📰 Monaco · page 3

There are no border formalities entering or leaving France, and there have been no land border controls since 1963.[126][125]217 For visitors, a souvenir passport stamp is available on request at Monaco's tourist office.218 This is located on the far side of the gardens that face the Casino.219

Twin cities

Monaco's twin cities are:220

Security and military

Main article: Law enforcement in Monaco, Military of Monaco

The wider defence of the nation is provided by France.221 Monaco has no navy or air force, but on both a per-capita and per-area basis, Monaco has one of the largest police forces (515 police officers for about 38,000 people) and police presences in the world.[146]222 Its police includes a special unit which operates patrol and surveillance boats jointly with the military.223 Police forces in Monaco are commanded by a French officer.[147]224

There is also a small military force.225 This consists of a bodyguard unit for the prince and his palace in Monaco-Ville called the Compagnie des Carabiniers du Prince (Prince's Company of Carabiniers);[148] together with the militarised, armed fire and civil defence corps (Sapeurs-Pompiers) it forms Monaco's total forces.[149]226 The Compagnie des Carabiniers du Prince was created by Prince Honoré IV in 1817 for the protection of the principality and the princely family.227 The company numbers exactly 116 officers and men; while the non-commissioned officers and soldiers are local, the officers have generally served in the French Army.228 In addition to their guard duties as described, the carabiniers patrol the principality's beaches and coastal waters.[150]229

Economy

Main article: Economy of Monaco

Monaco has the world's highest nominal GDP per capita at US$185,742, PPP-adjusted GDP per capita at $132,571 and GNI per capita at $183,150.[151][152][153]230 It has an unemployment rate of 2%,[154] with over 48,000 workers who commute from France and Italy each day.[77]231 According to the CIA World Factbook, Monaco has the world's lowest poverty rate[155] and the highest number of millionaires and billionaires per capita in the world.[156]232 For the fourth year in a row, Monaco in 2012 had the world's most expensive real estate market, at $58,300 per square metre.[157][158][159]233 Although the average price went down in 2020, to an average price of $53,378 per square metre, Monaco remains one of the most expensive places in the world to buy property.[160]234 By 2024, Monaco allows Visa-free travel from 86 countries around the world.[161]235

The world's most expensive apartment is located in Monaco, a penthouse at the Odeon Tower valued at $335 million according to Forbes in 2016.[162]236

The state retains monopolies in numerous sectors, including tobacco and the postal service.237 The telephone network (Monaco Telecom) used to be fully owned by the state.238 Its monopoly now comprises only 45%, while the remaining 55% is owned by Cable & Wireless Communications (49%) and Compagnie Monégasque de Banque (6%).239 Living standards are high, roughly comparable to those in prosperous French metropolitan areas.[163]240

Monaco is not a member of the European Union, but is very closely linked via a customs union with France.241 As such, its currency is the same as that of France, the euro.242 Before 2002, Monaco minted its own coinage, the Monégasque franc.243 Monaco has acquired the right to mint euro coins with Monegasque designs on its national side.244

Monaco has become a major banking centre, holding over €100 billion worth of funds.[164]245 Banks in Monaco specialise in providing private banking, asset and wealth management services.[165]246 The principality has successfully sought to diversify its economic base into services and small, high-value-added, non-polluting industries, such as cosmetics.[155]247

Tourism

Tourist arrivals of 2024 in %[166]248

One of Monaco's main sources of income is tourism.249 Each year many foreigners are attracted to its casinos and pleasant climate.[72][167]250 In 2022 there were about 300,000 international tourist arrivals.[168]251 Monaco is the only place in Europe where credit card points are not redeemable.252 Hotel points are not able to be accumulated nor are transactions recorded, allowing for an increase in privacy that is sought by many of the locals.253

Gambling industry

The plan for casino gambling was drafted during the reign of Florestan I in 1846.254 Under Louis-Philippe's petite-bourgeois regime a dignitary such as the Prince of Monaco was not allowed to operate a gambling house.[32]255 All this changed in the dissolute Second French Empire under Napoleon III.256 The House of Grimaldi was in dire need of money.257

The towns of Menton and Roquebrune, which had been the main sources of income for the Grimaldi family for centuries, were now accustomed to a much-improved standard of living and lenient taxation thanks to the Sardinian intervention and clamoured for financial and political concession, even for separation.258 The Grimaldi family hoped the newly legal industry would help alleviate the difficulties they faced, above all the crushing debt the family had incurred, but Monaco's first casino would not be ready to operate until after Charles III assumed the throne in 1856.259

The grantee of the princely concession (licence) was unable to attract enough business to sustain the operation and, after relocating the casino several times, sold the concession to French casino magnates François and Louis Blanc for 1.7 million francs.260

The Blancs had already set up a highly successful casino (in fact the largest in Europe) in Bad-Homburg in the Grand Duchy of Hesse-Homburg, a small German principality comparable to Monaco, and quickly petitioned Charles III to rename a depressed seaside area known as "Les Spelugues (Den of Thieves)" to "Monte Carlo (Mount Charles)."[169]261 They then constructed their casino in the newly dubbed "Monte Carlo" and cleared out the area's less-than-savoury elements to make the neighbourhood surrounding the establishment more conducive to tourism.262

The Blancs opened Le Grand Casino de Monte Carlo in 1858 and the casino benefited from the tourist traffic the newly built French railway system created.[170]263 Due to the combination of the casino and the railroads, Monaco finally recovered from the previous half-century of economic slump and the principality's success attracted other businesses.[171]264 In the years following the casino's opening, Monaco founded its Oceanographic Museum and the Monte Carlo Opera House, 46 hotels were built and the number of jewellers operating in Monaco increased by nearly five-fold.265 In an apparent effort not to overtax citizens, it was decreed that the Monégasque citizens were prohibited from entering the casino unless they were employees.[172]266 By 1869, the casino was making such a vast sum of money that the principality could afford to end tax collection from the Monegasques—a masterstroke that was to attract affluent residents from all over Europe in a policy that still exists today.267

Today, Société des bains de mer de Monaco, which owns Le Grand Casino, still operates in the original building that the Blancs constructed and has since been joined by several other casinos, including the Le Casino Café de Paris, the Monte Carlo Sporting Club & Casino and the Sun Casino.268 The most recent addition in Monte Carlo is the Monte Carlo Bay Casino, which sits on 4 hectares of the Mediterranean Sea; among other things, it offers 145 slot machines, all equipped with "ticket-in, ticket-out" (TITO).269 It is the first Mediterranean casino to use this technology.[173]270

Low taxes

Monaco has a 20% VAT plus high social-insurance taxes, payable by both employers and employees.271 The employers' contributions are between 28% and 40% (averaging 35%) of gross salary, including benefits, and employees pay a further 10% to 14% (averaging 13%).[174]272

Monaco has never levied income tax on individuals,[78] and foreigners are thus able to use it as a "tax haven" from their own country's high taxes, because as an independent country, Monaco is not obliged to pay taxes to other countries.[175][176]273

The absence of a personal income tax has attracted many wealthy "tax refugee" residents from European countries, who derive the majority of their income from activity outside Monaco.274 Celebrities, such as Formula One drivers, attract most of the attention but the vast majority are lesser-known business people.[177]275

Per a bilateral treaty with France, French citizens who reside in Monaco must still pay income and wealth taxes to France.[116]276 The principality also actively discourages the registration of foreign corporations, charging a 33 per cent corporation tax on profits unless they can show that at least three-quarters of turnover is generated within Monaco.277 Unlike classic tax havens, Monaco does not offer offshore financial services.[78]278

In 1998, the Centre for Tax Policy and Administration, part of the Organisation for Economic Co-operation and Development (OECD), issued a first report on the consequences of the financial systems of known tax havens.[178]279 Monaco did not appear in the list of these territories until 2004, when the OECD became indignant regarding the Monegasque situation and denounced it in a report, along with Andorra corpus, Liechtenstein corpus, Liberia corpus, and the Marshall Islands corpus.280 The report underlined Monaco's lack of co-operation regarding financial information disclosure and availability.[179][180]281 Later, Monaco overcame the OECD's objections and was removed from the "grey list" of uncooperative jurisdictions.282 In 2009, Monaco went a step further and secured a place on the "white list" after signing twelve information exchange treaties with other jurisdictions.[78]283

In 2000, the Financial Action Task Force on Money Laundering (FATF) stated: "The anti-money laundering system in Monaco is comprehensive.284 Difficulties have been encountered with Monaco by countries in international investigations on serious crimes that appear to be linked also with tax matters.285 In addition, the FIU of Monaco (SICCFIN) suffers a great lack of adequate resources.286 The authorities of Monaco have stated that they will provide additional resources to SICCFIN."[181]287

Also in 2000, a report by French politicians Arnaud Montebourg and Vincent Peillon stated that Monaco had relaxed policies with respect to money laundering including within its casino and that the Government of Monaco had been placing political pressure on the judiciary so that alleged crimes were not being properly investigated.[182]288 In its Progress Report of 2005, the International Monetary Fund (IMF) identified Monaco, along with 36 other territories, as a tax haven,[183] but in its FATF report of the same year it took a positive view of Monaco's measures against money-laundering.[184][185]289

The Council of Europe also decided to issue reports naming tax havens.290 Twenty-two territories, including Monaco, were thus evaluated between 1998 and 2000 on a first round.291 Monaco was the only territory that refused to perform the second round, between 2001 and 2003, whereas the 21 other territories had planned to implement the third and final round, planned between 2005 and 2007.[186]292

In June 2024, the FATF added Monaco to its "grey list", which includes countries needing "increased monitoring" due to statewide issues of money laundering and terrorist financing.[25]293

Numismatics

Main article: Monégasque franc, Monégasque euro coins, Euro gold and silver commemorative coins (Monaco)

Monaco issued its own coins in various devaluations connected to the écu already in the seventeenth century, but its first decimal coins of the Monégasque franc were issued in 1837 continued until 2001.294

Although Monaco is not a European Union member, it is allowed to use the euro as its currency by arrangement with the Council of the European Union; it is also granted the right to use its own designs on the national side of the euro coins, which was introduced in 2002.[187]295 In preparation for this date, the minting of the new euro coins started as early as 2001.296 Like Belgium, Finland, France, the Netherlands, and Spain, Monaco decided to put the minting date on its coins.297 This is why the first euro coins from Monaco have the year 2001 on them, instead of 2002, like the other countries of the Eurozone that decided to put the year of first circulation (2002) on their coins.[188]298 Three different designs were selected for the Monégasque coins.[189]299 The design was changed in 2006 after Prince Rainier's death to feature the effigy of Prince Albert.[189]300

Transport

Main article: Transport in Monaco

Further information: Rail transport in Monaco

One of the most important modes of local transportation is walking, and the city is expanding its pedestrian network in the 2020s to be more pedestrian friendly.301 This includes plans for a new pedestrian bridge in Fontvieille that connects to the new Wurtemberg footbridge.[190][191]302