Part II · Jurisdictions · No. 13

Monaco

The smallest sovereign state in Europe after Vatican City. No personal income tax for residents who are not French nationals. No wealth tax. Limited inheritance tax. Mediterranean port and the densest concentration of high-net-worth-per-square-kilometer in the world.

Why this jurisdiction matters

Monaco's appeal is principally fiscal residence — non-French nationals resident in Monaco pay no personal income tax (direct taxes having been abolished by the Sovereign Ordinance of 8 February 1869), no wealth tax, and no capital-gains tax. The Principality combines fiscal autonomy with the convenience of EU and French connectivity (Monaco is part of the EU customs territory through its customs union with France and uses the euro under a monetary agreement with the EU, though it is not an EU member).

The relevant tax regime

• No personal income tax for non-French-national residents (under the 1963 Franco-Monegasque tax convention, French nationals resident in Monaco are taxed by France as if resident there, subject to narrow grandfathering).
• No wealth tax.
• No capital-gains tax on individual investment gains.
• Inheritance and gift tax on Monaco-situs assets, graduated by relationship: 0% in the direct line and between spouses; 8% between siblings; 10% between uncles/aunts and nephews/nieces; 13% between other relatives; 16% between unrelated persons.
• VAT. French VAT regime applied via 1963 fiscal convention; 20% standard.
• Property transfer duties of about 4.5% on typical purchases by individuals, and up to 7.5% in some cases (e.g. certain company acquisitions), plus notarial fees.
• Business profits tax (ISB). 25% for businesses that derive more than 25% of turnover from outside Monaco, and for certain royalty-earning businesses.

Registration or residency mechanics

Monaco residency requires a residence permit (carte de séjour) granted on demonstration of suitable accommodation (owned or long-term rental), sufficient financial means (in practice usually shown by a letter from a Monaco bank; there is no statutory minimum deposit, but banks commonly expect substantial deposits), a clean criminal record, and actual residence in Monaco. Renewal requires showing continuing residence, generally understood as living in Monaco at least three months a year.

Reporting and disclosure

CRS participant. Monaco has no FATCA intergovernmental agreement with the U.S. (it does not appear on the Treasury list of IGA jurisdictions), so Monaco financial institutions deal with FATCA under the U.S. regulations directly. Beneficial-ownership register for companies and other legal entities. Monaco was placed on the FATF “grey list” in June 2024 and on the EU list of high-risk third countries (in effect from August 2025). In June 2026 the FATF found its action plan substantially completed, pending an on-site visit. Monaco remained listed as of October 2026.

The substance question

Tax-treaty residence of Monaco residents is limited; the Principality's treaty network is narrow. The "presence and activity" criteria for residency renewal are increasingly scrutinized; absence over defined thresholds can result in non-renewal.

Recent changes

FATF grey-listing (June 2024) and EU high-risk listing (2025) have driven a series of AML/CFT reforms and heightened due diligence by counterparties in EU states. Delisting is possible after the FATF on-site visit; check the current FATF and EU lists. Status as of October 2026.

Common asset classes parked here

• Yachts — Port Hercule and Port Fontvieille are major Mediterranean superyacht moorings.
• Trophy real estate — Monaco real estate per-square-meter cost is among the world's highest.
• HNW individual residency.
• Exotic cars — concentrated collector market.

Reviewed October 2026