Entrepreneurs conducting business activities are obligated to exercise due diligence in selecting a contractor when conducting commercial transactions. Legal regulations require this, as well as a sense of responsibility for the fate of the managed company. Establishing cooperation with an unreliable entity can result not only in exposing the company to losses caused by an unprofitable contract but also in facing sanctions envisaged due to restrictions and bans imposed in the area of trade with specific goods and services by Poland and the international community, against selected individuals and entities connected to the Russian armed aggression in Ukraine. Below is a guide on how to check a company from Liechtenstein.
Exercising due diligence in contractor verification
In today’s times, setting up a company is very easy. In many countries, this can be done without even leaving the house, through the Internet. Therefore, one can never be certain who is truly behind the created name and entry in the register until it is verified. Verification involves actions commonly used in economic intelligence, primarily consisting of verifying the reliability and currency of the contractor’s documentation, including the National Court Register (KRS), Tax Identification Number (NIP), Statistical Identification Number (REGON), as well as the permits and certificates necessary for conducting a specific type of activity. Verification can be carried out by obtaining information from appropriate individuals and institutions such as registration courts, the Social Insurance Institution (ZUS), tax authorities, national and international chambers of commerce. It’s worth delving into knowledge about the history of the activity and its owners, including opinions about the company, by searching the Internet or asking other entrepreneurs, contractors of this entity, and the interested party directly. It must be remembered that failure to exercise due diligence in selecting a contractor entails legal consequences, such as being accused of knowingly participating in irregularities, leading to further tax and legal sanctions.
Economic cooperation with Liechtenstein
Liechtenstein is one of the smallest countries in Europe. Liechtenstein’s economy is characterized by a small domestic market and a clear dependence on exports. Since Poland’s accession to the EU on May 1, 2004, economic cooperation with Liechtenstein has been based on the Agreement on the European Economic Area (EEA), of which Liechtenstein is a member. Liechtenstein’s economy is fully integrated into the Swiss economic, legal, and monetary system. Liechtenstein has adopted most of Switzerland’s bilateral economic agreements with the EU, including membership in the Schengen area. Following Poland’s accession to the EEA, the principle of mutual treatment of economic entities has been activated. This means the possibility of establishing branches of Polish companies in Liechtenstein without separate approval from the state administration and entering them into the company register as is the case with other EU and EEA countries.
The largest share of Polish exports to Liechtenstein is furniture – about 27%, motorcycles and scooters – about 11.3%, articles of plastics – about 10.1%, parts and accessories for cars – about 7%, parts for lifting and transport machinery – about 5.6%, articles of cast iron and steel – about 5.2%, spare parts for tools and machines – about 3.3%, bars, rods, and sections of aluminum – about 9.5%. The largest share of Polish imports from Liechtenstein consists of iron and steel products – about 32%, animal feed, mainly food for dogs and cats – 21.4%, surgical catgut, dental and surgical cement – 12.2%, central heating boilers – 10.5%, machinery and mechanical and electrical equipment – about 5%, electrical apparatus – about 4.5%, binding agents for foundry molds – 3.1%, instruments for measuring flow, level, pressure of liquids and gases – 1.7%. Liechtenstein’s investment in Poland amounted to EUR 87.8 million in 2019. About EUR 7 million flowed in 2018. In Poland, 126 entities with Liechtenstein capital have been registered. Liechtenstein has been a member of the Schengen Agreement since 2011.
National and EU Sanctions
For over a year, Polish companies have been scrutinizing cooperation with foreign business partners even more cautiously. In connection with the outbreak of the war in Ukraine, the European Union imposed 11 sets of sanctions on Russia on June 23, 2023. Poland also imposes its additional sanctions. These include key individuals in Russia, as well as companies from both that country and Belarus. Trade in goods and services with Russian and Belarusian companies is prohibited. Polish entrepreneurs who violate this may face financial penalties of up to PLN 20 million and even up to 15 years of imprisonment. However, Russian and Belarusian entrepreneurs have learned to bypass international bans, using, among other things, complex holding structures established in other countries, where the real ownership structure is difficult to detect.
Detailed information about the types of transactions with Belarus and Russia subject to EU sanctions can be found on the European Council’s website: https://www.consilium.europa.eu/. In the Official Journal of the EU, at the address: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02014R0269-20220721, there is a list of individuals and entities subject to sanctions. The Polish Ministry of Internal Affairs and Administration also maintains an up-to-date registry of entities subject to sanctions, where you can verify a contractor, their affiliations, reasons for listing, and applied sanctions: https://www.gov.pl/web/mswia/lista-osob-i-podmiotow-objetych-sankcjami.
Economic Intelligence: How to Verify a Contractor from Liechtenstein?
Verification of a contractor can be entrusted to a professional economic intelligence agency that specializes in carrying out such orders. A private investigator in Warsaw, Poznan, Wroclaw, or other cities will know how to obtain the necessary information to verify the current or future contractor.
The most important way to verify a contractor and their potential connections to Belarus or Russia is to determine the actual beneficiary entity and then check if they are on the above-mentioned sanctions list maintained by the Ministry of Internal Affairs and Administration. This can be done using the Central Register of Ultimate Beneficial Owners maintained by the Ministry of Finance: https://crbr.podatki.gov.pl/adcrbr/#/wyszukaj.
Environmental Intelligence
A publicly available way to gather information about a contractor is to search online resources. Verifying a company, checking if it has a website, what opinions exist about it, and perhaps coming across some publications about it can provide useful information. If, for certainty, we do not wish to do this ourselves, we can entrust this task to a research agency specialized in professional economic intelligence. Because there are many more sources of information than just the World Wide Web. For example, you can contact the Polish Embassy in Bern with inquiries about a specific entity, whether any complaints from other entrepreneurs have been received, or whether, according to the diplomatic mission’s knowledge, the contractor from Liechtenstein has a negative reputation. Similar information can be provided by Polish-Liechtenstein chambers of commerce.
Direct Inquiry to the Contractor
In case there are difficulties in determining the ownership structure of a business partner through available registers, another method of checking them within the framework of economic intelligence is to directly request confirmation from them about who their actual beneficiary is. Of course, to validate the given response, you can ask the Liechtenstein entrepreneur to provide documents confirming their declarations.
Polish and EU Registers
In the Public Information Bulletin, the Ministry of Entrepreneurship and Technology, as the minister responsible for the economy, maintains a register of representatives of foreign entrepreneurs. If we find the representation of our contractor in this register, we can assume that they are still in existence and conducting activities.
Another such register in which you can verify a contractor is the European Union VAT taxpayer register and the EORI register. Companies and individuals wishing to engage in commercial activities within the Union must use the EORI number as an identification number in all customs procedures. The VIES (VAT Information Exchange System) is a search engine operated by the European Commission that allows checking whether a given entity is registered as conducting intra-Community transactions. This is necessary, among other things, to apply a 0% VAT rate to a particular transaction. If VIES does not confirm the registration of the contractor, a verification request can be submitted to the tax authority of the country where they are based. It is also worth checking whether the company has the required permits and certificates if they are required in a given country.
The Register of Insolvent Debtors allows checking whether a given contractor is on its list. There are also economic information bureaus that have detailed information about companies’ activities. BIK, the Credit Information Bureau established by the Polish Bank Association, gathers data on the credit history of bank customers, credit unions, and non-bank payday loan companies as well.
Searching for Companies in Liechtenstein’s Registers
The Handelsregister is the official public register of business activities. It is maintained by the Department of Justice (Amt für Justiz) in Vaduz. It contains information about all registered legal entities based in the Principality of Liechtenstein, as well as Liechtenstein trusts (Treuhänderschaften). The information pertains to facts or relationships, some of which are required by law to be entered in the register, while others are reported voluntarily along with relevant documents attesting to these circumstances. Access to the register is subject to a fee. Although some information about any entity and other legal information can be found free of charge in the index of the business activity register (Firmenindex) through the link http://www.oera.li/hrweb/ger/firmensuche_afj.htm. The results are limited, providing only the address, date of establishment, and reference numbers to official records. Clicking on three small dots at the bottom offers the possibility to browse historical information. The database can be searched by number or company name: https://www.oera.li/cr-portal/suche/suche.xhtml.
Teledata enables searches based on company or individual names in databases from Switzerland and Liechtenstein. Additionally, the website provides detailed information from financial institutions, official registers, and other departments of public administration, including links to politicians, detailed financial status and reports, birth dates, and addresses: https://www.teledata.ch/td-web/login.
InfoClipper – a commercial portal offering in-depth information about entrepreneurs. It reduces trade and financial risks, allows for monitoring and comparing market competitors in Liechtenstein: https://www.info-clipper.com/en/company/search/liechtenstein.li.html.
It’s Better to Thoroughly Verify the Contractor
Before entering into transactions or collaborations with a contractor from Liechtenstein, it’s better to conduct economic intelligence and thoroughly verify them, especially to ensure they are not linked to Belarus or Russia. Violating the prohibitions imposed on certain types of transactions with these countries, specific individuals, and companies may result in financial penalties of up to PLN 20 million and imprisonment ranging from 3 to 15 years. Furthermore, verifying the contractor and exercising due diligence in their selection is a requirement that always applies to conducting business activities, obligating entrepreneurs as professional market participants.
Do you already know how to verify a company from Liechtenstein? If not, or if you need to find more detailed information, we can assist you. Contact us.
