LIECHTENSTEIN

History

In the year 1719 the County of Vaduz and the Lordship of Schellenberg were elevated to the rank of Imperial Principality of Liechtenstein. A few years earlier Prince Johann Adam Andreas of Liechtenstein acquired these two pieces of Land in order to obtain, as owner of a territory under the direct sovereignty of the Empire, the right to a seat and a vote in the Diet of the Princes of the Empire. Inclusion in the Rhenish Confederation, founded by Napoleon in 1806, brought Liechtenstein full sovereignty. Between 1815 and 1866 the country was a member of the German Confederation. It is the only state among the former members of this alliance to have retained its independence.

Government

Liechtenstein is a constitutional, hereditary monarchy upon democratic and parliamentary basis; the power of the State is inherent in and issues from the Prince and the people and shall be exercised by both of them in accordance with the provisions of the Constitution. The Diet consists of 25 representatives, who are elected by the people by universal, equal, secret and direct suffrage, according to the system of proportional representation. The Head of Government and the four Government Councillors are appointed by the Prince with the concurrence of the Diet and on the proposal of the latter.

Economy

Despite its small size and limited natural resources, Liechtenstein has developed into a prosperous, highly industrialised, free-enterprise economy with a vital financial service sector and living standards on par with the urban areas of its large European neighbours. Low business taxes - the maximum tax rate is 18% - and easy incorporation rules have induced about 73,700 holding or so-called letter box companies to establish nominal offices in Liechtenstein, providing 30% of state revenues. The country participates in a customs union with Switzerland and uses the Swiss Franc as its national currency. It imports more than 90% of its energy requirements. Liechtenstein is a member of the European Economic Area (an organisation serving as a bridge between European Free Trade Association (EFTA) and EU) since May 1995. The government is working to harmonise its economic policies with those of an integrated Europe

Police

The Security of the Principality of Liechtenstein reports to the Government and is bound by their instructions. The Police functions include traffic control, security and criminal investigation.