If the relevant states have signed the agreement, and if the employee works for one or more employers in the same employment state, performs the same type of work remotely through information technology, and carries out less than 50% of total working time as telework in the state of residence, an application may allow the employee to remain insured in the employer’s state rather than moving to the social security system of the residence state. Liechtenstein, Austria, Germany and Switzerland are among the signatory states, which is particularly significant for the regional labor market around Liechtenstein. 

This is not automatic. The framework requires a request, the consent of employer and employee, and a situation within the material and personal scope of the arrangement. The Belgian Federal Public Service Social Security, acting as depositary, describes the framework as a mechanism facilitating individual derogations where the employee’s residence state differs from the employer’s state, the cross-border telework in the residence state remains below 50%, and the request is made with mutual consent.

For Liechtenstein employers, this creates a practical compliance imperative. A remote work policy that merely states “up to two home office days per week” is legally incomplete if it does not address the residence state, the applicable treaty framework, the A1 process, the employee’s other activities, the calculation period, and the consequences of exceeding the agreed threshold.

The A1 Certificate: Administrative Paper, Legal Evidence, Commercial Protection

The Portable Document A1 is often underestimated because it looks like an administrative form. In substance, it is evidence of the applicable social security legislation and is crucial where work crosses borders. The Liechtenstein AHV guidance explains that the competent authority issues the relevant confirmation once the applicable system has been determined, so that another work state should not levy parallel contributions. 

The practical importance is obvious. Without a properly issued A1 certificate, an employer may face questions during labor inspections, payroll audits, project postings, group restructuring, or transactional due diligence. The risk is not merely retrospective contribution liability. It may include administrative disruption, employee dissatisfaction, uncertainty regarding benefits, difficulties in secondments, and documentary weaknesses in M&A, licensing or regulatory reviews.

Liechtenstein’s AHV information also clarifies that, for cross-border telework between 25% and less than 50%, the Office of Public Health is competent for the relevant approval process, while telework below 25% must be notified to the competent institution in the state of residence, with applications for persons resident in Liechtenstein addressed to the AHV-IV-FAK Anstalten. 

Why Liechtenstein Is a Special Case

Liechtenstein is not merely another EEA jurisdiction. Its location between Switzerland and Austria, its proximity to Germany, its high share of cross-border labor, and its role as a platform for financial services, private wealth, holding structures, fintech, blockchain, industrial groups and international advisory businesses make social security coordination unusually important.

The EU and EEA rules are only one part of the map. Switzerland is not an EU or EEA Member State, although it participates in social security coordination through separate legal instruments. The relationship between Liechtenstein and Switzerland is therefore not identical to the relationship between Liechtenstein and Austria or Germany. The Liechtenstein materials explain that the Vaduz Convention and bilateral arrangements must be considered, and that the absence of a single umbrella agreement between the EU, EEA and Switzerland can create difficult triangulation cases, especially where citizenship, residence and work location do not align neatly. 

The United Kingdom adds another layer. Following Brexit, the EEA EFTA States, including Liechtenstein, and the United Kingdom concluded a social security coordination convention, which entered into force on 1 January 2024. For businesses with UK directors, employees, assignees or consultants, the old assumption that EU-style coordination automatically governs every European mobility case is therefore no longer safe. 

Board Members, Founders and Self-Employed Persons

One of the most overlooked areas concerns board members and founders who assume that their position is not payroll-relevant because they are not ordinary employees. That assumption may be wrong.

Under Liechtenstein practice, the function of an organ of a legal entity, such as a board member, may be treated as an employed activity for social security classification purposes. Where the same person also performs self-employed work in another state, or has an employment relationship elsewhere, the coordination rules may lead to a different result than expected. The legal analysis must therefore begin with the actual classification of each activity and must then determine which state’s law applies to the total earnings profile. 

This is particularly relevant for holding companies, family office structures, start-ups, investment vehicles and fintech entities, where the same person may simultaneously be shareholder, director, consultant, entrepreneur and employee. The labels used in corporate documents do not necessarily control the social security outcome.

Employer Cost, Contribution Rates and Payroll Governance

The financial impact is not theoretical. Liechtenstein’s AHV-IV-FAK contribution framework is material for both employee and employer. The current AHV information states that employers deduct 4.7% from employees for AHV-IV and pay 4.9% themselves, with additional employer-side FAK and administrative cost contributions, producing a stated total of 12.075% for the listed AHV, IV, FAK and administrative cost components. 

In cross-border cases, the question is not simply whether Liechtenstein rates are attractive or predictable. The key issue is certainty. Employers should know, before work begins or before a remote work pattern is approved, whether Liechtenstein, Austria, Germany, Switzerland, the United Kingdom or another state will assert jurisdiction, and whether a certificate or derogation is needed.

Practical Guidance for Liechtenstein Employers and International Groups

A serious cross-border social security review should not start with the payroll software. It should start with the factual matrix.

The employer should identify where each person physically works, where each person resides, what citizenship or treaty status is relevant, whether there is one employer or several, whether board activities exist, whether consultancy income is treated as self-employed income, whether a person travels regularly, whether home office is occasional or structural, whether remote work exceeds 25%, whether the framework agreement can be used up to less than 50%, whether an A1 certificate has been issued, and whether the current documentation matches reality.

The same review should be performed before hiring a cross-border employee, approving a home office arrangement, appointing a foreign resident director, sending personnel abroad, acquiring a Liechtenstein company, relocating a founder, or establishing a Liechtenstein entity as part of a European market-entry structure.

Why Legal Advice Should Be Sought Early

Social security errors are rarely dramatic on day one. They accumulate quietly. The employment contract is signed, remote work becomes normal, payroll continues, the board meets remotely, the employee changes residence, a second employer is added, a project assignment becomes permanent, and only later does the question arise whether the person was insured in the correct country.

By then, the correction is more expensive, more political and more difficult to explain.

For companies, founders, board members, family offices and regulated businesses operating through Liechtenstein, the better approach is preventive. The legal structure, employment design, payroll treatment and A1 documentation should be aligned before the facts harden.

Bergt Law advises Liechtenstein and international clients on corporate law, employment-related structuring, financial market regulation, fintech, blockchain, cross-border governance and regulatory risk. For tailored advice on Liechtenstein cross-border employment, home office structures and social security coordination, visit bergt.law/en

Sources: AHV-IV-FAK Contributions, Principles of International Social Security Law including a section on telework, AHV-IV-FAK Institutions Lecture notes, as of January 2024.

Executive Summary:

• Liechtenstein social security analysis must begin with the actual place of work, not merely with residence, payroll location, contractual governing law or company seat.

• EU and EEA coordination rules seek to avoid double insurance and insurance gaps, but they do not create a unified European social security system.

• Cross-border home office can alter the applicable social security system if the employee performs a substantial part of the work in the residence state.

• The multilateral telework framework allows less than 50% remote work in the residence state without changing the social security jurisdiction, but only where the conditions are met and the relevant states have signed.

• The 25% threshold remains highly relevant because telework between 25% and less than 50% usually requires a formal application or derogation process.

• The A1 certificate is not a formality. It is central evidence of the applicable social security legislation and should be obtained before risk crystallises.

• Liechtenstein, Austria, Germany and Switzerland are all highly relevant signatory states for the regional home office and commuter economy.

• Switzerland and the United Kingdom require separate attention because their coordination relationships with Liechtenstein do not follow the same route as ordinary EU and EEA cases.

• Board members, founders and consultants may create hidden exposure where corporate, employment and self-employment functions overlap.

• Every Liechtenstein employer with cross-border personnel should review remote work policies, payroll processes, A1 documentation and director arrangements before approving or continuing multi-state work patterns.