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The Sovereign Military Order of Malta is a sovereign nation and the smallest country in the world by area and population. It occupies two buildings, the Magistral Palace, Via Condotti 68, in Rome and the Magistral Ville on the Aventine Hill. Both properties have extraterritorial status, that is they are not subject to local law.
SMOM issues passports, stamps, coinage, and license plates. It's biometric passports are compliant with ICAO09303. There are only 3 citizens, the Grand Master, the Deputy Grandmaster ,and the Chancellor.
SMOM has diplomatic relations with 104 other countries including 12 (specifically, Austria, Czech Republic, Germany, Hungary, Italy, Latvia, Malta, Poland, Portugal, Slovenia, Slovakia, and Spain) of the 25 of the Schengen Area.
SMOM has Permanent Observer Status at the United Nations. It has a standing invitation to participate as an observer in the sessions of the general assembly and maintains a permanent office at UN Headquarters.
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NOTE: Some individuals disagree with this answer claining that the Vatican is the smallest, and least populous country in Europe. It seems to the author that this is an erroneous answer. It appears that SMOM can, and has done, do anything any other nation has don except declare war. Not declaring war is no criteria for nationhood.
If it walks like a duck etc. .......!
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