Liechtensteins Blockchain Act vs. Maltas DLT Framework: The Ultimate Comparison for German Crypto Entrepreneurs

Last week, I got a call from Thomas. A successful German blockchain entrepreneur. His question was simple: Richard, where can I set up my crypto business legally and in a tax-optimized way?

And heres where it gets interesting:

Most German entrepreneurs immediately think of Malta or Switzerland. But they overlook a tiny principality that has quietly created the worlds most advanced blockchain regulations.

Im talking about Liechtenstein.

While Germany is still debating crypto regulations, Liechtenstein and Malta already have functioning legal frameworks. But which location truly fits your business model?

As someone who has been supporting German entrepreneurs in their international positioning for years, today Ill show you the key differences. Not theoretically—but with concrete numbers and real-world experience.

Ready for a journey into the world of specialized blockchain regulation?

Yours, RMS

Why German Entrepreneurs Should Consider Liechtenstein and Malta

German Crypto Regulation: Between BaFin Requirements and Legal Uncertainty

Let me be honest with you:

Germany is no blockchain paradise. BaFin (Federal Financial Supervisory Authority) treats crypto companies like traditional banks. This means high capital requirements, complex licensing processes, and often years of waiting time.

A concrete example: To get a crypto custody license in Germany, you need at least €125,000 in equity. Application fees are another €15,000 to €50,000. The process takes on average 12 to 18 months.

But thats not all.

German crypto businesses struggle with another problem: taxation. Cryptocurrencies are classified as other economic assets. This leads to complex valuation questions and high compliance costs.

Many of my clients report annual tax advisory expenses between €50,000 and €150,000—just to correctly process their crypto activities.

Microstates as Blockchain Pioneers: The Agility Advantage

This is where Liechtenstein and Malta come into play.

Both countries recognized that blockchain technology needs modern laws—not outdated financial regulation. Thats why theyve developed specialized legal frameworks.

The crucial advantage of small states is their agility. While German authorities need years to amend laws, Liechtenstein and Malta can adapt quickly to market developments.

A real-world example:

When NFTs (Non-Fungible Tokens) exploded in 2021, Liechtenstein had already provided legal clarity by March. Germany is still debating the tax treatment today.

On top of that, both locations offer a critical benefit: international recognition. A blockchain license from Liechtenstein or Malta opens doors to global markets that German companies often cant access.

Liechtensteins Blockchain Act: The Worlds First Comprehensive Blockchain Law

What Makes the TVTG (Token and TT Service Provider Act) So Special?

Liechtenstein made blockchain history in 2020. The TVTG (Token and TT Service Provider Act) is the worlds first comprehensive blockchain law.

But what does that mean for you in practice?

The TVTG distinguishes between ten different types of token-related services—from simple token issuance to complex portfolio management. This differentiation enables tailor-made regulation instead of one-size-fits-all solutions.

Whats truly innovative: The law regulates not the technology, but the services. That means legal certainty for today, and flexibility for tomorrow.

A practical example:

• Token issuance possible without a license (under certain conditions)
• Custody services require minimum capital of 50,000 CHF
• Portfolio management from 100,000 CHF
• Crypto exchanges from 200,000 CHF

These tiered requirements allow even smaller companies to operate legally and safely.

Practical Advantages for German Entrepreneurs

Why are more and more German entrepreneurs choosing Liechtenstein?

First: Legal certainty. TVTG provides clear definitions and transparent processes—no grey areas, no room for interpretation.

Second: EEA access. Liechtenstein is part of the European Economic Area. That means EU passport rights without EU membership. Your Liechtenstein license is recognized in all EU countries.

Third: Proximity to Germany. Liechtenstein is just three hours from Munich. Business meetings, dealings with authorities, and bank visits are all easily managed.

Fourth: The tax system. Liechtenstein taxes corporate profits at 12.5%. There are further discounts for international holding structures.

Heres a practical calculation:

Costs and Efforts of Blockchain Licensing in Liechtenstein

Let the numbers speak:

Licensing costs in Liechtenstein depend on the service. For a basic token service provider license, expect:

• Application fee: 5,000 CHF
• Minimum capital: 50,000 CHF (depending on service)
• Legal fees: 15,000–25,000 CHF
• Ongoing compliance: 30,000–50,000 CHF annually

At first glance, this may seem expensive. But compare it to Germany: youll often pay twice as much for much longer waiting times and more complex requirements.

Plus, Liechtenstein offers a decisive advantage: predictability. The authorities communicate transparently about requirements and timelines. No nasty surprises, no hidden costs.

Practical tip: Start with the simplest license and expand step by step. TVTG allows modular licensing—you only pay for the services you actually offer.

Maltas DLT Framework: EU Pioneer with Strategic Advantages

The Three Pillars of Maltas Blockchain Regulation

Malta has taken a different path than Liechtenstein. Instead of a single comprehensive law, the island nation relies on three specialized acts:

The Malta Digital Innovation Authority Act (MDIA) establishes the regulator. The Innovative Technology Arrangements and Services Act (ITAS) governs DLT services. The Virtual Financial Assets Act (VFA) covers crypto assets.

This three-part system may sound complicated, but it has a clear advantage: flexibility.

Malta can adjust each law independently, without overhauling the entire system. That means rapid responses to market changes.

A real-world example:

When DeFi (Decentralized Finance) exploded in 2020, Malta was able to quickly adapt the ITAS. New DeFi protocols gained legal clarity within months.

The MDIA (Malta Digital Innovation Authority) acts as a single point of contact. It not only reviews licenses but also provides regulatory advice—saving you time and money.

VFA License vs. DLT License: What German Entrepreneurs Should Know

Malta distinguishes between two main license types:

The VFA (Virtual Financial Assets) License covers traditional crypto services such as trading, custody, or consulting. The DLT (Distributed Ledger Technology) License is for innovative blockchain applications.

This distinction is critical for your strategy.

VFA licenses are ideal for established business models:

• Crypto exchanges and trading platforms
• Custody services for institutional clients
• Portfolio management and consulting
• ICO/STO services

DLT licenses are the right route for innovative projects:

• DeFi protocols and smart contracts
• NFT marketplaces and gaming platforms
• Supply chain and identity solutions
• Experimental blockchain applications

Costs vary widely. A VFA Class 2 License (for custody services) costs around €25,000. A full VFA Class 4 License (for exchanges) can cost up to €50,000.

DLT licenses are less standardized and generally cheaper. The cost depends on your projects complexity.

Tax Specifics and EU Passport Advantages

Malta offers German entrepreneurs an unbeatable advantage: EU membership without blockchain phobia.

Maltas tax system is based on a credit method. Companies pay 35% corporate tax up front, but with shareholder refunds the effective burden drops to 5–10%.

Heres a calculation:

On top of that, you benefit from EU passporting. Your Maltese license is automatically recognized in all 27 EU countries. That gives you access to a market of 450 million potential customers.

Especially valuable: Malta has double taxation agreements with over 70 countries—enabling tax-efficient international structures.

Practical tip: Combine Maltese operations with a German holding. That way, you leverage both EU benefits and German double taxation agreements.

Direct Comparison: Liechtenstein vs. Malta for German Crypto Entrepreneurs

Licensing Costs and Time Requirements in Detail

Now lets get specific. Let’s compare the hard facts:

The numbers send a clear message: Liechtenstein is cheaper and faster. Malta, on the other hand, offers better EU access.

But beware superficial comparisons—the real costs surface during ongoing operations.

Expect annual compliance costs in Liechtenstein of 30,000–50,000 CHF. Malta is more expensive: €50,000–80,000 a year. However, Malta provides more comprehensive regulatory support.

Tax Considerations: Where Do You Really Save?

Now it gets interesting for your bottom line:

Liechtenstein taxes corporate profits at a flat 12.5%. Simple, transparent, predictable. Holding companies can get discounted rates down to 2.5%.

Malta is more complex but potentially cheaper. Using the credit system, effective rates drop to 5–10%. But this requires careful planning.

Here’s a practical comparison for €500,000 annual profit:

• Liechtenstein: €62,500 tax (12.5%)
• Malta (optimized): €25,000 tax (5%)
• Germany: €150,000 tax (30%)

So Malta saves you €37,500 a year compared to Liechtenstein—and the difference grows with higher profits.

But be aware of side effects:

Malta’s tax system requires more complex structures and higher advisory costs. Liechtenstein is easier to manage, especially for smaller businesses.

Business Model Fit: Which Location Is Right for You?

The key question is not Where do I save the most? but Which location best fits my business model?

Choose Liechtenstein if you:

• Value legal certainty above all
• Have an established business model (trading, custody, consulting)
• Appreciate proximity to Germany
• Prefer simple, transparent tax planning
• Need fast licensing

Choose Malta if you:

• Are aiming for maximum tax optimization
• Offer innovative, not-yet-regulated services
• Have a strong EU market focus
• Plan complex international structures
• Appreciate regulatory flexibility

A concrete example from my consulting practice:

Sarah operates a crypto trading platform for German retail clients. For her, Liechtenstein was the right choice: fast licensing, legal certainty, straightforward tax planning.

Michael develops DeFi protocols for the global market. He chose Malta: innovative regulation, EU passport, optimal tax structures for international expansion.

Both chose correctly—for their individual business models.

Practical Experience: What German Entrepreneurs Can Really Expect

Case Study: FinTech Startup Chooses Liechtenstein

Let me tell you the story of TechCrypto (name changed). A German FinTech start-up I advised on location choice in 2023.

The situation: TechCrypto develops a B2B platform for crypto payments. The German market is the primary target, but international expansion is planned.

They decided on Liechtenstein. Why?

First: The timeline. TechCrypto needed legal clarity fast for investor talks. In Liechtenstein, they got provisional approval in four months.

Second: The costs. With 180,000 CHF in starting capital and 12,000 CHF in application fees, they were far below German requirements.

Third: Proximity. Monthly on-site meetings in Vaduz are easily arranged. This was crucial for building relationships with authorities and banks.

The result after one year of operation:

• Successful Series A funding of €5 million
• Tax burden only 12.5% instead of 30% in Germany
• Expansion into three more EU countries using EEA passporting
• Estimated cost saving: €250,000 in the first year

The founder sums it up: Choosing Liechtenstein was the best decision. We saved time, money, and nerves.

Common Pitfalls and How to Avoid Them

I know the typical mistakes from my consulting practice. Here are the most important to watch out for:

Pitfall 1: Underestimating Substance Requirements

Both Liechtenstein and Malta demand real economic substance: local offices, local employees, local decision-makers.

The solution: Plan for real presence from day one. A virtual office is not enough. Budget €50,000–100,000 annually for adequate substance.

Pitfall 2: Choosing the Wrong License

Many entrepreneurs apply for licences that are too wide. That costs unnecessary time and money.

The solution: Start with the minimum license for your current business model. Expand step by step.

Pitfall 3: Underestimating Ongoing Compliance

Licensing is just the beginning. Ongoing compliance costs are often overlooked.

The solution: Budget €30,000–80,000 annually for compliance. Thats cheap compared to fines or revocation.

Pitfall 4: Poor Tax Planning

Especially in Malta, the tax advantages are often not fully exploited.

The solution: Invest in quality tax advice. The consulting pays for itself quickly through tax savings.

Practical tip: Start with a proof of concept. Incorporate a simple company first to test the location. You can build more complex structures later.

My Recommendation: How to Make the Right Decision

After everything weve discussed, youre probably wondering: So which location is the right one for me?

Heres my honest assessment:

Theres no universal solution. But there is a decision matrix I use with my clients.

Choose Liechtenstein if at least three of the following points apply to you:

• You need legal certainty quickly (under 6 months)
• Your main market is Germany or the DACH region
• You prefer simple, transparent structures
• Your business model is established (trading, custody, consulting)
• You value predictability over maximum optimization

Choose Malta if at least three of the following apply to you:

• Maximum tax optimization is your priority
• Your focus is EU-wide expansion
• You offer innovative, not-yet-regulated services
• You’re experienced with complex international setups
• You can invest €50,000+ a year in compliance

A personal tip: Don’t let tax savings alone guide your decision. The best structure is the one that lets you sleep soundly at night.

If you’re not sure, I recommend a phased approach:

1. Phase 1: Set up a simple company at your preferred location
2. Phase 2: Test business operations for 12 months
3. Phase 3: Optimize the structure based on your experience

This approach takes a bit more time, but avoids costly mistakes.

One last important point: Both locations are evolving continuously. Whats optimal today may be outdated tomorrow. Stay flexible and review your setup regularly.

You have specific questions about your situation? Then let’s talk. As your tax mentor, I’d be happy to guide you through the decision process.

One things for sure: The right international setup can take your business to the next level.

Yours, RMS

Frequently Asked Questions (FAQ)

Can I, as a German citizen, easily obtain a blockchain license in Liechtenstein or Malta?

Yes, both countries are open to German entrepreneurs. Liechtenstein as an EEA member and Malta as an EU state have no restrictions for German applicants. What matters is economic substance on site, not your nationality.

What are the minimum capital requirements for a blockchain license?

In Liechtenstein, requirements depend on the service: 50,000 CHF for custody, 100,000 CHF for portfolio management, 200,000 CHF for exchanges. In Malta, it’s €125,000 to €730,000 depending on the license type. Both locations are cheaper than Germany.

How long does the licensing process take in reality?

Liechtenstein: 3–6 months with complete documentation. Malta: 6–12 months, depending on license type. German procedures often take 12–18 months. The shorter times in Liechtenstein and Malta are a major competitive advantage.

What ongoing compliance costs should I expect?

Liechtenstein: 30,000–50,000 CHF per year for compliance, reporting, and local presence. Malta: €50,000–80,000 per year. These ongoing costs are often more decisive when choosing a location than the one-time licensing fees.

Can I operate across the EU with a Liechtenstein or Malta license?

Yes, both offer EU-wide passport rights. Liechtenstein via EEA membership, Malta as a full member. That means cross-border services without additional licenses in other EU countries.

What are the concrete tax benefits at each location?

Liechtenstein: Flat 12.5% corporate tax, for holdings as low as 2.5%. Malta: Effective rates of 5–10% through the refund system. Both are much lower than the 30% overall tax in Germany. Malta has more optimization potential; Liechtenstein offers more simplicity.

Do I have to move my residence to Liechtenstein or Malta?

No, you dont have to relocate. What matters is economic substance: local offices, employees, and decision-making structures. Many German entrepreneurs keep their German residence and manage the company on-site.

How do the two locations compare for innovative blockchain applications such as DeFi or NFTs?

Malta is more flexible for experimental technologies thanks to its modular DLT framework. Liechtenstein provides more legal certainty via the comprehensive TVTG. For established services, Liechtenstein is often the better choice; for innovation, choose Malta.

Which banks work with blockchain companies in Liechtenstein and Malta?

Liechtenstein: Bank Frick, LLB, VP Bank have crypto expertise. Malta: Numerous local and international banks, but with stricter due diligence. Opening an account is possible in both, but requires careful preparation.

What happens if regulation in Germany becomes more restrictive?

Your Liechtenstein or Maltese license remains valid. Thanks to EEA/EU passporting, you can continue to serve German clients. This is important protection against regulatory risk in your home market.