Andorra

Located in the mountains between Spain and France, tiny  Andorra is one of the smallest countries in the world. However, it has a Ministry of Magic (GF28) and participates in international affairs.

"Yes, my son has recently gained twelve O.W.L.s, most satisfactory, yes, thank you, yes, very proud indeed.  Now, if you could bring me that memo from the Andorran Minister of Magic, I think I will have time to draft a response ..." - Barty Crouch Sr., having gone mad and babbling to a tree (GF28)