The Principality of Liechtenstein is a small German-speaking landlocked state of alpine Europe that borders Switzerland to the west and Austria to the east.

It is an enclave that, along with Switzerland, is not part of the European Union, but is part of the Schengen Area.

Its international relations are coordinated with Switzerland (the state with which it delegates its military defense).

It has an area of just over 160 sq. km and is inhabited by about 37,000 people. The capital is Vaduz and the most populated city is Schaan.

Liechtenstein is the fourth smallest country in Europe, after Vatican City, Monaco and San Marino. A third of its resident population are foreigners; mainly Germans, Austrians, Swiss and Italians.

Liechtenstein is a constitutional monarchy, headed by the prince, or Fürst. The sovereignty of the state is shared between the prince and the citizens, who choose a parliament. The parliament of Liechtenstein, the Landtag, is composed of 25 representatives chosen by the people. A five-member chamber is responsible for daily political affairs.

The country has an economic union with Switzerland and uses the Swiss franc as its national currency, although it has its own currency, the Liechtenstein franc.

Liechtenstein has been a member of the European Economic Area (an organization that acts as a bridge between the European Free Trade Association (EFTA) and the European Union) since May 1995.

Its economy, despite its small size and scarcity of natural resources, is highly industrialized, free-enterprise oriented and has the third highest per capita income in the world, after Qatar and Luxembourg.

Its economic bases are industrial exports, tourism and financial services.

Industries include electronics, textiles, precision instruments, metal manufacturing, power tools, anchor bolts, calculators, pharmaceuticals, and food products. It also produces wheat, barley, corn, potatoes, dairy products, livestock, and wine.

It has an important financial centre, specialized in financial services for foreign entities and wealth management for non-resident individuals.

Low business taxes and very advantageous incorporation laws have led to a significant number of multinational companies establishing nominal offices in Liechtenstein.

At Flag Theory, we’re here to help you during every step of your internationalization and structuring plans, and are constantly researching the best global locations to increase your privacy, freedom and wealth.

Below, you can find why and how to set up a company and do business in Liechtenstein, its banking and investment options, and how to get residency and eventually citizenship in the country.