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Country Profile

Area: 160 sq km (61.8 sq miles). Liechtenstein is the sixth smallest country in the world.
Population: 36,157 (2010)
Capital City: Vaduz
Languages: German (official), Alemannic dialect (colloquial)
Religion(s): Roman Catholic 78.4%, Protestant 8.3%, Religion of Islam 4.8% unknown 4.1%, No affiliation 2.8%, Christian Orthodox 1.1%, other 0.5% (2010 Liechtenstein Statistical Yearbook)
Currency: Swiss Franc (CHF)
State, Constitution: Hereditary constitutional monarchy, based on a democratic and parliamentary system
Head of State: Prince Hans-Adam II. On 15 August 2004, Prince Hans-Adam II
entrusted Hereditary Prince Alois to exercise sovereign powers as his representative.
Parliament: 25 members elected by the people for four years in universal, direct and secret elections. Distribution of seats 2009-2013 is Patriotic Union (VU) 13 seats, Progressive People’s Party (FBP) 11 seats and Free Voter’s List (FL) 1 seat.
Government: Five-member government nominated by parliament and appointed by the Prince for four years.
Prime Minister: Dr. Klaus Tschütscher (VU)
Deputy Prime Minister: Dr. Martin Meyer (FBP)
Membership of international groupings/ organisations: Council of Europe, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Conference of Ministers of Transport , European Conference of Postal and Telecommunications, European Court for Human Rights, European Economic Area, European Free Trade Area, European Patent Organization, European Telecommunication Satellite Organization, International Atomic Energy Agency, Intelsat, Interpol, International Commission for the Protection of the Alps, International Court of Justice in The Hague, International Olympic Committee, International Telecommunications Union, International Union for Conservation of Nature and Natural Resources, Organisation for Security and Co-operation in Europe, UN, United Nations Conference on Trade and Development, United Nations Economic Commission for Europe, Universal Postal Union, World Intellectual Property Organisation, World Trade Organisation. The EU Council gave its consent for Liechtenstein to join the Schengen area; the official incorporation is expected in the second half of 2011.

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Basic Economic Facts

GDP: CHF 5 billion (2010)
Inflation: 0.5% (2009)
Major Industries: Liechtenstein has no heavy industries. Instead, there are small-scale industries in large numbers, which produce goods like false teeth and dental supplies, electronics, ceramics, pharmaceuticals, precision instruments, food products and furniture. The domestic market is small and industry is strongly export-oriented. Liechtenstein also generates income from service industry of which financial services are very important. Other sources of interest for revenue generation are banking and insurance, tourism, and the sale of postage stamps, etc.
Major trading partners: EU and EFTA countries. In 2009, about 61% of Liechtenstein's goods were exported to Western Europe, 14.7% to the Americas, 12.49% to Asia, and the remaining share to the rest of the world. In 2008, the U.S. was one of the most important trading partners for Liechtenstein, with approximately $452 million (SFr. 490 million) worth of exports and $40 million (SFr. 43.3 million) of imports. Germany was first with a total trade value of $1.76 billion (SFr. 1.9 billion).
Unemployment Rate: 2.3% (March 2011)
Exchange rate: GBP1 = CHF 1.28 (April 2011)

Economic Snapshot

Until the end of the Second World War, Liechtenstein was mainly agricultural and poor. Since then, it has developed a substantial, mainly light-industrial base. Between 1950 and 1995 exports rose from CHF 15.2m to CHF 2.9bn. Despite Liechtenstein’s modest population, the economy provides over 33,000 jobs, of which 17,000 (51%) are filled by commuters from Switzerland, Austria, and Germany. Unemployment is low at 2.3% (March 2011). Liechtenstein’s major exports are dental products (it is the world’s largest exporter of false teeth), hardware, electronic equipment, small speciality machinery, foodstuffs and stamps.

Liechtenstein has had a Customs Union with Switzerland since 1923. It continues to use the Swiss currency and enjoys Switzerland’s high standard of living.

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A state centred on Vaduz was founded in 1342 and the territory reached its present boundaries by 1434. The two counties of Vaduz and Schellenberg were purchased by the Liechtenstein family in 1699 and 1712, and were constituted on 23 January 1719 as a Principality by the Holy Roman Emperor Charles VI. Liechtenstein was the last remaining monarchy of the Holy Roman Empire before it became independent in 1806.

Sovereign political rights were given to the people under the 1921 Constitution and, in 1923, it signed a Customs Treaty with Switzerland and introduced the Swiss franc as the national currency. In 1975 it joined the OSCE, and in 1978 the Council of Europe. Liechtenstein again strengthened its international relations in the 1990s by joining the UN (1990), EFTA (1991) and the EEA and WTO (1995).

Longer Historical Perspective

BBC News Country Timeline: Liechtenstein (

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While the UK has no resident mission in Liechtenstein, UK officials in Berne visit the Principality frequently and relations are very good.

Of particular note is a Tax Information Exchange Arrangement (TIEA) between the UK and Liechtenstein which was signed in Vaduz on 11 August 2009 by Stephen Timms MP, the then Financial Secretary to the Treasury, and Dr Klaus Tschütscher, Prime Minister of Liechtenstein. It came into force in 2010.

The TIEA enables the UK and Liechtenstein to exchange information to OECD and international tax standards to ensure that the right amount of tax is paid in each country in the future. For a period up to 2015, the agreement provides special conditions to encourage the self-declaration of clients of Liechtenstein´s financial service industry with tax arrears in the UK. In return, Liechtenstein commits itself to ensure tax compliance of British clients from 2015 onwards.

The Principality of Liechtenstein is making significant efforts to prevent money laundering. It is a member of the EU expert group MONEYVAL and undergoes regular evaluation by a joint IMF and MONEYVAL expert group.

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The Principality of Liechtenstein is a land-locked sovereign state on the east bank of the Rhine, between Switzerland and Austria. Two-thirds of its 160 sq km are covered by mountains. Its total population is 36,157and the capital Vaduz has a population of just over 5,000. The country is divided into 11 administrative divisions. Liechtenstein has no airport and limited public transport (the only way to access Vaduz by public transport is using the postal buses).

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Trade & Investment with the UK

Since World War II, the country's low tax rate and traditions of banking confidentiality have contributed significantly to the ability of financial intermediaries in Liechtenstein to attract funds from outside the country's borders. In November 2009, the Organization for Economic Cooperation and Development (OECD) recognized Liechtenstein as a jurisdiction that has implemented international cooperation standards in tax matters, and it has removed Liechtenstein from the so-called OECD "grey list".

Liechtenstein’s industrial sector contributes 39% of the country’s GDP, with several companies of global importance. Some, such as power tool makers Hilti and the heating producer Hoval are investors in the UK.

In addition to the industrial sector, Liechtenstein has developed a strong services sector (contributing 54% of GDP). In particular, branches such as real estate, information systems, and other services for enterprises have showed a sharp increase, followed by trust companies and legal services. Five out of ten employees now work in the services sector. As a rule, these newly established enterprises tend to be small. The 2008 economic study showed that approximately 99.5% of businesses located in Liechtenstein are mostly small and medium-sized enterprises.

Agriculture contributes around 6% to GDP.

Although Liechtenstein is not part of the EU, Liechtenstein belongs to the European Economic Area, and therefore participates in the single market. It is a small but wealthy market for British goods. Liechtenstein is about to become a member of the Schengen group.

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The principality of Liechtenstein is a hereditary constitutional monarchy, based on a democratic and parliamentary system. The current Head of State, Prince Alois, succeeded his father Prince Hans Adam II on 15 August 2004. The legislature consists of a unicameral parliament with 25 seats to which members are elected by direct, popular vote under proportional representation. Elections take place every four years, and the next elections will be held in 2013. The executive is nominated by parliament and appointed by the Head of State.

Head of State: Prince Hans-Adam II. On 15 August 2004, Prince Hans-Adam II
entrusted his son Hereditary Prince Alois to exercise his sovereign powers as his representative.

Parliament: 25 members elected by the people for four years in universal, direct and secret elections. Distribution of seats 2009-2013 is Patriotic Union (VU) 13 seats, Progressive People’s Party (FBP) 11 seats and Free Voter’s List (FL) 1 seat.

Government: Five-member government nominated by parliament and appointed by the Prince for four years.

The two main parties, the Progressive People’s Party (FBP) and the Patriotic Union (VU), have historically formed a “Grand Coalition”, taking 24 of the 25 parliamentary seats between them in the current parliament. Unusually, after the elections in 2001, the FBP formed a single-party government led by Party Leader Otmar Hasler. However, in both the 2005 and 2009 elections, the FBP lost its majority and there has consequently been a return to traditional coalition politics. The new government, announced on 8 February 2009, is as follows:

Prime Minister: Dr. Klaus Tschütscher (VU)
Deputy Prime Minister: Dr. Martin Meyer (FBP) (also responsible for Economic Affairs, Transport and Construction)
Foreign Minister: Dr. Aurelia Frick (FBP) (also responsible for Justice and Cultural Affairs)
Minister: Dr. Renate Müssner (VU) (responsible for Public Health, Social Affairs, Environmental Affairs, Land Use Planning, Agriculture and Forestry)
Minister: Hugo Quaderer (VU) (responsible for Home Affairs, Education and Sport)

On 16 March 2003 Liechtensteiners voted in a national referendum to accept constitutional amendments proposed by the Ruling Prince, Hans-Adam II. The proposals were accepted by 64.3% of voters. The Prince now has the power to dissolve parliament and appoint an interim government, to dismiss individual members of government and veto any parliamentary legislation. The amendments have also given the Prince ultimate control over the appointment of judges. No further constitutional amendments can be adopted, (except in the case of a referendum abolishing the royal house) without the approval of the reigning Prince.

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Last Updated: July 2011

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