Many people wonder why the Principality of Monaco is so expensive. Property is amongst the most highly-priced in the world, but why is Monaco 7 to 8 times more costly than real estate just a few hundred meters away in nearby France? Most apartments in Monaco would cost you €35-45,000 per square meter, versus €5-6000 in nearby France!
The answer is, of course, the fact that it is a tax haven. It also happens to be tiny (less than 2 square kilometres) and so property inside Monaco is of limited supply. It is located in the ‘Cote d’Azur’ which is also one of the most desirable areas to live in southern France. If you’re in Monaco, you are spoiled with wonderful views of the Mediterranean sea and in excess of 300 days of sunshine per year.
Anyone who is not French can live in Monaco and pay zero income or capital gains tax on investments outside the Principality. For the fortunate who are affluent, renting in Monaco or buying is a small price to pay compared to the taxes they would likely incur elsewhere. For example, in the UK the top rate of income tax is 50% … however if someone is employed by their own company, the effective tax rate is more like 62.5%! Well worth considering moving offshore if it is viable.
Aside from the financial benefits for the wealthy, Monaco is also the site of large sporting events like the Monaco Grand Prix and Monte-Carlo Tennis championship. It is a popular tourist destination, many films have used Monaco as a setting, and it is considered very glamorous by many. Monaco has one of the lowest crime rates in the world and you will never see litter, graffiti or someone walking with their shirt off or drink in hand!