Monaco - Tax Haven for the Very Rich

A few years ago The New York Times Travel Section unloaded on the Principality of Monaco as follows:

"Monaco — the platinum-plated name evokes scenes of a sun-drenched pleasure dome where European royalty drive Ferraris, poodles sport emerald collars and Lords Such-and-Such extol the virtues of Cuban cigars in the voice of Thurston Howell III. Glimpsing the fabled Casino de Monte Carlo only hammers the image home. Under the Côte d’Azur’s stars, equally glittery couples stride into the opulent 19th-century gaming halls, and lay down small fortunes at felt-covered tables once frequented by Mata Hari, the Rothschilds, King Farouk of Egypt and other aristocratic figures."

The 1.08 square miles of Monaco on the French Riviera is home to about 33,000 people, nearly 85% of them foreigners, most very wealthy. This unique and ancient principality is not for everyone. For those who wish to make this their permanent home, it helps to have a great deal of money and an assured income for life.

And it doesn’t hurt to know H.S.H. Prince Albert II and the members of his royal family, (not counting his illegitimate offspring).

Tax Haven Extraordinaire

A major reason we recommend Monaco, (for those who can afford it), is because it is a true tax haven for the exceedingly wealthy – and great wealth is what it takes to afford living here. It’s home to many millionaires and billionaires from around the world, many of them retired and enjoying the good life.

Aside from beautiful weather and a spectacular view of the Mediterranean, undeniably, there are tax benefits to be gained from living in Monaco.

The authorities do not like the Principality to be known as the "tax haven" that in fact it is. Since 1869 there have been no income taxes for Monegasque nationals and resident foreigners, one of the main attractions for high net worth individuals. There are no direct, withholding or capital gains taxes for foreign nationals, (except for the French, who because of a bilateral tax treaty with Paris, cannot escape the clutches of the French tax system).

Land Ho!

But one of the problems in Monaco has been the lack of real estate in this second smallest country in the world. Property prices rival those in New York and London, with small studio apartments selling in excess of a million euros (US$1.4 million).

That is about to change with a planned expansion of new terra firma to be carved out of the sea with landfill. It's all part of an ambitious project Monaco is undertaking to extend the size of its land and improve the amount of real property available, including new housing, a museum and schools on a new island which is rumored to be called "Princess Grace Island."

It to be named for the late Oscar-winning American actress, the former Grace Kelley of Philadelphia, who married the late Prince Rainier and helped to put Monaco on the world map. The current ruler is their son, Prince Albert II.

It's predicted that the landfill project, due to be completed in 2014, will add approximately 10 hectares (25.5 acres) of land, or the equivalent of about 13 football stadiums.

The plan is to increase available housing by at least 10% which will mean room for at least another 3,000 people, a population increase of 10%. New hotels are planned to attract the ultra rich tourists that love to frequent Monaco, mooring their yachts in the harbor and handing off their Aston Martins to a valet at the Monte Carlo casino.

* The Sovereign Society can provide our members with real estate and other professional contacts in Monaco upon request. I also have a chapter on Monaco in both my books, my latest version of The Passport Book, or explore legal tax-saving possibilities offshore in one of my best-selling books, Where to Stash Your Cash Legally: Tax Havens of the World.