The Austrian Liechtenstein family acquired the fiefs of Vaduz and Schellenberg in 1699 and 1713 respectively, and they became an independent principality under the Holy Roman Empire in 1719 under the name Liechtenstein. The French under Napoleon occupied the country for a few years, but Liechtenstein regained its independence in 1815 within the new German Confederation. In 1868, after the Confederation dissolved, Liechtenstein disbanded its army of 80 men and declared its permanent neutrality, which was respected during both World Wars.

In 1919 Liechtenstein entrusted its external relations to neutral Switzerland. After World War II, Liechtenstein became increasingly important as a financial center, and the country became more prosperous. In 1989, Prince Hans Adam II succeeded his father to the throne, and in 1996 settled a long-running dispute with Russia over Liechtenstein family's archives, which had been confiscated during the Soviet occupation of Vienna in 1945 and later moved to Moscow. In 1978, Liechtenstein became a member of the Council of Europe, and then joined the UN in 1990, the European Free Trade Association (EFTA) in 1991, and both the European Economic Area (EEA) and the World Trade Organization in 1995.