Country profile: Liechtenstein
The Principality of
Liechtenstein is a tiny, landlocked country tucked away between
Switzerland and Austria and with mountain slopes rising above the Rhine
Much of its wealth is based on its status as a low
tax haven. Around 75,000 companies have their nominal "letter box"
offices in Liechtenstein, where business tax rates are very favourable.
This status came under the spotlight in 2000 when two international
reports criticised Liechtenstein for lax financial controls. The
reports said that the Liechtenstein banking system enabled gangs from
Russia, Italy and Colombia to launder money from their criminal
Alpine slopes cover two-thirds of the territory
Stung by the criticism, Liechtenstein has gradually reformed some of
its laws. Customers opening bank accounts may now no longer remain
However, in 2008 Liechtenstein remained one of only
three states described as "unco-operative tax havens" by the
Organisation for Economic Co-operation and Development (OECD).
remained neutral in World War II. A report commissioned by the
government in 2001 after allegations that the country's banks had had
dealings with the Nazis found that the banks' actions had been above
board. It also found that slave labour from Nazi concentration camps
had been used on Crown estates in Austria, but described the
principality as a bystander rather than a perpetrator.
The country has come through a lengthy political wrangle over the role and power of the hereditary monarchy.
a campaign which was at times bitterly divisive the people voted in
March 2003 in a constitutional referendum to give Prince Hans-Adam
sweeping new political powers. The outcome was decisive with just over
64% in favour of the changes.
In effect, the referendum made
Liechtenstein Europe's only absolute monarchy. It gave Prince Hans-Adam
the power to hire and fire the government, despite publicly-expressed
fears that the development could usher in dictatorship.
Roman Catholic church has traditionally had a strong role in
Liechtenstein. Women faced a year in jail for having abortions until
new legislation legalised it in late 2005. A bid by pro-life activists
to stop the legislation from being passed failed when voters strongly
rejected their proposals in a referendum.
- Full name: Principality of Liechtenstein
- Population: 35,000 (UN, 2009)
- Capital: Vaduz
- Area: 160 sq km (61.8 sq miles)
- Major language: German
- Major religion: Christianity
- Life expectancy: 75 years (men), 82 years (women)
- Monetary unit: 1 Swiss franc = 100 centimes
- Main exports: Machinery, dental products, foodstuffs, stamps
- GNI per capita: n/a
- Internet domain: .li
- International dialling code: +423
Head of state: Prince Hans-Adam II
Prince Hans-Adam, a
successful banker, became head of state following the death of his
father, Prince Franz Josef, in 1989. In August 2004 he handed over the
day-to-day running of the principality to his son, Crown Prince Alois,
while remaining titular head of state.
Prince Hans-Adam II (left) with Prince Alois: Royals can veto laws, dismiss governments
In 2003 the royals won sweeping new powers in a constitutional
referendum which gave them the power to veto parliamentary decisions
and to sack the government.
The family also won powers over the
appointment of judges, powers which Prince Hans-Adam said were
essential to ensure that the judiciary was independent enough to tackle
tasks such as chasing illegal assets effectively.
Hans-Adam pointed out that the changes to the constitution took away
his right to rule by emergency decree for an unlimited period and to
nominate government officials.
Prince Hans-Adam, 58 at the time of the referendum, had threatened to leave Liechtenstein for Austria if he lost.
Alois, who was 36 when he took over the running of his country, trained
at Britain's Sandhurst military academy. He is the eldest of Prince
Hans-Adam's four children.
Prime minister: Klaus Tschuetscher
Tschuetscher took over as prime minister after his conservative
Patriotic Union (PU) won an absolute majority in parliament, allowing
the party to form a government on this own.
The previous government, led by Otmar Hasler of the Progressive Citizens Party (PCP), was a coalition of the PCP and PU.
Tschuetscher has said he seeks to rid the principality of its image as
an "uncooperative tax haven", promising to work with the Organisation
for Economic Co-operation and Development (OECD) in combating tax
Liechtenstein has a very sparse media scene, with the circulation figures of its newspapers at around 10,000 or less.
Its citizens rely on foreign and satellite broadcasters for most TV and radio services.