A sovereign state is any territory which has its own laws and is not subject to the laws that govern another territory. It is alternatively called a "country" or "nation", but sovereign state is used in most cases of the law to clearly deliniate territories with certain legal characteristics from those that do not share those characteristics.

In addition, a sovereign state is not subject to the judgment of any court (either domestic or foreign) unless it specifically has given that court the ability to make judgments against it, either through statute or by voluntarily submitting to the jurisdiction of that court. For example, courts in the United States have made judgments against Iran, but the assets of Iran (even those in the United States) are not subject to seizure by any United States court.

Sovereign states are also allowed to bestow citizenship on individuals as it sees fit. Some states bestow citizenship to anyone born within the territory (subject to a few exceptions), while others given citizenship to anyone born to a citizen no matter where the child is born. Similarly, some allow persons who were not born citizens to become citizens if they meet certain criteria (such as residency requirements), while it is difficult or impossible in other states to obtain citizenship if one is not born a citizen.

Whether a particular territory is a sovereign state is made somewhat circular because it is largely dependent on whether other sovereign states recognize it as such. For example, although Taiwan clearly meets many of the criteria of a sovereign state, it is not always recognized as such by other sovereign states (who treat it as part of the People's Republic of China despite the fact that Chinese law has no application in Taiwan).