Liechtenstein

The Principality of Liechtenstein (German: Fürstentum Liechtenstein) is a tiny, doubly-landlocked state in Western Europe, bordered by Switzerland to its west and by Austria to its east. Mountainous, it is a winter sports resort, though it is perhaps best-known as a tax haven.

Economy

Main article: Economy of Liechtenstein

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Despite its small geographic area and limited natural resources, Liechtenstein has developed into a prosperous, highly industrialized, free-enterprise economy, and boasts a financial service sector and also living standard which compare favourably to those of the urban areas of Liechtenstein's large European neighbours. Advantageously low business taxes – the maximum tax rate is 18% – as well as easy Rules of Incorporation have induced about 73,700 holding (or so-called 'letter box') companies to establish nominal offices in Liechtenstein. Such processes provide about 30% of Liechtenstein's state revenue.

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Recently, Liechtenstein has shown strong determination to dispel the country's unhelpful image as a centre of international money-laundering.

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Liechtenstein participates in a customs union with Switzerland 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.

Related Topics:
Customs union - Switzerland - Swiss franc - European Economic Area - European Free Trade Association - European Union - 1995

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