Welcome Your IET account
Vaduz Castle - office and residence of Prince Hans Adam II, Liechtenstein's ruling monarch

After All: Not just false teeth, tax breaks and letterbox companies

Image credit: Dreamstime

We visit Liechtenstein – the world’s richest country: a financial powerhouse and ‘mini-industrial giant.’

Readers of After All might have noticed that the last three columns were all, to a certain degree, devoted to Europe’s small geopolitical entities: enclaves, micronations and ministates, all prosperous and technologically advanced, despite (or maybe because of) their minuscule size.

One of the best examples is the Principality of Liechtenstein (area 160 square km, population 39,000), often referred to – somewhat paradoxically – as a ‘mini-industrial giant’ due to its inherent passion for innovation, its proportionally extensive infrastructure, with over 1,800 industrial (mostly manufacturing) outlets specialising in precision engineering, electronics, dental products, metal finishing, optics and ceramics, and its strong belief in free enterprise.

Partly due to its tax haven status, Liechtenstein, which has more registered companies than citizens, boasts of the world’s highest per capita GDP of over $140,000, which makes it, according to some estimates, the world’s richest country.

The banks in Vaduz, the capital, look deceptively small, quiet and inconspicuous from the outside, and only God (and maybe the late Robert Maxwell) knows how many secrets are hidden in their dark, air-conditioned vaults. With only one diplomatic representation in Switzerland, Liechtenstein is practically immune from the pressure of foreign fiscal authorities, and any breach of professional discretion in financial and tax matters is punishable there.

Each letterbox company is required to have a Liechtenstein citizen on its board, but the real owners’ names remain in the dark. If the police want to find out who the owner of this or that company is, they have to make an official request to the High Court and prove that it is in the public interest. It takes months and sometimes years for the High Court to make a decision on whether to reveal the names or not. In the case of Ferdinand Marcos, the former President of the Philippines, it took the High Court five years to authorise the disclosure of his name. Robert Maxwell (as well as Marcos) had dozens of companies registered in Liechtenstein. Now you can understand why his millions were so hard, if not impossible, to trace. Unsurprisingly, Liechtenstein has one of the lowest tax rates in the world.

One of the country’s main exports to over a hundred countries is false teeth and other dental products, manufactured by the Ivoclar Vivadent factory, the principality’s second-biggest employer (recently overtaken by Hilti – maker of high-end power tools), which I visited in 1996, long before I had a set of beautiful Hungarian-made dental implants embedded in my long-suffering mouth at the aptly named SmileSavers clinic in Budapest.

The brand name Ivoclar was familiar to me from childhood thanks to my mother, a chemical engineer who specialised in plastics for stomatology. I remember leafing through the colourful Ivoclar booklets she received from Liechtenstein – in their sheer glossiness they stood out against the drab Soviet reality, like objects from another planet.

I was met by Ivoclar’s head of PR, a smartly dressed young man, who – to my pleasant surprise – didn’t look at all like the Roman poet Virgil, Dante’s escort through Hell, with which, still fresh from the USSR with its openly sadistic dentistry, I used to associate every dental establishment on Earth. The PR man showed me around the company building – modern, bright and neat, just like himself.

In the corridors, false teeth of all imaginable shapes and sizes – from tiny baby’s milk-teeth to Dracula’s fangs – were displayed in special glass containers.

“Each year we produce 40 million high-quality aesthetic teeth, which we export to more than a hundred countries worldwide,” my escort was saying. “The teeth come in 60 different colours...”

“Sixty colours?” I repeated in disbelief.

“Yes!” he smiled, revealing a set of perfect (Ivoclar-made?) teeth. “You see, human teeth are not necessarily snow-white (‘Mine are definitely not,’ I thought). Most people prefer different shades of colour.” ‘Like light-brown, dark-brown and pitch-black,’ I wanted to say, but thought better of it: I was ashamed of my teeth, those little fragments of the rotten Soviet empire, and I didn’t feel like exposing them by opening my mouth too often.

“Goodbye!” I said to my escort, through my remaining clenched teeth...

During that memorable visit to Liechtenstein, I also had a one-hour audience with Prince Hans Adam II, who rules the principality almost single-handedly – helped in everyday matters by a small office of just six employees.

A sprightly, smiling man strode in. We shook hands and I immediately felt at ease. The Prince had a warm, disarming smile. On his wrist was a simple electronic watch.

“Our country is indeed a happy one,” he said in impeccable English with a slight German accent. “We’ve got 100 per cent literacy, high living standards and practically no crime. There are problems, of course. In the last couple of years unemployment has grown from 0.1 per cent to 0.7 per cent.”

I made some hasty calculations on a piece of paper: 0.1 per cent of Liechtenstein’s population was then 30 people.

“We also work very hard, having the longest working week in Europe,” continued the Prince. “The working day here, and my working day too, starts at 8am. There is no lunchbreak culture.”

It is not common knowledge that Liechtenstein’s national anthem, ‘Oben am jungen Rhein’, shares the same melody as ‘God Save the Queen’. Unfortunately, the similarities with the UK all but end here.

And here’s another little-known fact: the tiny principality was the only Western country to find enough stamina not to hand over Russian prisoners of war to Stalin after the end of the Second World War. Unlike two-and-a-half million other Russian soldiers and Cossacks, captured by the Allies only to be handed over to Stalin for execution, those 200, who asked for political asylum in Liechtenstein, were not extradited and survived.

What can I say? Strong and proud does not necessarily mean huge – a good lesson for the modern world, taught so convincingly by the tiny principality in the Alps. 

Sign up to the E&T News e-mail to get great stories like this delivered to your inbox every day.

Recent articles

Info Message

We use cookies to give you the best online experience. Please let us know if you agree to all of these cookies.

Learn more about IET cookies and how to control them