Ransacked after two world wars, the tiny nation of Liechtenstein spent much of the first half of the 20th century decidedly strapped for cash. The European country was struggling to get by as a mostly agriculture-based economy, leaving its ruling family forced to sell off its Old Master paintings to the highest bidder.
Now, Liechtenstein, which celebrated the 300th anniversary of the principality’s creation on January 23, is thriving. The country is the world’s richest country per capita, driven by a 12.5% corporate tax rate—among the lowest in the continent—and freewheeling incorporation rules resulting in many holding companies establishing offices in the country’s capital, Vaduz.
Despite significant obstacles to trade—Liechtenstein is double-landlocked, meaning it is surrounded by landlocked countries and far from an ocean port—the nation is a poster-child for globalization.
In a government brochure welcoming new migrants, former prime minister Klaus Tschütscher described it as “an everyday operational reality. We need to interact with other countries, including foreign cultures, and our companies in a wide variety of sectors rely on foreign labour. This interaction is only possible because, despite the diminutive size of our country, we have kept our eyes open to the outside world.”
RUGGELL, LIECHTENSTEIN – JANUARY 23: Participants gather to march from the ruins of Schellenberg Castle to mark the 300th anniversary of the founding of Liechtenstein on January 23, 2019 near Ruggell, Liechtenstein. Marchers walking along several routes will converge on Scheidgraben, where 300 years ago the shire of Vaduz and the lordship of Schellenberg were united under the decree of Holy Roman Emperor Charles VI into the Principality of Liechtenstein. With a total geographic area of only 160 square kilometers and a population of approximately 38,000, Liechtenstein is among the smallest countries in the world. (Photo by Jan Hetfleisch/Getty Images)
With a total area roughly the same as New York’s Staten Island, the country has a population of around 40,000, of which around a third are foreigners. It is a member of the European Free Trade Association and part of both the Schengen Area and the European Economic Area. (The country’s wealth and lack of EU membership has proven inspirational (paywall) to many starry-eyed Brexiteers.)
Liechtenstein’s transformation from penury to prosperity took nearly a century. Historically a nominally independent state within the Holy Roman Empire, Liechtenstein was later affiliated with the Austro-Hungarian Empire.
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