Monaco, the world’s second-smallest independent nation after the Vatican, is found in the continent of Europe specifically in the western region on the French Riviera. Monaco is not only a haven for the rich but also a favorite destination for tourists owing to its serene beauty, pleasant climate, and tax regime that is favorable to both the locals and the foreigners. Residents of the principality of Monaco do not pay income tax, capital gain tax, or wealth tax. The principality of Monaco is a major banking center and the privacy of its clients is closely guarded. Even though the principality is not a member of the European Economic Area or the EU, it maintains custom union and open borders with the French Republic. Monaco is thus treated as part of the Schengen Area. The Monegasque and French authorities both carry out checks at Monaco’s heliport and seaport. One can obtain a souvenir passport stamp at the national tourist office.
Geography and Population
The principality of Monaco covers an area of 0.78 square miles with an estimated population of about 38,400, making it the world’s most densely populated sovereign nations. On three sides, Monaco is surrounded by France while the Mediterranean Sea surrounds the remaining part. French is the country’s official language while Christianity is the dominant religion and Roman Catholicism being the dominant faith. However, the English, Italian and Monegasque languages are also widely spoken. The major ethnic groups include the Monegasques, Italians, French, and the Occitans.
Monaco’s economic development was propelled by the opening of Monte Carlo which was the first casino to be opened in the principality, as well as the railway connection to Paris, France. Ever since, the country’s gambling facilities, mild climate, and beautiful scenery have contributed to the region’s status as a recreation center and a tourist destination for the wealthy. Similarly, Monaco has grown into a significant banking center which has sought to grow its economy in other sectors such as the service sector as well as small non-pollutant industries that are high-value-added. Monaco has low business taxes and no income tax making it a popular tax haven. The country also hosts the Monaco Grand Prix which is a street circuit motor race that takes place every year and happens to be one of Formula One’s original Grand Prix.
Monaco is a constitutional monarchy whose head of state is Prince Albert; he took over the leadership of Monaco in 2005 after the death of his father Prince Rainier. The Prince possesses substantial political power, and since 1927, Monaco has been ruled by the House of Grimaldi but with a few interruptions over the years. Monaco’s sovereignty was officially recognized in 1861 by the Franco-Monegasque’s Treaty before becoming a full voting member of the UN in 1993. Even though the country is independent and has a separate foreign policy, the French Republic is still responsible for its defense, with Monaco maintaining only two small military units. Even though the country is not officially part of the EU, it takes part in a number of its policies such as the border and customs control. Because of Monaco’s relationship with the French Republic, the sole currency used in the country is the Euro. Initially, Monaco’s official currency was the Monegasque franc. In 2004, the Principality of Monaco became a member of the Council of Europe. It is also a member state of the OIF or the Organization Internationale de la Francophonie.