and related services for wealthy clients. Of Liechtenstein's fat and lazy banks, VPB was one of the fattest and laziest. But financial realities forced it to change. Profits dropped more than 80% between 2000 and 2002, due to shady but profitable clients closing their accounts, falling stock markets and high costs. VPB's share price got hit too, falling from its all-time high of CHF380 in 2000 to a low of CHF117 in 2003. In Vaduz - the only city in Liechtenstein - the official currency is the Swiss franc (CHF).

But during this time, VPB laid the groundwork for a fresh start, cutting costs and, for the first time, actively marketing its services. These changes are now bearing fruit. VPB's attraction is safety. A growing number of foreign investors are anxious to stash money in a safe haven where it will neither be taxed nor confiscated. In other words, a place like Liechtenstein, where the public finances are so sound that personal income tax was abolished because

The Principality of Liechtenstein is a tiny country locked in between Austria and Switzerland; it has just 33,500 residents and ranks as one of the world's smallest countries. But it's also rich and has been ruled by the same aristocratic family for centuries, making it one of the world's most politically stable nations.

Not long ago, a popular saying in German-speaking Europe was, "In Switzerland, the bankers don't talk. In Liechtenstein, they don't have tongues". But all that's changed. After reports by Interpol that traces of practically every white-collar crime committed in Europe led to Liechtenstein, the OECD's Financial Action Task Force put this tiny country on its money laundering "blacklist" in 2000. Swift and painful changes followed. Declaring that "Liechtenstein faces the biggest domestic and foreign political crisis since World War II", Liechtenstein's ruling prince spearheaded sweeping financial reforms that gave the government much greater powers to investigate suspect financial transactions, confiscate laundered assets and cooperate with authorities in other countries in investigations of serious crimes.

While Liechtenstein retains a culture of privacy and bank secrecy laws remain on the books, it now has the same know-your-customer rules that are in effect almost everywhere else in the world. However, Liechtenstein still does not cooperate in foreign tax investigations. Any foreign tax official inquiring about an account in Liechtenstein is politely shown the door.

Until the new laws took effect, it was possible to hire a lawyer to form a Liechtenstein company or trust and then operate a bank account for that entity without the bank ever knowing the identity of the owner. The lawyer was bound by law never to reveal his clients' identity. It was the ultimate tool for anyone wanting true anonymity. Liechtenstein was the last place in Europe to offer such a service and it attracted many billions of dollars as a result. With a near-monopoly for such dealings, Liechtenstein banks had an easy life. So easy that they even had the guts to charge customers a percentage for cash deposits.just think of a shop asking you for a percentage of what's in your wallet before you are allowed to buy something! Life couldn't have been more profitable.

Even better, until the early 1990s, there wasn't any competition. Only three banks existed in Liechtenstein. They shared business among themselves, the locals got well-paid jobs and no one had to work particularly hard. Foreign banks finally pressured Liechtenstein into letting them set up shop, but even today there are only 16 banks active in the country.

Given this state of affairs, when the laws changed in 2000, a huge crisis resulted for Liechtenstein's banks. Many trusts and companies wound up their anonymous accounts rather than identify their beneficiaries. Some banks lost as much as 20% of their clients. The influx of money slowed and, simultaneously, the dot-com boom ended, taking equity markets down with it and cutting deeply into the banks' commissions and custody fees. It seemed that the world had conspired against Liechtenstein banks, with everything going wrong at once.

But in retrospect, the tough times did Liechtenstein a lot of good. The new laws forced the banks to stop being fat and lazy. They were forced to cut costs and fees to provide competitive services. They also learned a lesson about focusing on a single market - asset management - and how to market their services effectively. In short, Liechtenstein banks re-launched themselves as a safe and clean place for stashing away funds.

One of Liechtenstein's three original banks is the Verwaltungs und Privatbank. Most of VPB's voting shares are controlled by a trust set up by Liechtenstein's ruling family, headed by Prince Alois. VPB offers the entire spectrum of banking services, but the focus lays on asset management and related services for wealthy clients. Of Liechtenstein's fat and lazy banks, VPB was one of the fattest and laziest. But financial realities forced it to change. Profits dropped more than 80% between 2000 and 2002, due to shady but profitable clients closing their accounts, falling stock markets and high costs. VPB's share price got hit too, falling from its all-time high of CHF380 in 2000 to a low of CHF117 in 2003. In Vaduz - the only city in Liechtenstein - the official currency is the Swiss franc (CHF).

But during this time, VPB laid the groundwork for a fresh start, cutting costs and, for the first time, actively marketing its services. These changes are now bearing fruit. VPB's attraction is safety. A growing number of foreign investors are anxious to stash money in a safe haven where it will neither be taxed nor confiscated. In other words, a place like Liechtenstein, where the public finances are so sound that personal income tax was abolished because

vestigate suspect financial transactions, confiscate laundered assets and cooperate with authorities in other countries in investigations of serious crimes.

While Liechtenstein retains a culture of privacy and bank secrecy laws remain on the books, it now has the same know-your-customer rules that are in effect almost everywhere else in the world. However, Liechtenstein still does not cooperate in foreign tax investigations. Any foreign tax official inquiring about an account in Liechtenstein is politely shown the door.

Until the new laws took effect, it was possible to hire a lawyer to form a Liechtenstein company or trust and then operate a bank account for that entity without the bank ever knowing the identity of the owner. The lawyer was bound by law never to reveal his clients' identity. It was the ultimate tool for anyone wanting true anonymity. Liechtenstein was the last place in Europe to offer such a service and it attracted many billions of dollars as a result. With a near-monopoly for such dealings, Liechtenstein banks had an easy life. So easy that they even had the guts to charge customers a percentage for cash deposits.just think of a shop asking you for a percentage of what's in your wallet before you are allowed to buy something! Life couldn't have been more profitable.

Even better, until the early 1990s, there wasn't any competition. Only three banks existed in Liechtenstein. They shared business among themselves, the locals got well-paid jobs and no one had to work particularly hard. Foreign banks finally pressured Liechtenstein into letting them set up shop, but even today there are only 16 banks active in the country.

Given this state of affairs, when the laws changed in 2000, a huge crisis resulted for Liechtenstein's banks. Many trusts and companies wound up their anonymous accounts rather than identify their beneficiaries. Some banks lost as much as 20% of their clients. The influx of money slowed and, simultaneously, the dot-com boom ended, taking equity markets down with it and cutting deeply into the banks' commissions and custody fees. It seemed that the world had conspired against Liechtenstein banks, with everything going wrong at once.

But in retrospect, the tough times did Liechtenstein a lot of good. The new laws forced the banks to stop being fat and lazy. They were forced to cut costs and fees to provide competitive services. They also learned a lesson about focusing on a single market - asset management - and how to market their services effectively. In short, Liechtenstein banks re-launched themselves as a safe and clean place for stashing away funds.

One of Liechtenstein's three original banks is the Verwaltungs und Privatbank. Most of VPB's voting shares are controlled by a trust set up by Liechtenstein's ruling family, headed by Prince Alois. VPB offers the entire spectrum of banking services, but the focus lays on asset management and related services for wealthy clients. Of Liechtenstein's fat and lazy banks, VPB was one of the fattest and laziest. But financial realities forced it to change. Profits dropped more than 80% between 2000 and 2002, due to shady but profitable clients closing their accounts, falling stock markets and high costs. VPB's share price got hit too, falling from its all-time high of CHF380 in 2000 to a low of CHF117 in 2003. In Vaduz - the only city in Liechtenstein - the official currency is the Swiss franc (CHF).

But during this time, VPB laid the groundwork for a fresh start, cutting costs and, for the first time, actively marketing its services. These changes are now bearing fruit. VPB's attraction is safety. A growing number of foreign investors are anxious to stash money in a safe haven where it will neither be taxed nor confiscated. In other words, a place like Liechtenstein, where the public finances are so sound that personal income tax was abolished because

a result. With a near-monopoly for such dealings, Liechtenstein banks had an easy life. So easy that they even had the guts to charge customers a percentage for cash deposits.just think of a shop asking you for a percentage of what's in your wallet before you are allowed to buy something! Life couldn't have been more profitable.

Even better, until the early 1990s, there wasn't any competition. Only three banks existed in Liechtenstein. They shared business among themselves, the locals got well-paid jobs and no one had to work particularly hard. Foreign banks finally pressured Liechtenstein into letting them set up shop, but even today there are only 16 banks active in the country.

Given this state of affairs, when the laws changed in 2000, a huge crisis resulted for Liechtenstein's banks. Many trusts and companies wound up their anonymous accounts rather than identify their beneficiaries. Some banks lost as much as 20% of their clients. The influx of money slowed and, simultaneously, the dot-com boom ended, taking equity markets down with it and cutting deeply into the banks' commissions and custody fees. It seemed that the world had conspired against Liechtenstein banks, with everything going wrong at once.

But in retrospect, the tough times did Liechtenstein a lot of good. The new laws forced the banks to stop being fat and lazy. They were forced to cut costs and fees to provide competitive services. They also learned a lesson about focusing on a single market - asset management - and how to market their services effectively. In short, Liechtenstein banks re-launched themselves as a safe and clean place for stashing away funds.

One of Liechtenstein's three original banks is the Verwaltungs und Privatbank. Most of VPB's voting shares are controlled by a trust set up by Liechtenstein's ruling family, headed by Prince Alois. VPB offers the entire spectrum of banking services, but the focus lays on asset management and related services for wealthy clients. Of Liechtenstein's fat and lazy banks, VPB was one of the fattest and laziest. But financial realities forced it to change. Profits dropped more than 80% between 2000 and 2002, due to shady but profitable clients closing their accounts, falling stock markets and high costs. VPB's share price got hit too, falling from its all-time high of CHF380 in 2000 to a low of CHF117 in 2003. In Vaduz - the only city in Liechtenstein - the official currency is the Swiss franc (CHF).

But during this time, VPB laid the groundwork for a fresh start, cutting costs and, for the first time, actively marketing its services. These changes are now bearing fruit. VPB's attraction is safety. A growing number of foreign investors are anxious to stash money in a safe haven where it will neither be taxed nor confiscated. In other words, a place like Liechtenstein, where the public finances are so sound that personal income tax was abolished because

lowed and, simultaneously, the dot-com boom ended, taking equity markets down with it and cutting deeply into the banks' commissions and custody fees. It seemed that the world had conspired against Liechtenstein banks, with everything going wrong at once.

But in retrospect, the tough times did Liechtenstein a lot of good. The new laws forced the banks to stop being fat and lazy. They were forced to cut costs and fees to provide competitive services. They also learned a lesson about focusing on a single market - asset management - and how to market their services effectively. In short, Liechtenstein banks re-launched themselves as a safe and clean place for stashing away funds.

One of Liechtenstein's three original banks is the Verwaltungs und Privatbank. Most of VPB's voting shares are controlled by a trust set up by Liechtenstein's ruling family, headed by Prince Alois. VPB offers the entire spectrum of banking services, but the focus lays on asset management and related services for wealthy clients. Of Liechtenstein's fat and lazy banks, VPB was one of the fattest and laziest. But financial realities forced it to change. Profits dropped more than 80% between 2000 and 2002, due to shady but profitable clients closing their accounts, falling stock markets and high costs. VPB's share price got hit too, falling from its all-time high of CHF380 in 2000 to a low of CHF117 in 2003. In Vaduz - the only city in Liechtenstein - the official currency is the Swiss franc (CHF).

But during this time, VPB laid the groundwork for a fresh start, cutting costs and, for the first time, actively marketing its services. These changes are now bearing fruit. VPB's attraction is safety. A growing number of foreign investors are anxious to stash money in a safe haven where it will neither be taxed nor confiscated. In other words, a place like Liechtenstein, where the public finances are so sound that personal income tax was abolished because

and related services for wealthy clients. Of Liechtenstein's fat and lazy banks, VPB was one of the fattest and laziest. But financial realities forced it to change. Profits dropped more than 80% between 2000 and 2002, due to shady but profitable clients closing their accounts, falling stock markets and high costs. VPB's share price got hit too, falling from its all-time high of CHF380 in 2000 to a low of CHF117 in 2003. In Vaduz - the only city in Liechtenstein - the official currency is the Swiss franc (CHF).

But during this time, VPB laid the groundwork for a fresh start, cutting costs and, for the first time, actively marketing its services. These changes are now bearing fruit. VPB's attraction is safety. A growing number of foreign investors are anxious to stash money in a safe haven where it will neither be taxed nor confiscated. In other words, a place like Liechtenstein, where the public finances are so sound that personal income tax was abolished because there wasn't anything to spend the money on. Individual freedom and privacy is sacrosanct and there's no history of government confiscation for legitimate funds.