The Mercenary State Zem is a nation of Landia known for its mercenaries and declares itself as a neutral country.
Zem is a landlocked nation that is surrounded on all sides by the other countries. The Gran Chaos Empire is on its western border, while the former Principality of Amidonia, now part of the Kingdom of Freidonia, occupies its eastern border. On its southern border lies the Republic of Turgis, while the northern border has the Orthodox Papal State of Lunaria.
The nation was founded by Mercenary Commander Zem who using his cunning destroyed the nation that formerly hired him and created a nation of mercenaries. The state declared "eternal neutrality" and would dispatch mercenaries to any nation that requested them
The Mercenary State Zem has declared itself as a neutral nation and is not a signatory of the Mankind Declaration Treaty. However, that does not mean that it doesn't get involved in the affairs of other nations, as it quite frequently hires out mercenaries to any nation, regardless of race, religion or politics.
As for it its own central government, it is not described in detail.
As its name implies, Zem's main source of revenue is the hiring of its mercenaries. The former Elfrieden Kingdom did have a contract with the Mercenary State until Kazuya Souma terminated that contract prior to the One Week War. The mercenaries are unpredictable and unreliable when a conflict begins to turn against them. This was proven during the One Week War when the mercenaries hired by the corrupt nobles sheltered by Georg Carmine fled on the second day of the conflict. Amidonia also had a contract with Zem, but that did not prevent the Principality from losing its capital city of Van, and was forced to pay war reparations.
Furthermore, Zem also had to pay ransoms for any of their mercenaries that were taken as POWs. As a result, the One Week War proved to be more costly than it was worth.