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capital of Liechtenstein, neutral nation, Rhine River Valley, customs union, industrialized country

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Liechtenstein, small country in central Europe. Liechtenstein is one of the smallest independent nations in the world, with a total area of only 160 sq km (62 sq mi). The capital of Liechtenstein is Vaduz.

Roughly triangular in shape, Liechtenstein is a picturesque country that occupies a part of the Rhine River Valley in the Alps. The tiny landlocked nation is nestled between Austria on the north and east and Switzerland on the west and south. Its entire western border with Switzerland is formed by the Rhine. The river valley is narrow in the mountainous south, but it widens to form fertile lowlands in the north.

Until the mid-20th century, Liechtenstein was largely a nation of farmers. Today it is a prosperous, industrialized country with a vigorous financial services sector. Liechtenstein’s low taxes and relaxed corporate governance rules have encouraged more than 75,000 business entities to establish offices in the country. Liechtenstein’s numerous banks provide financial services for foreign entities. Liechtenstein is world-famous for its decorative postage stamps, which are prized by tourists and provide an important source of national income.

Liechtenstein is a principality (a territory ruled by a prince). Its official name is the Principality of Liechtenstein (German Furstentum Liechtenstein). Like its Swiss neighbor, with which it is closely tied, Liechtenstein is a neutral nation. In 1921 Liechtenstein adopted the Swiss franc as its national currency, and in 1924 it entered into a customs union with Switzerland. The borders between both nations are open. Swiss customs officials are responsible for safeguarding the border with Austria and for representing Liechtenstein abroad. Liechtenstein has not maintained an army since 1868.


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