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Population:
Liechtenstein has a population of approximately 39,000 people (2023). The country has a high standard of living, and a significant portion of the population are foreign nationals, many of whom are commuters from neighboring Switzerland and Austria.
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Capital:
The capital of Liechtenstein is Vaduz, a small town with a population of about 5,500 people. It is the political and cultural center of the country and is known for its picturesque scenery and royal castle, Schloss Vaduz, which overlooks the town.
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Economic Strength:
Liechtenstein has one of the highest GDP per capita in the world and is considered a highly developed and industrialized country with a robust financial sector. Key sectors include:
- Finance and Banking: The financial sector is a major pillar of the economy, benefiting from favorable regulations and tax policies.
- Manufacturing: The country has a strong industrial base, particularly in precision instruments, pharmaceuticals, and dental products.
- Tourism: Although small, Liechtenstein attracts tourists with its alpine landscape and cultural attractions.
Liechtenstein’s economy is deeply integrated with Switzerland, with which it shares a customs and currency union.
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Culture:
Liechtenstein’s culture is influenced by Germanic traditions, reflecting its location between Switzerland and Austria. The official language is German, and the country celebrates traditional events such as Fasnacht (carnival) and Liechtenstein National Day (15 August). Liechtenstein is a constitutional monarchy under the rule of the Prince of Liechtenstein.
The country is known for its cultural institutions, including Vaduz Art Museum and Liechtenstein National Museum.
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Currency:
The official currency of Liechtenstein is the Swiss Franc (CHF), due to its economic union with Switzerland. The Euro is also widely accepted in many places, especially for larger transactions.
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Health Insurance and Social Security System:
Liechtenstein has a well-developed healthcare system based on mandatory health insurance. Residents are required to take out health insurance with an approved provider, and healthcare services are available to all insured persons. The system is funded through contributions from both employers and employees.
The social security system includes coverage for pensions, unemployment benefits, disability insurance, and accident insurance. Both employers and employees contribute to the social security funds.
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Costs for the Employer:
Employers in Liechtenstein are required to contribute to social security and health insurance for their employees. The key contributions include:
- Old Age and Survivors’ Insurance (AHV): The employer contributes 4.7% of the employee’s salary.
- Disability Insurance (IV): The employer contributes 0.7% of the salary.
- Unemployment Insurance (ALV): The employer contributes 0.5% of the salary.
- Accident Insurance: Employers cover 100% of this insurance, which varies based on the risk profile of the job.
- Pension Scheme: Employers must contribute to the second pillar of the pension system (occupational pensions), typically 7% to 18%, depending on the employee’s age.
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Salary and Bonuses in Liechtenstein:
In Liechtenstein, salaries are generally high, with sectors like finance and manufacturing offering competitive wages. Bonuses are common, especially in the financial sector, and are often based on performance.
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Payslip:
A payslip in Liechtenstein includes:
- Gross Salary
- Deductions:
- Income Tax: Liechtenstein has a progressive tax system with relatively low rates.
- Social Security Contributions: Including old-age pension, unemployment insurance, disability insurance, and health insurance.
- Accident Insurance
- Net Salary
- Additional details such as pension contributions and any performance-based bonuses.
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Public Holidays:
Liechtenstein observes several public holidays throughout the year, including:
- New Year’s Day (1 January)
- Epiphany (6 January)
- Good Friday (varies)
- Easter Monday (varies)
- Ascension Day (varies)
- Whit Monday (varies)
- Liechtenstein National Day (15 August)
- Christmas Day (25 December)
- St. Stephen’s Day (26 December)
In total, there are around 15 public holidays.
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Working Hours:
The standard working week in Liechtenstein is 40 to 42 hours, typically from Monday to Friday. The working hours are usually regulated by individual employment contracts or collective agreements. Overtime is generally compensated either with time off or with additional pay.
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Vacation:
Employees in Liechtenstein are entitled to a minimum of 20 days of paid annual leave per year for those over 20 years of age. Employees younger than 20 years old are entitled to 25 days of leave. Employers may offer additional vacation days based on seniority or company policy.
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Sick Leave:
In the case of illness:
- Sick Pay: Employers are required to continue paying employees during illness, with the duration depending on the length of service and employment contracts. Typically, sick pay is covered for up to 3 months.
- Health Insurance: After a certain period, health insurance may cover a portion of the sick pay if the illness is prolonged.
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Termination/Severance:
Termination and severance are regulated under employment law in Liechtenstein:
- Notice Period: The notice period varies based on the duration of employment:
- Less than 1 year: 1 month’s notice.
- 1 to 9 years: 2 months’ notice.
- Over 9 years: 3 months’ notice.
- Severance Pay: There is no statutory severance pay in Liechtenstein, but it may be included in individual employment contracts or collective agreements.
- Unfair Dismissal: Employees can challenge unfair dismissal in court, and compensation may be awarded if the dismissal is found to be unlawful.
Liechtenstein is a small but economically prosperous country with a high standard of living, a well-developed social security system, and competitive wages. The strong financial sector and industrial base, combined with the country’s strategic location between Switzerland and Austria, make it an attractive place for businesses and workers alike.