VADUZ — It was fiscal slaughter, a purge in the name of financial transparency. In five or six years, Liechtenstein saw half of the letterbox companies that made it a tax haven of choice — and of questionable repute — disappear.

"We've gone from 90,000 companies to about 40,000 now," explains Katja Gey, director of the Principality's Office of International Financial Affairs in the capital Vaduz.

The interest in these structures has largely vanished since Liechtenstein gave up on attracting undeclared money. While the Panama Papers are rocking the offshore world, Liechtenstein seems to show us another way.

It's been a largely forced march towards conformity that allows Liechtenstein to look down not only on Panama the straggler, but also on Switzerland, of which it long was a satellite.

For years, the tiny nation wedged between Switzerland and Austria was, with Panama, a specialist in the sale of dummy corporations. With just 3,000 Swiss francs a year ($3,100), a European client — typically a small or medium-sized business owner with a million bucks in undeclared income — could create his Liechtensteiner foundation.

Swiss banks used to order such companies by the dozens via Liechtensteiner fiduciaries, attorneys who could bring companies to life with nothing more than a rubber stamp, and who would sign the balance sheet each year. The state would charge 1,000 francs ($1,040) per company, for a total annual revenue of about 90 million francs ($94 million). The honey pot has largely dried up since then. With the end of bank secrecy, "one third of our clients have gone to Switzerland where foundations had their accounts, one third turned legal, and the tax authorities caught another third," a state employee says.

Those who left dispersed across Malta, Latvia, Cyprus, and of course Panama, a shelter for hardcore "tax evaders" who wanted to continue doing what they'd been doing. "In terms of money laundering and fight against tax evasion, Panama is now where Liechtenstein was many years ago," says Gey. The Principality was itself the target of a massive data leak in 2000 that exposed how offshore finance worked.

The former tax haven now wants to be a good pupil of international fiscal cooperation. And the forced clean-up has angered fiduciaries. Some have lost up to 80% of their customer base. Others survive only thanks to the task of liquidating foundations, which can be extremely arduous when it comes to big families and big money.

This transition will soon come to an end. By 2017, one year before Switzerland, Liechtenstein will start applying the automatic exchange of information. As a member of the European Economic Area, it must abide by European rules and thus create a central register eventually of all beneficiaries of accounts and companies registered there, a measure that Switzerland has yet to contemplate.

Liechtenstein still has ambitions to act as the world's attorney for the wealthy. Only now, it wants to do so with offshore structures that will actually serve their declared purposes, including the protection of family heritage in case of inheritance. "We used to be like a big supermarket, now we're more like a boutique," Gey concludes.