Monaco does not publish national income figures and is not included in UNCTAD's 2022 World Investment Report. Tourism continues to attract the bulk of foreign investment, but the impact of the Covid-19 pandemic on the sector has been significant. Real estate is another attractive sector (non-residents are estimated to account for more than half of real estate investments). Furthermore, Monaco is a renowned financial centre and has attracted many foreign banks and financial institutions over the years. In 2019, the country announced the establishment of a new Fintech hub, MonacoTech, aimed at supporting the growth of innovative startups in the financial technology sector. The main investor in the country is France.
Monaco has created a stimulating environment for foreign investors, as shown by the simplified procedures for setting up businesses in the area and the extremely low tax rates that have helped make Monaco a tax haven (only companies earning over 25% of their turnover outside the Principality are subject to a tax on profits of 25%). Moreover, Monaco has developed an efficient and supportive business environment with streamlined procedures for business setup, a highly skilled and multilingual workforce, and excellent infrastructure. The country's strategic location and strong ties to neighbouring countries also make it an attractive destination for foreign investors looking to access the European market. Monegasques and foreigners living and working in Monaco are not subject to income tax, with the exception of French citizens. Companies can benefit from various tax incentives. There are no restrictions preventing foreigners and non-residents from buying property or opening bank or brokerage accounts in Monaco. Non-residents account for more than half of all property investments. Prior approval from the Department of Economic Expansion is required before conducting any economic activity in the principality, which is well known for its security and political stability. In 2013, the Principality began to implement measures to increase tax transparency and in 2016 the EU and Monaco signed an agreement to improve the fight against tax fraud. The country introduced new measures to fight money laundering in 2018 that are in line with EU directives, with the creation of a new register of beneficial owners of companies and a register of beneficial owners of trusts. Such measures also included the creation of an internal anonymous whistle-blower system. The Principality of Monaco has not signed any bilateral fiscal agreement, except the one with France. Albeit is not a member of the European Union, the customs union with France makes Monaco subject to EU customs laws. Finally, Monaco is not ranked in the 2023 Index of Economic Freedom nor in the 2022 Corruption Perception Index.
Monaco | United States | Germany |
---|
Foreign Direct Investment | 2020 | 2021 | 2022 |
---|---|---|---|
Number of Greenfield Investments* | 4.0 | 6.0 | 7.0 |
Value of Greenfield Investments (million USD) | 32 | 30 | 51 |
Source: UNCTAD - Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
No Income tax (except for French nationals that are covered under a fiscal treaty between Monaco and France) | 0% |
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Latest Update: September 2023