Originally a farming community the area currently known as the Principality of Liechtenstein was part of the Roman Empire by 15 B.C. The region, known as Raetia under the Romans was later part of Charlemagne’s Frankish empire and then a part of the Holy Roman Empire.
It was under the Holy Roman Empire that it became known as Lower Raetia and the province has retained its borders unchanged since 1434.
The country was invaded by Austrian and Swedish troops during the Thirty Years War (1618 – 1648) and afterwards the plague hit the country so badly that the counties of Vaduz and Schellenberg, which make up modern day Liechtenstein, were sold to the to the House of Liechtenstein in 1699 and 1712 respectively.
On 23rd January 1719 Charles VI, the Holy Roman Emperor declared the two counties would be promoted to a principality with the name of Liechtenstein. With the Napoleonic Wars and the decline of the Holy Roman Empire, in 1806 Liechtenstein became a sovereign state and was subsequently part of the French Confederation of the Rhine and then later a part of the German Confederation.
In 1862 a new constitution provided for an elected Diet or Landtag and in 1868 with the dissolution of the German Confederation Liechtenstein declared its neutrality. That neutrality was maintained throughout World War One and in 1919 Liechtenstein signed a treaty with Switzerland whereby the Swiss would look after diplomatic and consular relations for the principality in countries where it had no representation.
In World War Two Liechtenstein continued to maintain its neutrality which was observed by all sides and following the war low corporate tax rates made it attractive to companies. Over the years it has become an important and wealthy financial centre.
In 1990 Liechtenstein joined the United Nations (UN) and in 1995 it joined the European Economic Area (EEA) and the World Trade Organisation (WTO).
The country is a constitutional monarchy, but one where the monarch and government share power. In 2003 after months of negotiations, the current ruler, Prince Hans-Adam II was given more powers in a referendum which effectively allows him to veto any legislation by failing to sign it within six months.
The Patriotic Union and the Progressive Citizens’ Party can trace their histories back to the early 1900s and have each taken control of government for long periods. A third party in the Diet, the Free List, appeared on the scene in 1986.
Prince Hans-Adam II is Head of State.
The unicameral Diet or Landtag has 25 members elected by popular vote under proportional representation to serve four year terms.
The Transparency International Corruption Perceptions Index (CPI) 2011 does not provide data for Liechtenstein.