Now, Liechtenstein, which today (Jan. 23) celebrates the 300th anniversary of the principality’s creation, is thriving. The country is the world’s richest country per capita, driven by a 12.5% corporate tax rate—among the lowest in the continent—and freewheeling incorporation rules resulting in many holding companies establishing offices in the country’s capital, Vaduz. [...]
The country used its low taxes as a selling point. In 1955 Liechtenstein, described itself (paywall) as a country “where citizens dwell virtually tax-free, and where similar freedom awaits foreign corporations.” (The top tax rate at that time was 1.4%.) Foreign corporations with headquarters in Liechtenstein could enjoy “only minimal taxation”—as well as dreamy mountain views. Change did not come as swiftly as the country’s rulers might have liked: At an especially dire point in the 1960s, its ruling family was forced to sell off its Old Master paintings to the highest bidder—among them Leonardo da Vinci’s counterpart to the Mona Lisa (paywall) and four Breughels formerly displayed in prince Franz Josef II’s Austrian hunting lodge. [...]
Its politics remain stuck in the past too: until 1984, it denied women the vote. The country has two ruling princes—the head of state, Hans Adam II, and his son, Alois, who now performs day-to-day duties—who were previously a banker and an accountant before assuming their roles. Since 2003, they have had the right to veto parliamentary decisions, appoint judges, and sack the government. The country’s princes may be high up in their castle on the hill, but they are watching closely nonetheless.
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