Monaco Economy Facts
Finance, commerce and tourism are the main sources of income for Monaco, which has long been known as a tax and gaming paradise. The prosperity of the Principality was founded with casino operations that began in the 19th century. The low taxes attract both well-off individuals and companies to the country.
Neither income nor wealth is taxed (except for French people who pay taxes in their home country since the 1960s), and the taxes on corporate profits are low. A large number of foreign companies and banks are registered in Monaco to take advantage of this.
- Countryaah.com: Major imports by Monaco, covering a full list of top products imported by the country and trade value for each product category.
During the 1990s, the Principality’s position as a “tax haven” with far-reaching banking secrecy was increasingly questioned by the outside world. Monaco was pressured by France and the EU who wanted to make sure that Monaco’s banks were not used by criminal groups for so-called money laundering. In 2002, the economic cooperation organization OECD put Monaco and 34 other territories on a list of “tax havens” that conducted harmful tax competition. In 2005, Monaco signed an agreement with the EU that allowed the EU to obtain information on the criminal accounts of the criminals in Monaco. The EU was also given the right to levy tax on the interest rates on EU citizens’ accounts in Monaco. In 2009, Monaco was removed from the OECD’s “black list”.
But six years later, Monaco was included in a new list of tax havens, this time the European Commission. In spring 2016, the government initiated a new EU agreement in which the EU countries and Monaco would exchange information on the residents’ financial transactions.
Monaco is part of a customs and currency union with France. In March 2015, negotiations started with the EU on an association agreement. Euro is the currency of the country. Data on economic growth and other figures are not reported separately for Monaco but are included in France’s national statistics. All figures are thus based on estimates.
Today, gambling provides a smaller portion of direct government revenue, while over half comes from indirect taxes, such as VAT. Tourism also generates large incomes, as well as fees from banks and real estate and insurance companies.
- Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including MCO which represents the country of Monaco. Check findjobdescriptions to learn more about Monaco.
The favorable conditions and far-reaching banking secrecy have led to conflicts with other countries, which have seen Monaco as a tax haven that has also enabled the “laundering” of money from illegal activities.
After a recession in the early 1990s, Monaco’s economy gained momentum from 1997. Between 2001 and 2008, the economy grew by an average of 4 percent a year. The global financial crisis caused a sharp decline of over 11 percent in 2009, but growth then recovered to reach high levels by the mid-2010s. The thriving economy was based largely on rising income from the real estate and construction sectors.
FACTS – FINANCE
GDP per person
US $ 166,726 (2017)
US $ 6,401 million (2017)
-3.5 percent (2017)
The service sector’s share of GDP
81.7 percent (2016)