Economy of Monaco
The Principality of Monaco, is in Western Europe, known as the park of the Billionaires. Unlike other countries, Monaco has many particularities that make it different from the rest of the Western world. In general, Monaco is a Western European city-state surrounded by France.
Monaco is a sovereign City-State, located on the borders of France along the French Riviera in Western Europe. As such, the micro-state of Monaco is one of the smallest countries in the world with an area of 2 square kilometres. Its mother tongue is Monegasque, and the Monegasque people have never really wanted to be part of France or Italy.
It is associated with luxury, glamour and wealth, along with the perfect climate and beautiful landscapes. The relevant aspects of the study of Monaco are mainly related to the historical and political aspects of its development. Since, throughout its history and legislative changes, Monaco managed to preserve its sovereignty, not having reduced its size, the country is made up of multiple administrative entities.
A Sovereign State
From the first years of its history, Monaco functioned as an independent state with a reliable political apparatus that did not allow other countries to conquer its land. Monaco declared its sovereignty in 1861, then Monaco established the Customs and Monetary Union with France. The French military protected its sovereignty and Monaco served the interests of France.
Monaco has a robust economy, with the business and technology sector being the most progressive. As an essential reason for its economic success, the State’s tax system can be mentioned.
Monaco has no income tax, property tax or capital gains tax, so it is called a tax haven. The elimination of income tax has attracted many rich people to live in Monaco to avoid the tax already in the 19th century.
It is not by chance that this country is considered as the favorite place of billionaires. In fact, they are offered important business opportunities, a perfect climate and a luxurious infrastructure, which makes more and more people choose Monaco as a priority.
Other important features of Monaco’s Economy
The Principality has sought to successfully diversify into services and small, high value-added, non-polluting industries. The State has no income tax and corporate taxes are low, and it thrives as a tax haven for both individuals who have established their residence and foreign companies that have set up businesses and offices.
The state maintains monopolies in several sectors, including tobacco, the telephone network and the postal service. Although no official economic statistics are published, estimates place the national product at millions of dollars and per capita income at thousands of dollars, and the unemployment rate is 2%.
The standard of living is high and comparable to that of the prosperous French metropolitan areas. Monaco does not publish figures on national income, the estimates that are generally made are extremely approximate.
Economic development was boosted at the end of the 19th century with the opening of the rail link to France and a casino. Monaco’s economy is now mainly oriented towards finance, trade and tourism.
Low taxes have attracted many foreign companies to Monaco and account for about 75% of annual GDP revenue.
Monaco is known for its activity in the field of marine sciences. Its Oceanographic Museum, formerly run by Jacques-Yves Cousteau, is one of the most renowned institutions of its kind in the world. Monaco imports and exports products and services from all over the world. There is no commercial agriculture in Monaco, because it is 100% urban.