The Principality of Monaco is probably best known for motor racing, casinos and beautiful beaches. But increasingly Monaco is establishing itself as a progressive financial centre in the heart of Europe, offering stability at a time of change across the continent.
Monaco is the second smallest country in the world, after the Vatican, and at just over two square kilometres, it is not significantly larger than London’s Hyde Park. And yet in recent years it has become one of Europe’s major banking centres, and a significant partner in the region’s economic development. It has also sought to diversify its economic base into services and high value-added industries such as cosmetics and biothermics, with the strategic goal of creating a society that is sustainable in the long term.
Her Excellency Mrs Evelyne Genta, Monaco’s Ambassador in London since 2011, says that there is growing interest in the UK in Monaco, both as a financial centre and as a place to live and work.
In an exclusive interview with Foglets, Mrs Genta said that Monaco’s commitment to international regulation and transparency were important considerations at a time of growing international concern about tax. A significant aspect of her role as Ambassador has been to address misconceptions about Monaco’s economy.
“Monaco takes its responsibilities very seriously,” Mrs Genta told me. “It is true that residents of Monaco do not pay income tax. But all residents pay VAT on goods and services. Corporations also face a 33 per cent tax on profits.” In addition, employers and employees pay social insurance taxes.
Crucially, unlike jurisdictions labelled offshore tax havens, Monaco does not offer offshore financial services, and Monegasque law does not permit or facilitate the registration of offshore corporations looking to operate in such a way as to avoid paying tax in other jurisdictions. The Principality of Monaco has been included in the OECD’s so-called ‘white list’ of countries that abide by international tax law since 2009.
Monaco’s strict laws discourage residency in the Principality purely for tax reasons, including a requirement to spend at least six months of every year physically in the country. To become a Monaco resident, a foreign national must be able to demonstrate that he or she has sufficient funds to provide for themselves and their family. As a resident, it is possible to establish a commercial enterprise in any of Monaco’s economic sectors.
Despite these conditions, the desire to live and work in Monaco remains as strong as ever. There are some 38,000 residents in the Principality, while more than 41,000 travel from outside for work every day. Mrs Genta believes that, while tax is a concern, so too are quality of life and security. “Security plays a big part,” she said. “People feel safe as they go about their daily lives, and that really matters to them.” Location is also important, given its proximity to Nice airport, and to the Italian border.
Environmental issues have also moved high up the agenda in Monaco. Albert, Prince of Monaco, has shown a strong commitment to the environment, particularly through the Fondation Prince Albert II de Monaco, which has set the tone for environment ideals in the Principality, and is actively supported by residents. The foundation has a natural focus on conservation in the Mediterranean basin, but it also supports initiatives to combat deforestation in least developed countries.
Mrs Genta said: “We have a strong sense of community and a social conscience in Monaco. Although the Principality attracts people from all over the world, they develop a sense of pride in what Monaco represents.” She highlights the role of British residents, who make up one of the larger expatriate communities. “They always want to become involved with the community, and support clubs and initiatives wherever they can, and make such a positive contribution.”
Our interview takes place in the aftermath of the attacks in Manchester and London, and Mrs Genta offers her condolences to the families of the victims and to the communities affected by the attacks. The Ambassador, who first came to London as a child to attend the French Lycée and has resided in the capital for many years, feels a strong bond with Britain and respects our ability to overcome adversity. “I admire the British spirit, the spirit of Winston Churchill. What happened is a tragedy, but I know that people will bounce back, and be even stronger.”
