Liechtenstein. According to COUNTRYAAH, Vaduz is the capital of Liechtenstein which is located in Western Europe. When the EU published its first joint list of international tax havens in June, Liechtenstein was identified as one of 30 countries and territories, four of them in Europe. In 2013, the country had promised to facilitate banking secrecy and to cooperate with other countries within the framework of the OECD’s rules on information exchange.
- Also see AbbreviationFinder.org for Liechtenstein country abbreviations, including geography, history, economy and politics.
The Principality of Liechtenstein, nestled between Austria and Switzerland, is the only state still existing among the political units that made up the Holy Roman Empire. Its formation dates back to 1719, when Anton Florian (1656-1721), Prince of Liechtenstein, bought the territories of Schellenberg and Vaduz, still today the territorial base of the country. At the end of the Second World War, Czechoslovakia took possession by decree of the properties of the royal family of Liechtenstein in Bohemia, Moravia and Silesia, which covered an area of 1600 km2, or ten times the current size of the country. The rulers have never given up legal ways to regain the lands nationalized by the Beneš decree, but since 2009 Vaduz has nonetheless established diplomatic relations with both the Czech Republic and Slovakia.
The Principality’s closest ally and interlocutor today is Switzerland, which provides its defense – Liechtenstein is a traditionally neutral and demilitarized state – and which, since 1919, has represented the diplomatic and consular interests of the country in the states where Liechtenstein it has no institutional representation. A customs union has also been in force with Switzerland since 1923 (the second oldest in the world among those still in force) and intense police cooperation. Lastly, like Switzerland, Liechtenstein has been part of the European Free Trade Association since 1991 (EFTA, which also includes Norway and Iceland) and in 2011 made its full entry into the Schengen area of free movement.
Liechtenstein is a constitutional monarchy led by a prince, flanked by an elective parliament made up of 25 members. A constitutional referendum, approved in 2003 by 64% of citizens, greatly expanded the prince’s powers, giving him the power to veto parliamentary decisions, to appoint judges and to dissolve the government. In 2004, Prince Hans-Adam, in power since 1989, passed the baton to his son Alois, while retaining the title. Following the 2013 election victory, the majority of parliamentary seats currently belong to the Progressive Citizens’ Party (FBP). The head of the government was Adrian Hasler, former head of the state police.
The economic fortune of Liechtenstein – the country with the third highest GDP per capita in the world, amounting to $ 89,400 in 2009 – derives mainly from the attractiveness offered by its banking system, characterized by a low level of taxation and strict protection of the Bank secret. Since the early years of the twenty-first century, the scarce financial controls provided for by national legislation have however been the subject of growing international criticism: the country could offer a safe haven for capital from criminal or illegal activities awaiting money laundering. The government – on which the pressure has increased following the financial crisis of 2008 – has thus progressively introduced stricter legislation on financial and fiscal matters, adopting the transparency standards of the Organization for Economic Cooperation and Development (OECD). In parallel, it entered into bilateral agreements on taxation and the exchange of information with various interlocutors, including the US, the United Kingdom and Germany, to which was added the one with Italy in February 2015. Thanks to the efforts made by the government, in 2009 Liechtenstein was removed from the OECd ‘gray’ list of ‘non-cooperative’ countries in tax and financial matters.
In the second half of the last century, the development of the service sector also went hand in hand with the industrialization of the country. The secondary sector covers 28.2% of the national GDP and makes Liechtenstein one of the most industrialized areas of the European continent.