Liberland's flag flies outside the country's lone building. Facebook/Liberland The world’s newest microcountry wants to become its foremost tax haven.

Liberland, which sits on 2.7 square miles of land along the Danube River between Serbia and Croatia, was founded earlier this month and plans to have only voluntary taxes.

"We don’t want the state to take money from the people," Vít Jedlička, a native of Prague and Liberland's new president, told Business Insider in a phone interview. "We want to have voluntary taxes."

Elected into office by a three-person committee, Jedlička says he started Liberland to “turn the concept of a state upside down.”

After working as a financial analyst in the Czech Republic, Jedlička became motivated by ever-increasing taxes and regulations to claim a plot of land that neither Serbia nor Croatia already have.

Residents and visitors of the new country will be allowed to use any money of their choice, including crypto currencies like Bitcoin, to buy and sell goods and complete other transactions within Liberland.

"People will not be bound to any currency," Jedlička told us.

Jedlička says he has already been approached with offers to set up currency and stock exchanges, both of which would be virtual in the mold of Nasdaq.

Liberland sits on a tiny plot of land along the Danube River between Serbia and Croatia. Business Insider The only functions of government will be to defend the republic, which will be a representative democracy, and to maintain law and order, according to Jedlička, who's a Libertarian.

"These two things we consider the most important roles of the state," he said, adding that drugs will be illegal "to maintain good relations with neighboring countries."

There will be no social welfare programs like healthcare and pensions, and the government will not be allowed to run with a deficit. Any law can be vetoed by referendum.

Right now, the plot of land is largely undeveloped but Jedlička insists that multiple architects have contacted him about planning the infrastructure and buildings of Liberland.

"There are already some architecture proposals," Jedlička said. "It’s crazy."

Initial build-out would be funded through investments, which Jedlička insists are pouring in, and basic services like roads and utilities would eventually be privately funded.

A beach along the Danube River, one of many in Liberland, according to Jedlička. Facebook/Liberland

The microcountry will thrive even if none of its residents volunteer to pay taxes because of the investments that are coming in from "all over the world, everywhere," according to Jedlička.

"We will have so much money that we will not know how to spend it," he added.

More than 260,000 people have already applied for citizenship in the fledgling republic, Jedlička said. The initial wave of citizens will be selected based on how they can help build the country.

There is no cap to how many people can "live and let live," the country's motto, within its borders. He is not concerned about a lack of space.

"I don’t think there is any reasonable limit. It depends on how much money there is," he said. "We can just build taller buildings. Look at Hong Kong."

For now, a team of seven people has joined Jedlička in sifting through emails and other correspondence from people seeking to relocate to Liberland.

First preference goes to businesses or wealthy people who "feel threatened by regulations imposed on them," he said.

"Economic freedom makes the country work, we see that around the world," he continued.

"Now we are doing it for real."

The undeveloped plot of land is larger than Monaco. Facebook/Liberland

Jedlička brushed aside concerns Serbia or Croatia might disagree with his claim to the land or want to take over the territory — the way China acquired Hong Kong — should it become successful.

"We are a nation, now, that will be an attack on a sovereign nation," he said.

Neither Croatia nor Serbia has responded to a letter declaring Liberland's independence, he admitted. But the country's first diplomatic missions to its neighbors will occur in the coming weeks.

"We hope to bring a lot of prosperity to the region and good relations with our neighbors," he said.

The city-state might seem tiny, but it's bigger than Monaco — which is less than one square mile.

“It’s a really nice piece of land in the shape of a heart,” Jedlička said, referring to his new country. “Nice river and sunny beaches. It’s also a nice place to set up a tax haven."