It has more companies than citizens, but the prince’s tiny tax haven is thriving

John Andrews on city life in Liechtenstein.

The speed limit on Swiss motorways is 120km per hour and, if you’re travelling from northern Italy to southern Germany through Switzerland at exactly that speed, you’ll spend a scant ten minutes traversing the entire western border of the sovereign Principality of Liechtenstein. Glance to your right about halfway up the country and you’ll notice a fairy-tale castle perched on a hill, overlooking a small town. This town, as well as being the geographical centre of the tiny, landlocked state (the fourth smallest in Europe), is also its political focal point: welcome to Vaduz. It was founded in the 13th century, and both it and its country had their credentials strengthened some time later by a King Wenceslas (no, not that one). In those days — long before the involvement of the family who were to give the country its name — the region was part of the Holy Roman Empire, and since then Liechtenstein, governed from Vaduz, has developed through a succession of allegiances. In 1923 it formed a union with Switzerland, with which it shares a currency and a postal system (although famously it still issues its own stamps). There are no border controls, either; just some discreet signs on the bridges that span the Rhine to let you know that you are now in a separate sovereign state. Despite its close links with its neighbour to the west, it has a distinctly independent identity, one that its government and royal family — both based in Vaduz — are rightly keen to maintain. Having Swiss citizenship myself, I voted, only a few years ago, in favour of Switzerland joining the United Nations, one of the last countries to do so. Liechtenstein had already signed up several years before, and is also a member of the European Economic Area, a situation the merits of which the Swiss have yet to be convinced about.