The most developed branch of Monaco's economy and one of its main sources of income is tourism. Having very limited natural resources and a very small territory, the Monegasque have mainly developed the touristic infrastructure and the area of gaming and have managed to turn inconveniences into advantages.

Monaco has several characteristics that have conferred it an exclusivist character and made it almost synonymous to Excellency:

• the state's reputation of a solid economical and political stability;
• a beautiful location, a pleasant climate, the high-standard tourist facilities and the renowned gaming center;
• the fiscal system does not subject individuals to any tax. This attracts a considerable number of wealthy persons to becoming Monaco residents.

Economic Characteristics

• Industry is focused mainly on small, nonpolluting industries and services such as tourism, construction, real estate, pharmaceuticals, banking, insurance.
• Banking and financial services are very well represented.
• Monaco does not encourage the settlement of offshore business; the tax regime favors strictly local activities. Any business that derives more than 25% of its turnover from outside Monaco is taxed at 35% on its profits. The only exception is private banking: in order to service the growing number of wealthy individuals, banks are exempted of business profits tax when handling the local residents' assets.
• The main resource for the Principality's budget are taxes on industry, trade, services, hotels and real-estate. The state has monopolies in a number of sectors (tobacco, postal service).
• Unemployment rate is extremely low: 3.1% (in 1998).
• The annual turnover from the private sector activity is of about 9 billion euros.
• Per capita income is one of the world's highest and is more than €22,000.
• Exports and imports: Monaco has full customs integration with France, thus participating in the EU market system although not a EU member.