Monaco in a Nutshell
Date: 03/10/2006
In 1870, Monaco abolished all forms of personal income tax, and lived off casino revenues. Not today, though.
International Living Postcards--your daily escape
Friday, March 10, 2006
Monte Carlo, Monaco
Dear International Living Reader,
The Principality of Monaco is the world's second smallest sovereign state with a landmass of just 1.2 square miles--only the Vatican is smaller. It borders the Mediterranean Sea on the southern coast of France, near the border with Italy, and currently has some 32,000 residents.
Only 6,000 hold a Monagesque passport; all others are expat workers and rich tax exiles.
The country did away with all forms of personal income tax in 1870 and for decades solely lived off casino revenues. After decade-long efforts to diversify the economy, the casino now accounts for only 5% of local revenues.
Monaco has established itself as a busy tourist and conference hub. There is a thriving financial services industry, and the country has even attracted small manufacturing companies (including cosmetics, aeronautics, and automobile parts).
Former head of state Prince Rainier III signed a bi-lateral agreement with neighboring France in October 2002, which secured the country's long-term survival (previously, France would have been able to claim ownership if there were not a male heir to the throne).
The tiny nation is an accident of history, but after more than 700 years of uninterrupted rule by the Grimaldi Clan, seems destined to continue.
Sven Lorenz
For International Living
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