Economy of Monaco
Encyclopedia
This is an overview of the economy of Monaco
. Monaco, situated on the French coast of the Mediterranean Sea
, is a popular resort, attracting tourists to its casino and pleasant climate.
The Principality
has successfully sought to diversify into services and small, high-value-added, nonpolluting industries. The state has no income tax
and low business taxes and thrives as a tax haven
both for individuals who have established residence and for foreign companies that have set up businesses and offices. The state retains monopolies
in a number of sectors, including tobacco, the telephone network, and the postal service.
Living standards are high and roughly comparable to those in prosperous French metropolitan areas. In recent years living standards have gone up and are about twice as high as French metropolitan areas like Nice
. Monaco does not publish national income figures; the estimates below are extremely rough.
Economic development was spurred in the late 19th century with the opening of the rail link to France and a casino
. Monaco's economy is now primarily geared toward finance, commerce, and tourism. Low taxes have drawn many foreign companies to Monaco and account for around 75% of the $6.581 billion annual GDP income in (2011). Similarly, tourism accounts for close to 15% of the annual revenue, as the Principality of Monaco also has been a major centre for tourism ever since the famed casino was established in 1856. The casino is alluded to in the ABBA
song Money, Money, Money
.
Customs, postal services, telecommunications, and banking in Monaco are governed by an economic and customs union with France. Before the Euro, Monaco used the French franc
. Now part of the Eurozone
, but not the EU, Monaco mints its own Euro coins.
Though official economic statistics are not published, year 2011 estimates place the national product at $6.888 billion and the world's highest per capita income is $186,175. The unemployment rate is 0%, as of 2011.https://www.cia.gov/library/publications/the-world-factbook/geos/mn.html
Monaco is noted for its activity in the field of marine sciences. Its Oceanographic Museum
, formerly directed 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 due to being 100% urban.
Monaco levies no income tax on individuals. The absence of a personal income tax in the principality has attracted to it a considerable number of wealthy "tax refugee" residents from European countries who derive the majority of their income from activity outside Monaco; celebrities such as Formula One drivers attract most of the attention, but the vast majority of them are less well-known business people.
In 2000, a report by the French parliamentarians, Arnaud Montebourg and Vincent Peillon, alleged that Monaco had lax policies with respect to money laundering, including within its famed casino, and that the government of Monaco had been placing political pressure on the judiciary, so that alleged crimes were not being properly investigated.
In 1998, the Organisation for Economic Co-operation and Development (OECD) issued a first report on the consequences of the tax havens' financial systems. Monaco did not appear in the list of these territories until 2004, when OECD became indignant regarding the Monegasque situation and denounced it in its last report, as well as Andorra, Liechtenstein, Liberia and the Marshall Islands, underlining its lack of co-operation as regards to financial information disclosure and availability.
In 2000, the Financial Action Task Force on Money Laundering (FATF) stated: "The anti-money laundering system in Monaco is comprehensive. However, difficulties have been encountered with Monaco by countries in international investigations on serious crimes that appear to be linked also with tax matters. In addition, the FIU of Monaco (SICCFIN) suffers a great lack of adequate resources. The authorities of Monaco have stated that they will provide additional resources to SICCFIN." The Principality is no longer blamed in the 2005 FATF report, as well as all other territories. However, since 2003, the International Monetary Fund (IMF) has identified Monaco, along with 36 other territories, as a tax haven.
The Council of Europe also decided to issue reports naming tax havens. Twenty-two territories, including Monaco, were thus evaluated between 1998 and 2000 on a first round. Monaco is the only territory that refuses to perform the second round, initially forecast between 2001 and 2003, whereas the 21 other territories are implementing the third and last round, planned between 2005 and 2007.
Monaco
Monaco , officially the Principality of Monaco , is a sovereign city state on the French Riviera. It is bordered on three sides by its neighbour, France, and its centre is about from Italy. Its area is with a population of 35,986 as of 2011 and is the most densely populated country in the...
. Monaco, situated on the French coast of the Mediterranean Sea
Mediterranean Sea
The Mediterranean Sea is a sea connected to the Atlantic Ocean surrounded by the Mediterranean region and almost completely enclosed by land: on the north by Anatolia and Europe, on the south by North Africa, and on the east by the Levant...
, is a popular resort, attracting tourists to its casino and pleasant climate.
The Principality
Principality
A principality is a monarchical feudatory or sovereign state, ruled or reigned over by a monarch with the title of prince or princess, or by a monarch with another title within the generic use of the term prince....
has successfully sought to diversify into services and small, high-value-added, nonpolluting industries. The state has no income tax
Income tax
An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
and low business taxes and thrives as a tax haven
Tax haven
A tax haven is a state or a country or territory where certain taxes are levied at a low rate or not at all while offering due process, good governance and a low corruption rate....
both for individuals who have established residence and for foreign companies that have set up businesses and offices. The state retains monopolies
Monopoly
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
in a number of sectors, including tobacco, the telephone network, and the postal service.
Living standards are high and roughly comparable to those in prosperous French metropolitan areas. In recent years living standards have gone up and are about twice as high as French metropolitan areas like Nice
Nice
Nice is the fifth most populous city in France, after Paris, Marseille, Lyon and Toulouse, with a population of 348,721 within its administrative limits on a land area of . The urban area of Nice extends beyond the administrative city limits with a population of more than 955,000 on an area of...
. Monaco does not publish national income figures; the estimates below are extremely rough.
Economic development was spurred in the late 19th century with the opening of the rail link to France and a casino
Monte Carlo Casino
The Monte Carlo Casino is a gambling and entertainment complex located in Monte Carlo, Monaco. It includes a casino, the Grand Théâtre de Monte Carlo, and the office of Les Ballets de Monte Carlo....
. Monaco's economy is now primarily geared toward finance, commerce, and tourism. Low taxes have drawn many foreign companies to Monaco and account for around 75% of the $6.581 billion annual GDP income in (2011). Similarly, tourism accounts for close to 15% of the annual revenue, as the Principality of Monaco also has been a major centre for tourism ever since the famed casino was established in 1856. The casino is alluded to in the ABBA
ABBA
ABBA was a Swedish pop group formed in Stockholm in 1970 which consisted of Anni-Frid Lyngstad, Björn Ulvaeus, Benny Andersson and Agnetha Fältskog...
song Money, Money, Money
Money, Money, Money
"Money, Money, Money", originally "Gypsy Girl", is a song recorded by Swedish pop group ABBA. The song, like most ABBA songs, was written by Benny Andersson and Björn Ulvaeus. It was released as a single on November 1, 1976, as the follow-up single to "Dancing Queen, both from the album Arrival...
.
Customs, postal services, telecommunications, and banking in Monaco are governed by an economic and customs union with France. Before the Euro, Monaco used the French franc
French franc
The franc was a currency of France. Along with the Spanish peseta, it was also a de facto currency used in Andorra . Between 1360 and 1641, it was the name of coins worth 1 livre tournois and it remained in common parlance as a term for this amount of money...
. Now part of the Eurozone
Eurozone
The eurozone , officially called the euro area, is an economic and monetary union of seventeen European Union member states that have adopted the euro as their common currency and sole legal tender...
, but not the EU, Monaco mints its own Euro coins.
Though official economic statistics are not published, year 2011 estimates place the national product at $6.888 billion and the world's highest per capita income is $186,175. The unemployment rate is 0%, as of 2011.https://www.cia.gov/library/publications/the-world-factbook/geos/mn.html
Monaco is noted for its activity in the field of marine sciences. Its Oceanographic Museum
Oceanographic Museum
The Oceanographic Museum is a museum of marine sciences in Monaco-Ville, Monaco.- History :The Oceanographic Museum was inaugurated in 1910 by Monaco's modernist reformer, Prince Albert I. This monumental architectural work of art has an impressive façade above the sea, towering over the sheer...
, formerly directed by Jacques-Yves Cousteau
Jacques-Yves Cousteau
Jacques-Yves Cousteau was a French naval officer, explorer, ecologist, filmmaker, innovator, scientist, photographer, author and researcher who studied the sea and all forms of life in water...
, 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 due to being 100% urban.
Monaco levies no income tax on individuals. The absence of a personal income tax in the principality has attracted to it a considerable number of wealthy "tax refugee" residents from European countries who derive the majority of their income from activity outside Monaco; celebrities such as Formula One drivers attract most of the attention, but the vast majority of them are less well-known business people.
In 2000, a report by the French parliamentarians, Arnaud Montebourg and Vincent Peillon, alleged that Monaco had lax policies with respect to money laundering, including within its famed casino, and that the government of Monaco had been placing political pressure on the judiciary, so that alleged crimes were not being properly investigated.
In 1998, the Organisation for Economic Co-operation and Development (OECD) issued a first report on the consequences of the tax havens' financial systems. Monaco did not appear in the list of these territories until 2004, when OECD became indignant regarding the Monegasque situation and denounced it in its last report, as well as Andorra, Liechtenstein, Liberia and the Marshall Islands, underlining its lack of co-operation as regards to financial information disclosure and availability.
In 2000, the Financial Action Task Force on Money Laundering (FATF) stated: "The anti-money laundering system in Monaco is comprehensive. However, difficulties have been encountered with Monaco by countries in international investigations on serious crimes that appear to be linked also with tax matters. In addition, the FIU of Monaco (SICCFIN) suffers a great lack of adequate resources. The authorities of Monaco have stated that they will provide additional resources to SICCFIN." The Principality is no longer blamed in the 2005 FATF report, as well as all other territories. However, since 2003, the International Monetary Fund (IMF) has identified Monaco, along with 36 other territories, as a tax haven.
The Council of Europe also decided to issue reports naming tax havens. Twenty-two territories, including Monaco, were thus evaluated between 1998 and 2000 on a first round. Monaco is the only territory that refuses to perform the second round, initially forecast between 2001 and 2003, whereas the 21 other territories are implementing the third and last round, planned between 2005 and 2007.