The Principality of Liechtenstein was established within the Holy Roman Empire in 1719; it became a sovereign state in 1806. Until the end of World War I, it was closely tied to Austria, but the economic devastation caused by that conflict forced Liechtenstein to conclude a customs and monetary union with Switzerland. Since World War II (in which Liechtenstein remained neutral) the country's low taxes have spurred outstanding economic growth. However, shortcomings in banking regulatory oversight have resulted in concerns about the use of the financial institutions for money laundering.
Vaduz Castle is the palace and official residence of the Prince of Liechtenstein. The castle gave its name to the town of Vaduz, the capital of Liechtenstein, which it overlooks from an adjacent hilltop. The Princely Family of Liechtenstein acquired Vaduz Castle in 1712 when it purchased the countship of Vaduz. At this time,Charles VI, Holy Roman Emperor, combined the countship with the Lordship of Schellenberg, purchased by the Liechtensteins in 1699, to form the present Principality of Liechtenstein.[7] During the medieval days of the principality, the prince could have sought refuge in the castle from a potential peasant uprising.
