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Liechtenstein

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History

Liechtenstein History

The last remnant of the Holy Roman Empire, the pocket-sized Principality of Liechtenstein is a prosperous independent hereditary monarchy. Liechtenstein’s ruler of 51 years, until his death in November 1989, was His Highness Franz Joseph II. His son and heir, Prince Hans Adam (now His Highness Hans Adam II) was granted all the Regency’s executive powers in 1984. The country is united with Switzerland in a Customs Union and represented by Switzerland abroad. The population shares German-Swiss traditions, values, social courtesies and behavior, but remains proud of its independent status.

The population of Liechtenstein is amongst the worlds most prosperous. Financial services are the main component of the economy as over 75,000 foreign corporations have taken advantage of the principality’s banking secrecy laws to establish nominee companies which pay low taxes on both income and profits. Fees from these companies provide about one third of government revenues.

Since the mid-1990s, Liechtenstein has come under sustained pressure to deal with money laundering and other financial malpractice. In April 2002, Liechtenstein was strongly condemned by the Organization for Economic Co-operation and Development (the 24-strong club of industrialized nations) as one of seven countries worldwide which had refused to cooperate properly and now faces economic sanctions (as of October 2003, these have yet to be implemented).

With a very small domestic market, Liechtenstein has a large balance of payments surplus. The country has vital economic links with Switzerland, based upon a customs union, and uses the Swiss franc as currency. Liechtenstein joined the European Free Trade Association (EFTA) in 1991 and the European Economic Area (EEA), the body established by amalgamating the EU and EFTA, in May 1995. Other than Switzerland, most of Liechtenstein’s trade is conducted with members of the EU. It’s a beautiful country, but make sure to bring lots of money if you come.

 
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