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The Principality of Liechtenstein ( , , Principality of Liechtenstein) is a doubly landlocked alpine microstate in Western Europe, bordered by Switzerlandmarker to the west and south and by Austriamarker to the east. Its area is just over 160 km² (about 61.7 square miles) and it has an estimated population of 35,000. Its capital is Vaduzmarker, the biggest town is Schaanmarker.

Liechtenstein is the smallest German-speaking country in the world, and the only alpine country to lie entirely within the Alps. It is also the only German-speaking country not to share a common frontier with Germany. It is a constitutional monarchy divided into 11 municipalities. Much of Liechtenstein's terrain is mountainous, making it a winter sports destination. Many cultivated fields and small farms characterize its landscape both in the north (Unterland, lower land) and in the south (Oberland, upper land). The country has a strong financial sector located in the capital, Vaduz, and has been identified as a tax haven. It is a member of the European Free Trade Association. Liechtenstein is not part of the European Union.


At one time, the territory was part of the ancient Roman province of Raetia. For centuries this territory, geographically removed from European strategic interests, had little impact on European history. Prior to the reign of its current dynasty, the region was enfeoffed to a line of the counts of Hohenemsmarker.

The Liechtenstein dynasty, from which the principality takes its name, comes from Castle Liechtensteinmarker in Lower Austria, which the family possessed from at least 1140 until the 13th century, and from 1807 onward. Through the centuries, the dynasty acquired vast tracts of land, predominantly in Moravia, Lower Austriamarker, Silesia, and Styria, though these territories were all held in fief under other more senior feudal lords, particularly under various lines of the Habsburg family, whom several Liechtenstein princes served as close advisers. Thus, without any territory held directly under the Imperial throne, the Liechtenstein dynasty was unable to meet a primary requirement to qualify for a seat in the Imperial diet, the Reichstag.

The family yearned for the added power a seat in the Imperial government would bring, and therefore sought to acquire lands that would be unmittelbar, or held without any feudal personage other than the Holy Roman Emperor himself having rights on the land. After some time, the family was able to arrange the purchase of the minuscule Herrschaft ("Lordship") of Schellenbergmarker and county of Vaduzmarker (in 1699 and 1712 respectively) from the Hohenems. Tiny Schellenberg and Vaduz had exactly the political status required: no feudal lord other than their comital sovereign and the suzerain Emperor.

On 23 January 1719, after the lands had been purchased, Charles VI, Holy Roman Emperor, decreed that Vaduz and Schellenberg were united, and elevated the newly-formed territory to the dignity of Fürstentum (principality) with the name "Liechtenstein" in honour of "[his] true servant, Anton Florian of Liechtenstein". It was on this date that Liechtenstein became a sovereign member state of the Holy Roman Empire. It is a testament to the pure political expediency of the purchases that the Princes of Liechtenstein did not set foot in their new principality for over 120 years.

As a result of the Napoleonic Wars, by 1806 the Holy Roman Empire was under the control of French emperor Napoleon I. Napoleon dissolved the Empire and this had broad consequences for Liechtenstein: imperial, legal and political mechanisms broke down. The state ceased to owe obligations to any feudal lord beyond its borders. Modern publications generally (although incorrectly) attribute Liechtenstein's sovereignty to these events. In reality, its prince merely became suzerain, as well as remaining sovereign lord. From 25 July 1806 when the Confederation of the Rhinemarker was founded, the Prince of Liechtenstein was a member, in fact a vassal of its hegemon, styled protector, French Emperor Napoleon I, until the dissolution of the Confederation on 19 October 1813.

Soon afterward, Liechtenstein joined the German Confederationmarker (20 June 1815 24 August 1866) which was presided over by the Emperor of Austria.

Then, in 1818, Johann I granted the territory a limited constitution. 1818 also saw the first visit of a member of the house of Liechtenstein, Prince Alois; however, the first visit by a sovereign prince would not occur until 1842.

Developments during the 19th century included:
  • In 1836, the first factory was opened, making ceramics.
  • In 1861, the Savings and Loans Bank was founded, as was the first cotton-weaving mill.
  • Two bridges over the Rhine were built in 1868, and in 1872 a railway line across Liechtenstein was constructed.

Until the end of World War I, Liechtenstein was closely tied first to the Austrian Empiremarker and later to Austria-Hungary; the ruling princes continued to derive much of their wealth from estates in the Habsburg territories, and they spent much of their time at their two palaces in Vienna. The economic devastation caused by this war forced the country to conclude a customs and monetary union with its other neighbour, Switzerlandmarker. Liechtenstein's army was disbanded in 1868 for financial reasons. At the time of the dissolution of the Austro-Hungarian Empire, it was argued that Liechtenstein, as a fief of the Holy Roman Empire, was no longer bound to the emerging independent state of Austriamarker, since the latter did not consider itself as the legal successor to the Empire. This is partly contradicted by the coeval Liechtenstein perception that the dethroned Austro-Hungarian Emperor still maintained an abstract heritage of the Holy Roman Empire.

In early 1938, just after the annexation of Austria into Greater Nazi Germany, 84 year old Prince Franz I abdicated, naming his 31 year old third cousin, Prince Franz Joseph, as his successor. While Prince Franz I claimed that old age was his reason for abdicating, it is believed that he had no desire to be on the throne if Germany were to gobble up Liechtenstein. His wife, whom he had married in 1929, was a wealthy Jewish woman from Vienna, and local Liechtenstein Nazis had already identified her as their Jewish "problem". Although Liechtenstein had no official Nazi party, a Nazi sympathy movement had been simmering for years within its National Union party.

During World War II, Liechtenstein remained officially neutral, looking to neighboring Switzerland for assistance and guidance, while family treasures within the war zone were taken to Liechtenstein (and Londonmarker) for safekeeping. At the close of the conflict, Czechoslovakiamarker and Polandmarker, acting to seize what they considered to be German possessions, expropriated the entirety of the Liechtenstein dynasty's hereditary lands and possessions in Bohemia, Moravia, and Silesia — the princes of Liechtenstein lived in Viennamarker until the Anschluss of 1938. The expropriations (subject to modern legal dispute at the World Court) included over of agricultural and forest land, and several family castles and palaces. Citizens of Liechtenstein were also forbidden to enter Czechoslovakia during the Cold War. More recently the diplomatic conflict revolving around the controversial post-war Beneš decrees has resulted in Liechtenstein not sharing international relations with the Czech Republic or Slovakia. The issue with Slovakia is yet to be resolved, however, Liechtenstein and the Czech Republic established diplomatic relations on 13 July 2009.. Liechtenstein gave asylum to about 500 soldiers of the First Russian National Army (a collaborationist Russian force within the German Wehrmacht) at the close of World War II; this is commemorated by a monumentmarker at the border town of Hinterschellenbergmarker which is marked on the country's tourist map. The act of granting asylum was no small matter as the country was poor and had difficulty feeding and caring for such a large group of refugees. Eventually, Argentina agreed to resettle the asylum seekers permanently. In contrast, the British repatriated the Russians who had fought for Germany to the USSR, and many of them perished in the Gulag.

In dire financial straits following the war, the Liechtenstein dynasty often resorted to selling family artistic treasures, including the priceless portrait "Ginevra de' Benci" by Leonardo da Vinci, which was purchased by the National Gallery of Artmarker of the United Statesmarker in 1967. Liechtenstein prospered, however, during the decades following, as it used its low corporate tax rates to draw many companies to the country.

The Prince of Liechtenstein is the world's sixth wealthiest leader with an estimated wealth of USD $5 billion. The country's population enjoys one of the world's highest standards of living.

Government functions

The Government building in Vaduz.

Liechtenstein's current constitution was adopted in March 2003, replacing the previous 1921 constitution which had established Liechtenstein as a constitutional monarchy headed by the reigning prince of the Princely House of Liechtenstein. A parliamentary system had been established, although the reigning prince retained substantial political authority.

The reigning prince is the head of state and represents Liechtenstein in its international relations (although Switzerland has taken responsibility for much of Liechtenstein's diplomatic relations). The prince may veto laws adopted by parliament. The prince can call referendums, propose new legislation, and dissolve parliament, although dissolution of parliament may be subject to a referendum.

Executive authority is vested in a collegiate government comprising the head of government (prime minister) and four government councilors (ministers). The head of government and the other ministers are appointed by the prince upon the proposal and concurrence of parliament, thus reflecting the partisan balance of parliament. The constitution stipulates that at least two members of the government be chosen from each of the two regions. The members of the government are collectively and individually responsible to parliament; parliament may ask the prince to remove an individual minister or the entire government.

Legislative authority is vested in the unicameral "Landtag" (Liechtenstein Parliament) made up of 25 members elected for maximum four-year terms according to a proportional representation formula. Fifteen members are elected from the "Oberland" (Upper Country or region) and ten members are elected from the "Unterland" (Lower Country or region). Parties must receive at least 8% of the national vote to win seats in parliament. Parliament proposes and approves a government, which is formally appointed by the prince. Parliament may also pass votes of no confidence in the entire government or individual members. Additionally, parliament elects from among its members a "Landesausschuss" (National Committee) made up of the president of the parliament and four additional members. The National Committee is charged with performing parliamentary oversight functions. Parliament can call for referendums on proposed legislation. Parliament shares the authority to propose new legislation with the prince and with the requisite number of citizens required for an initiative referendum.

Judicial authority is vested in the Regional Court at Vaduz, the Princely High Court of Appeal at Vaduz, the Princely Supreme Court, the Administrative Court, and the State Court. The State Court rules on the conformity of laws with the constitution. The State Court has five members elected by parliament.

New constitution

In a national referendum in March 2003, nearly two-thirds of the electorate voted in support of Hans-Adam II's proposed new constitution to replace the 1921 one. The proposed constitution was criticised by many, including the Council of Europe, as expanding the powers of the monarchy (continuing the power to veto any law, and allowing the Prince to dismiss the Government or any Minister), and the criticisms were accentuated by a threat by the ruling prince that if the constitution failed, he would, among other things, convert some of the royal property for commercial use. However the royal family and the prince enjoy tremendous public support inside the nation and passing the resolution resulted in a landslide or majority electorate voting in favour.

Honorary Consuls

On 1 July 2007, the Liechtenstein Ruling Prince, H.S.H. Hans-Adam II, and Liechtenstein's Prime Minister, Otmar Hasler, appointed Dr. Bruce S. Allen and Leodis C. Matthews, both in the United States of Americamarker, as the first two Honorary Consuls in history for the Principality of Liechtensteinmarker. The U.S. does not maintain an embassy in Liechtenstein, and it is Switzerland's role to conduct and continue good relations between Switzerland, the U.S and the tiny principality.


Satellite image

Liechtenstein is situated in the Upper Rhinemarker valley of the European Alps and is bordered to the east by Austria and to the west by Switzerland. The entire western border of Liechtenstein is formed by the river Rhine. Measured north to south, the country is only about long. In the east, Liechtenstein rises to higher altitudes: its highest point, the Grauspitzmarker, is . Despite its Alpine location, prevailing southerly winds make the climate of Liechtenstein comparatively mild. In winter, the mountain slopes are well suited to winter sports.

New surveys using more accurate measurements of the country's borders in 2006 have set its area at , with borders of . Thus, Liechtenstein discovered in 2006 that its borders are longer than previously thought.

Liechtenstein is one of only two doubly landlocked countries in the world—being a landlocked country wholly surrounded by other landlocked countries (the other is Uzbekistanmarker). Liechtenstein is the sixth-smallest independent nation in the world by land area.

The principality of Liechtenstein is divided into 11 communes called Gemeinden (singular Gemeinde). The Gemeinden mostly consist only of a single town or village. Five of them (Eschenmarker, Gamprinmarker, Maurenmarker, Ruggellmarker, and Schellenbergmarker) fall within the electoral district Unterland (the lower county), and the remainder (Balzersmarker, Plankenmarker, Schaanmarker, Triesenmarker, Triesenbergmarker, and Vaduzmarker) within Oberland (the upper county).


Looking northward at Vaduz city-centre.

Despite or perhaps because of its limited natural resources, Liechtenstein is one of the few countries in the world with more registered companies than citizens; it has developed a prosperous, highly industrialized, free-enterprise economy, and boasts a financial service sector as well as a living standard which compares favorably with those of the urban areas of Liechtenstein's large European neighbours. Relatively low business taxes—the maximum tax rate is 20%—as well as easy Rules of Incorporation have induced about 73,700 holding (or so-called 'letter box') companies to establish registered offices in Liechtenstein. This provides about 30% of Liechtenstein's state revenue. Liechtenstein also generates revenue from Stiftungen ("foundations"), which are financial entities created to increase the privacy of nonresident foreigners' financial holdings. The foundation is registered in the name of a Liechtensteiner, often a lawyer.

Recently, Liechtenstein has shown strong determination to prosecute international money-launderers, and worked to promote the country's image as a legitimate finance center. In February 2008, the country's LGT Bank was implicated in a tax-fraud scandal in Germany, which strained the ruling family's relationship with the German government. Crown Prince Alois has accused the German government of trafficking in stolen goods. This refers to its $7.3 million purchase of private banking information illegally offered by a former employee of LGT Group. However, the US Senate's subcommittee on tax haven banks said that the LGT bank, which is owned by the royal family, and on whose board they serve, "is a willing partner, and an aider and abettor to clients trying to evade taxes, dodge creditors or defy court orders."

Liechtenstein participates in a customs union with Switzerlandmarker and employs the Swiss franc as national currency. The country imports more than 90% of its energy requirements. Liechtenstein has been a member of the European Economic Area (an organization serving as a bridge between the European Free Trade Association (EFTA) and the European Union) since May 1995. The government is working to harmonize its economic policies with those of an integrated Europe. Since 2002, Liechtenstein's rate of unemployment has doubled, although it stood at only 2.2% in the third quarter of 2004. Currently, there is only one hospital in Liechtenstein, the Liechtensteinisches Landesspital in Vaduzmarker. The GDP (PPP) is $4.16 billion, or $118,000 per person.

Liechtenstein is a large producer of ceramics, and is the world's largest producer of sausage casings and false teeth. Other industries include electronics, textiles, precision instruments, metal manufacturing, power tools, anchors, calculators, pharmaceuticals, and food products. Liechtenstein also produces wheat, barley, corn, potatoes, dairy products, livestock, and wine. Tourism also accounts for a large portion of the country's economy.

Liechtenstein's most recognizable international company and largest employer is Hiltimarker, a manufacturer of direct fastening systems and other high-end power tools. Liechtenstein is also the home of the Curta calculator and the principality produces a large portion of the world's false teeth. (Ivoclar Vivadent, Schaanmarker)


The government of Liechtenstein taxes both personal and business income and principal (wealth). The basic rate of personal income tax is 1.2%. When combined with the additional income tax imposed by the communes, the combined income tax rate is 17.82%. An additional income tax of 4.3% is levied on all employees under the country's social security program. This rate is higher for the self-employed, up to a maximum of 11%, making the maximum income tax rate about 29% in total. Tax on income from employment is collected through monthly withholdings by the employer.

The maximum business income tax rate is 18-20%.

Estate duty
Amount (SFr) Rate
The first 200,000 1% The next 400,000 2% The next 600,000 3% The next 800,000 4% On residue over 2 million 5%

The basic tax rate on wealth is 0.06% per annum and the combined total rate is 0.89%.

Liechtenstein's gifts and estate taxes vary depending on the relationship the recipient has to the giver and the amount of the inheritance. The tax ranges between 0.5% and 0.75% for spouses and children and 18% to 27% for non-related recipients. The estate tax is progressive (see table opposite).

The rate above is halved if the estate passes to the spouse, children, or parents.

The 2008 Liechtenstein tax affair is a series of tax investigations in numerous countries whose governments suspect that some of their citizens may have evaded tax obligations by using banks and trusts in Liechtenstein; the affair broke open with the biggest complex of investigations ever initiated for tax evasion in the Federal Republic of Germanymarker. It was also seen as an attempt to put pressure on Liechtenstein, then one of the remaining uncooperative tax havens along with Andorramarker and Monacomarker as identified by the Paris-based Organisation for Economic Co-operation and Development in 2007. On 27 May 2009 the OECD removed Liechtenstein from the blacklist of uncooperative countries.

In August 2009, the British Government Department, HM Revenue & Customs, agreed with the Alpine tax haven to start exchanging information. It is believed that up to 5,000 British investors have roughly £3billion stashed in accounts and trusts in the country.


Liechtenstein is the fourth smallest country of Europe, after the Vatican Citymarker, Monacomarker, and San Marinomarker. Its population is primarily Alemannic-speaking ethnic Germans, although its resident population is approximately one third foreign-born, primarily German speakers from Germanymarker, Austriamarker, and Switzerlandmarker, other Swissmarker, Italians, and Turks. Foreign-born people make up two-thirds of the country's workforce. Nationals are referred to by the plural: Liechtensteiners.

The official language is German; most speak Alemannic, a dialect of German that is highly divergent from Standard German (see Middle High German), but closely related to those dialects spoken in neighbouring regions such as Vorarlberg, Austria. In Triesenbergmarker, a dialect promoted by the municipality is spoken. According to the 2000 census, 87.9% of the population is Christian, of whom 76% adhere to the Roman Catholic faith, while about 7% are Protestant. The religious affiliation of most of the remainder is Islam 4.8%, undeclared 4.1% and no religion 2.8%; around 30 Jews live in Liechtenstein today.

Liechtensteiners have an average life expectancy at birth of 79.68 years (76.1 for males; 83.28 for females). The infant mortality rate is 4.64 deaths per 1,000 live births, according to recent estimates. The literacy rate of Liechtenstein is 100%. The Programme for International Student Assessment, coordinated by the OECD, currently ranks Liechtenstein's education as the 10th best in the world, being significantly higher than the OECD average.



There are about of paved roadway within Liechtenstein.


 of railway connects Austria and Switzerland through Liechtenstein. The country's railways are administered by the Austrian Federal Railways as part of the route between Feldkirchmarker, Austriamarker, and Buchsmarker, Switzerlandmarker. Liechtenstein is nominally within the Austrian Verkehrsverbund Vorarlberg  tariff region.

There are four stations in Liechtenstein, namely Schaan-Vaduz, Forst Hilti, Nendeln, and Schaanwald, served by an irregularly-stopping train service that runs between Feldkirch and Buchs provided by the Austrian Federal Rail Service. While EuroCity and other long distance international trains also travel along the route, they do not normally stop at the stations within the borders of Liechtenstein.


Liechtenstein Bus is a subsidiary of the Swiss Postbus system, but separately run, and connects to the Swiss bus network at Buchsmarker and at Sargansmarker. Buses also run to the Austrian town of Feldkirch.


There are of marked bicycle paths in the country.


Liechtenstein has no airport; the nearest large airport is Zürichmarker. There is a small heliport at Balzersmarker in Liechtenstein available for charter helicopter flights.


As a result of its small size, Liechtenstein has been strongly affected by external cultural influences, most notably those originating in the southern German-speaking areas of Europe, including Austriamarker, Bavariamarker, Switzerlandmarker, and specifically Tirol and Vorarlberg. The Historical Society of the Principality of Liechtenstein plays a role in preserving the culture and history of the country.

The largest museum is the Kunstmuseum Liechtensteinmarker, an international museum of modern and contemporary art with an important international art collection. The building by the Swiss architects Morger, Degelo and Kerez is a landmark in Vaduz. It was completed in November 2000 and forms a "black box" of tinted concrete and black basalt stone. The museum collection is also the national art collection of Liechtenstein.

The other important museum is the Liechtenstein National Museum (Liechtensteinisches Landesmuseum) showing permanent exhibition on the cultural and natural history of Liechtenstein as well as special exhibitions. There are also two more museums: a Stamp museum and a Ski museum.

The most famous historical sites are Vaduz Castle, Gutenberg Castle, the Red House and the ruins of Schellenberg.

Music and theatre are an important part of the culture. There are numerous music organizations such as the Liechtenstein Musical Company, the annual Guitar Days and the International Josef Gabriel Rheinberger Society; and two main theatres.

The Private Art Collection of the Prince of Liechtenstein, one of the world's leading private art collections, is shown at the Liechtenstein Museummarker in Vienna.


Liechtenstein football teams play in the Swiss football leagues. The Liechtenstein Cup allows access for one Liechtenstein team each year to the UEFA Europa League; FC Vaduz, a team playing in the Swiss Axpo Super League, the first division in Swiss football, is the most successful team in the Cup, and scored their greatest success in the European Cup Winners' Cup in 1996 when they tied and defeated the Latvianmarker team FC Universitate Riga by 1–1 and 4–2, to go on to a lucrative fixture against Paris St Germain, which they lost 0–4 and 0–3.

The Liechtenstein national football team is regarded as an easy target for any team drawn against them; this was the basis for a book about Liechtenstein's unsuccessful qualifying campaign for the 2002 World Cup by British author, Charlie Connelly. In one surprising week during autumn 2004, however, the team managed a 2–2 draw with Portugal, who only a few months earlier had been the losing finalists in the European Championships. Four days later, the Liechtenstein team traveled to Luxembourg, where they defeated the home team 4-0 in a 2006 World Cup qualifying match. In the qualification stage of the European Championship 2008, Liechtenstein beat Latvia 1-0, a result which prompted the resignation of the Latvian coach. They went on to beat Iceland 3-0 on 17 October 2007, which is considered one of the most dramatic losses of the Icelandic national football team.

As an alpine country, the main sporting opportunity for Liechtensteiners to excel is in winter sports such as downhill skiing: the country's single ski area is Malbunmarker. Hanni Wenzel won two gold medals and one silver medal in the 1980 Winter Olympics (she won bronze in 1976), and her brother Andreas won one silver medal in 1980 and one bronze medal in 1984 in the Giant Slalom event. With nine medals overall (all in alpine skiing), Liechtenstein has won more Olympic medals per capita than any other nation. It is also the smallest nation to win a medal in any Olympics, Winter or Summer, and the only nation to win a medal in the Winter Games but not in the Summer Games. Other notable skiers from Liechtenstein are Marco Büchel, Willi Frommelt, Paul Frommelt and Ursula Konzett.

Amateur radio is a hobby of some nationals and visitors. However, unlike virtually every other sovereign nation, Liechtenstein does not have its own ITU Prefix. It uses Switzerland's callsign prefixes (typically "HB") followed by a zero.


Liechtenstein follows a policy of neutrality and is one of few countries in the world that maintains no military. The army was abolished soon after the Austro-Prussian Warmarker in which Liechtenstein fielded an army of 80 men, although they were not involved in any fighting. The demise of the German Confederationmarker in that war freed Liechtenstein from its international obligation to maintain an army, and parliament seized this opportunity and refused to provide funding for an army. The prince objected, as such a move would leave the country defenseless, but relented on 12 February 1868, and disbanded the force. The last soldier to serve under the colours of Liechtenstein died in 1939 at the age of 95. Order within the country is kept by a small police force.

See also


  1. Nazi Pressure? - TIME, 11 April 1938.
  3. D. Pendleton, C. Vorasasun, C. von Zeppelin, T. Serafin(1 September 2008). "The Top 15 Wealthiest Royals". Forbes Magazine.
  4. Portal of the Principality of Liechtenstein - News & Statements
  5. "Tiny Liechtenstein gets a little bigger", 29 December 2006.
  6. Liechtenstein redraws Europe map, BBC News, 28 December 2006.
  7. CIA World Factbook - Liechtenstein.
  9. Wiesmann, Gerrit. " Lilliput's giant-slayer." The Financial Times, 23 February 2008.
  10. A Parasite's Priorities, 22 February 2008.
  12. Encyclopedia of the Nations
  13. Liechtenstein Personal Taxation
  14. Removal from OECD List of Unco-operative Tax Havens
  15. British Broadcasting Corporation
  16. Publikationen zur Volkszählung 2000 - Amt für Volkswirtschaft - Landesverwaltung Liechtenstein
  17. Range of rank on the PISA 2006 science scale
  18. Verkehrsverbund Vorarlberg
  19. Heliport Balzers FL LSXB
  20. Heliports - Balzers LSXB - Heli-Website von Matthias Vogt


  • Liechtenstein — A Modern History by David Beattie CMG, London, 2004, ISBN 1-85043-459-X.

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