To be honest, I always get Liechtenstein and Luxembourg mixed up. They’re both small countries in Europe that start with L. (Even though, Luxembourg in comparison is far larger than Liechtenstein. Actually, I think the coffee stain on my desk is larger than Liechtenstein.) So, hopefully doing this blog will help me keep them straight.
Liechtenstein is named after the Liechtenstein dynasty and literally means “light stone” (the “light” in this sense meaning “bright”). It was once part of the Holy Roman Empire, and the Emperor named this region after the family.
This sliver of land is located between Switzerland and Austria in central Europe. The entire country is generally located halfway between Innsbruck, Austria and Bern, Switzerland. It’s what’s considered a double landlocked country, meaning that the countries surrounding it are also landlocked countries. So, essentially Liechtensteiners have to travel through two countries in order to reach a coast. The country is located in the Alps, and the border with Switzerland is the Rhine River.
This region was originally part of the Roman Empire. The Alemanni (a Germanic tribe) were one of the largest inhabitants here before the Frankish Empire defeated them, and it changed hands again. By the 1200s, there were several dynasties that were established throughout the region. As they started to fall to other dynasties, the borders changed several times. Essentially, the Holy Roman Emperor bought off the remaining dynasties, forced them to combine lands and decreed it to be named after the Liechtenstein dynasty. After the Napoleonic Wars caused this area to fall under French rule, it later joined the German Confederation (which was ruled by the Emperor of Austria). For most of the 1800s up until the end of WWI, Liechtenstein had close ties with neighboring Austria and later Austria-Hungary. When Austro-Hungary broke up, Liechtenstein was kind of by itself for a while. During WWII, Liechtenstein began to look to Switzerland for assistance in its desire to remain neutral. Although it did remain neutral, there were some Nazi sympathizers despite no official Nazi party, and Liechtenstein did provide asylum to Russian soldiers. Liechtensteiners were prohibited from entering Czechoslovakia during the Cold War years, and it remained that way until 2009 when the country re-established diplomatic relations with the Czech Republic and Slovakia. As a means of strengthening revenue for the country, they lowered corporate tax rates during the 1970s and is now one of the richest countries in the world. Women weren’t granted the right to vote until 1984 and weren’t able to vote in their first election until 1986.
For many countries, the capital city is the largest city in the country, but not so for Vaduz. While Vaduz is the center of government, the neighboring city of Schaan to the north is the largest city (but it’s only larger by about 500-600 people). Both cities are located along the Rhine River on the western side of the country. The Vaduz Castle, where the Liechtenstein family once resided, is one of the most famous landmarks in the area. The Cathedral of St. Florin, a Roman Catholic church built in 1873, is also another famous landmark. Prince Franz Joseph II and his wife are buried there along with the wife of Prince Franz I. Vaduz is connected to other major cities in the region by bus and train; the nearest airport is in Zurich, Switzerland. Vaduz is home to a few museums and historical buildings along with a stadium for Vaduz’s soccer team.
Liechtenstein is small (obviously) and has limited natural resources. So, to figure out a way to boost their economy, they started offering super low corporate tax rates— a flat rate of 12.5%. (Andorra does this too, but theirs is 10%.) They also make it really easy to incorporate your business there as well; many holding companies register these companies (sometimes called “letter box companies”) under the name of a Liechtensteiner, usually a lawyer. This way it offers a type of anonymity for the true business owner and creates a tax haven for foreign companies. (How convenient.) Outside of tax evasion, the country also makes money in a less lucrative way: manufacturing (they are the world’s largest producer of false teeth—and that’s something to smile about), electronics, tools, pharmaceuticals, and others. They’re also known for their wine and beer.
The vast majority of Liechtensteiners are Roman Catholic, and a small number are Protestant. There are also a significant number of Muslims and non-religious people.
The official language is German; however, most Liechtensteiners speak an Alemannic dialect, which is actually quite different from Standard German. It’s closer to Swiss Standard German, which is what most people speak and understand. What’s interesting is that Liechtensteiners aren’t the only ones who speak Alemannic German. Besides portions of neighboring countries, it’s also spoken by the Amish in Allen County, Indiana (where Fort Wayne is—about two hours north of me).
Because Liechtenstein is so small, they have a relatively low crime rate. In fact, many people don’t even lock their doors at night. They are also keen on observing quiet times during the national lunch time of 12 noon to 1:30pm as well as after 10 pm. And once a year, all the residents are invited to have a beer with the Prince. It sounds to me like a great big retirement community. And given their proximity to Switzerland and Austria, I think their food will be rather tasty. My sister donated a couple of venison steaks to the cause, shot by my brother-in-law. I will start marinating it tomorrow. I’m hungry already.