In real life, it has a population of just 1,519, and it's rather small
It is an exclave of Germany and an enclave of Switzerland and during WW2, Switzerland completely closed its border and excluded it from the rest of Germany.
The region voted in a referendum to join Switzerland, but Switzerland couldn't offer anything to Germany, so it remained German.
Our alternate history
In our story, the region, Nazism came into power, would have opted for sovereignty instead.
After WW2, a few of the Germans left for Germany, but the lower taxation made a few investors move in the country, mostly from Great Britain and the USA.
The new investors in the country passed a complete banking secrecy act and made the place a tax haven, which was made simple as it didn't have any banks, and it's rather small.
Soon, however, a bank was founded and built, mainly for laundering organized crime money.
This made quite a few more Germans leave, either for Switzerland or for Germany.
In the 1970s, the USA sent a covert mission to clean up the country, and it became more of a regular tax haven.
Lack of social laws
One of the things, however, which made it rich, was it's almost lack of social laws. Homosexual marriage was legal due to a lack of control of could get married. The law just set an age of consent (to 18 years). In fact, in 1985, the only court agreed that the way marriage was loosely defined didn't prevent a marriage to have more than 2 people, as long as all of them were married to each other, but that only one marriage could exist at a time: to add a 3rd person, you needed to divorce your first marriage and form a new marriage between the 3.
But making sex toys, prostitution and pornography were 100% legal between adults. In fact, in 1987, the only court agreed that sexual contracts could be signed between citizens and enforced by the court, including a BDSM submission contract.
Rumors are that it's mainly because the court was always on the verge of being abolished as a full-time service, and they wanted to keep their jobs, but still.
A BDSM Haven
In 1992, public nudity was allowed, and in 1994 a contract forcing a submissive man to be nude at all time was reviewed, and the man was confirmed to be banned from wearing clothes for the rest of the contract, even at his workplace which was now required to accommodate him.
This, made the news and the immigration changed as the place became a BDSM haven.
Until 2003, when the mistreatment of a submissive woman who only agreed to be submissive under a subterfuge shocked the community and all contracts binding women in submission were voided and banned.
Dominant men and submissive women left, but the opposite power exchange couples began immigrating and in 2009, dominant women and submissive men under contract outnumbered the vanilla residents, many of whom left.
The Road to Femdom
At the 2010 election, the Femdom party won the general elections in a landslide, especially since in 2007, the court, now formed of 2 mistresses and a single vanilla male judge agreed two to one that a dominant could vote for a submissive.
New laws introduced female domination as a de facto rule. Not that all women were dominant, not at all! But the law established a default submission contract for men in all heterosexual couples, and a sort of conservatorship for all men not married to a woman.
Most taxation of women was abolished (except for a token low amount), only men paid taxes, still, the little country flourished, notably as a tourist destination for Femdom couples.
In 2016, the court began recognizing BDSM contract signed before immigration, and stopped requiring submissive men to agree to immigration.
This means that an American wife can sign a "for fun" submission contract with her husband, offer a "vacation" to the little BDSM tourist heaven and just immigrate, trapping him in that submission contract which is now legally binding.
Enforced Male Chastity
In 2013, the courts agreed that a chastity device installed by a woman, with the consent of the man, constituted a contract of submission for the man. The next year, they agreed that consent for the installation of the device was not actually required and that possession of the key was proof of ownership of the man if not married.
In 2015, the courts confirmed that sale of submissive was human trafficking and would involve a life in jail, but that the sale, lending or leasing of chastity keys was 100% legal and that ownership of the man would follow the transfer of the keys.
In 2016, the law required all chastity devices to be registered, to have a secure key, and to have only one key in circulation with the other ones deposited with the government, when a dispute between two women each having a key for a man almost made it to the courts and the government didn't want to leave it to chance.
Mandatory Male Chastity
Instead, for the 2017 election, they ran on a platform of enforced chastity for every male citizen from the age of 18, with a locally produced titanium device custom fitted for every male. The complete key would, however, remain with the government until a special tax was paid by the man, and he selected a keyholder to hold it.
Due to the previous laws and decisions, this meant that once the law was put in place, all men became submissive. A few fled, but it created a new immigration of couples and even single men who enjoyed chastity.
They couldn't make the devices fast enough for a fast deployment, but in early 2020, it was completed. This created a void for woman in high places, as many positions required free employees (imagine if a bank director had his wife order him about his job? The court could be stuck between his obligations)