Not just a lifestyle, but an exceptional investment, a lucky few experience it close-up…
The population of Monaco, the world’s smallest state after the Vatican, represents less than that of many average sized unknown towns around the globe, and there have been record numbers of new residents for the past two years.
So why is Monaco so legendary? The name itself awakens thoughts of glitz, glamour, elegance and riches. But that’s just the appearance.
The allure of this Principality nestled on the Mediterranean coast- is that it’s an independent state with a long history. However it is also assumed to be an integral part of the French Riviera. Thereafter we will outline just what makes Monaco so special and why it attracts countless stars from the worlds of sport, music, cinema, science and enterprise. In addition to its surface area (less than 2 km2), Monaco is famous for its numerous advantages for investors.
In addition to political stability, Monaco offers a stable economic environment. The security of the real estate market and the possibility of personalizing one’s investment, make the Principality of Monaco an ideal place to invest in.
Monaco Major Fiscal Advantages
The main principle of Monaco’s fiscal system is the total absence of direct taxation on persons or on companies. The Principality’s main source of income is value added tax (VAT in Monaco is 20% as in most European countries), which is paid on goods and services in the usual way. The main attribute of Monaco’s fiscal policies is the total absence of direct taxation for Monegasque residents as there is no income tax, capital gains tax or wealth tax.
In other words, there is no property tax, no tax on housing, no inheritance tax and no gift tax.
Investing in Monaco can be financially rewarding, as there is no income tax or capital gains tax on individuals residing in the Principality.
In addition, there is no Monegasque estate duty on assets situated outside the Principality. The Monegasque property prices were not significantly affected by the global crisis: hence a safe market. A Monegasque real estate investment could play an interesting role regarding risk reduction. An investor wishing to allocate funds in a low-risk asset could eventually include a Monegasque property in his or her international portfolio.
Banking and Financial Sector in Monaco
Monaco is recognized for its wealth management and advice services, which support affluent residents and non-resident clients. The Principality is renowned for having a very solid and broad offering of banks in all categories, whether for investment, business or regular private use. The development of the Monegasque financial market is characterized by the increasing internationalisation of its actors respecting high professional standards. Financial professionals settling in Monaco are required to have a certified level of knowledge. With 37 banks, and more than 42 portfolio and mutual fund management companies, the banking sector constitutes a large part of Monaco’s financial activity. Bank confidentiality is one of the main principles of Monegasque banking.
A law of July 1997 guarantees protection of savers and investors. It regulates the management, transmission and advisory activity of stocks and forward financial instruments. It is one of the key reasons why international financial institutions have established themselves in Monaco to develop activities of financial management and investments. This development nevertheless takes place in a context of great security.
Confidentiality of Information collected by Banks and Portfolio Management Companies
Bank managers and employees operating in the Principality are bound by strict rules of professional secrecy. This commitment is designed to protect customers’ interests and create the confidence required for the banking sector to operate effectively. In their relationships with depositors and borrowers, banks obtain extensive information on customers’ financial status, business affairs and private lives. They have a duty to preserve the confidentiality of all information concerning transactions—notably investment activities—and accounts (existence, balances, etc.). The same rules apply to portfolio management firms.