The Principality of Liechtenstein or Liechtenstein ( German : Liechtenstein ) is a landlocked country located in the Alps of Central Europe . Switzerland is bordered to the west, south and Austria to the east. It is just over 160 square kilometers and has an estimated population of 37,623. The state capital is Vaduz but Shan is the largest city. Liechtenstein has the world's second highest per capita GDP in terms of purchasing power parity and the lowest external debt in the world. Liechtenstein also has the second lowest unemployment rate in the world at 1.5% (where Monaco is first).
Liechtenstein is the smallest but the richest German country (by measuring GDP per capita) in the world and the only country located entirely in the Alps . It is defined as an emirate where its constitutional monarchy is headed by the Emir. Liechtenstein is divided into 11 municipalities. Many of its topography is mountainous, making it a destination for winter sports. The landscape is characterized by many cultivated fields and small farms, both in the south ( Oberland or Upper Lands) and in the North (Unterland or Lower Lands). The country has a strong financial sector in the capital, Vaduz, known as a tax haven . Liechtenstein is a member of the European Free Trade Association and part of the European Economic Area and the Schengen area but not in the EU .