Why move to Monaco?
Besides the weather, safety and prime European location, mostly for tax reasons!
What are the tax benefits of Monaco residency?
No income tax (including on dividends), besides for citizens of France (explained further below). This is not a recent policy, it has been in place in 1869. The French citizen tax exception was added in 1963, after the blockade of Monaco by Charles de Gaulle in 1962. You can find out more about the tax system in Monaco by visiting this official government website.
There are also no taxes on capital gains.
This does not mean that other countries will not tax your income or capital gains, but residents of Monaco do not have to pay any Monegasque taxes on their income or capital gains.
There are also no annual property or local government taxes.
There is also no inheritance or gifts tax on worldwide assets, besides for assets in Monaco. Also, gifts and inheritance to children and spouses are exempt from tax, even on assets based in Monaco. You can see the rules here. However, other countries, such as France, may also impose inheritance taxes on the inheritors who are resident in their country.
What other taxes are there?
There is a 1% registration fee “duty” applied to rental income plus charges for real estate. There is also a 4.5% fee on property purchases in Monaco, which can raise to 7.5% if you purchase via a corporate structure. You can read more about Monaco’s registration fees here. These are similar to the transaction costs of purchasing a property in France, which are normally between 8 and 10% of the property price.
There is also a sales tax, or VAT (TVA in French). The VAT rules in Monaco are the same as for France and the standard rate is 20%. This is also applied to new-build properties.
There is also corporation tax. It is applied to the following companies:
- Companies where at least 25% of the turnover is generated outside Monaco
- Companies whose income relates to the sale or licensing of patents, trademarks, processes or formulas and to the royalties from intellectual property rights
The rate is 25% since January 2022. More business profits tax rules can be viewed here.
The inheritance tax for assets based in Monaco ranges from 0 to 16%.
There are also import duties as Monaco is in a customs union with France but this also allows Monaco to benefit from the EU’s customs union.
What is the situation for citizens of France?
French citizens who are resident in Monaco have to pay French taxes for their first five years of residency, this includes on their income, capital gains and they are often subject to the French property wealth tax.
French citizens are basically considered to be tax resident of France for their first five years of residence in Monaco.
But what is the cost of living?
The main cost of living in Monaco is the property prices. Prices are often around 50,000 euros per square meter, so a relatively small apartment of 50 square meters costs approximately 2.5 million euros. Properties as small as 25 square meters are available and on the other end of the spectrum, there are many properties for tens of millions of euros. If you are interested in purchasing a property in Monaco, feel free to contact us here.
Rental prices start at approximately 2,000 euros per month but you may also have to deposit €500,000 in a bank in Monaco in order to obtain a residency permit.
How to obtain residency in Monaco?
The main conditions to become a tax resident of Monaco are to secure somewhere to live either by renting or purchasing a property and then you have two main options:
- Deposit approximately €500,000 at a bank in Monaco (but many private banks do not accept less than €1,000,000).
- Provide proof of a work contract for a job based in Monaco. This is possible if you do not have €500,000 to place with a bank in Monaco.
How can Aisa International France help me?
We can introduce you to private banks and lawyers in France and Monaco to help make your move a reality. As regulated investment advisers, we can also invest funds on your behalf. Feel free to contact us for a financial review.
The views expressed in this article are not to be construed as personal advice. Therefore, you should contact a qualified, and ideally, regulated adviser in order to obtain up-to-date personal advice with regard to your own personal circumstances. Consequently, if you do not, then you are acting under your own authority and deemed “execution only”. Additionally, the author does not accept any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Importantly, this article is dated and is based on legislation as of the date. It should be noted that legislation changes, but articles are rarely updated. Sometimes a new article is written; so, please check for later articles. Additionally, check for changes in legislation on official government websites. Finally, this article should not be relied on in isolation.
