'East Germany with sunshine and millionaires' - France's special neighbour Monaco explained
Known for its high proportion of wealthy residents and favourable tax system, The Local looks at Monaco's special status.
Along the Riviera - less than a 30 minute drive from Nice - lies Monaco, the coastal micro-state of 2.02 km squared home to 36,682 people which borders only France.
When thinking of Monaco, one might imagine the Monte Carlo Casino or a beautiful coastal resort with superyachts moored in the marinas.
Others associate the principality with its tax system - which does not levy any income taxes on residents - or the incredible concentration of millionaires in the principality (which just might be connected to the tax regime).
The Local's politics expert John Lichfield said: "It's like East Germany with millionaires and sunshine - it's a very oppressive place."
You can listen to John and the team at The Local discuss Monaco in the latest episode of Talking France either on Spotify, Apple or Google podcasts. Download it here or click on the link below
"It's a very oppressive place to go to if you're not very rich or a resident there. There are all kinds of petty regulations about what you can and cannot do. A whole atmosphere of oppression, no free press," John said, referring to the law prohibiting any denouncing of the ruling family and a lack of daily newspapers.
"And yet here it is - essentially part of France in many ways. It is within France geographically, and it's run by French civil servants under a deal made with De Gaulle in the 1960s.
"It has a royal family that amuses the Daily Mail and other tabloid papers and magazines, but is not taken seriously by other royal families in Europe.
"The present Prince Albert II has made efforts to clean up the act of Monaco, but it remains a place where a lot of corrupt money is able to survive without much attempt to clamp down on it."
A 'special relationship' with France
To those living in France, the tiny state can seem like a bit of a contradiction: sovereign and independent from France, yet dependent on the nation for its military protection and sharing a long history of close economic and cultural ties.
Monaco also has its own constitution and institutions - including a monarchy - as well as its own legal system, though it is modelled after France's Napoleonic code.
Yet Monaco is very different from France, as a constitutional monarchy it has been ruled by the Grimaldi family for generations, aside from a brief period during the French revolution when they were deposed.
READ MORE: The tiny island that is Spanish for half the year, and French the other half
Some of that has changed in recent years. Previous tradition dictated that the prime minister had to be both a French citizen and appointed by France.
However, in 2002 a revision to Monaco's constitution allowed for the minister to either be French or Monégasque and to be appointed by the monarch.
While the principality's official language is French, Italian and English are also commonly spoken. Historically, the Monégasque people (those from Monaco) have spoken Monégasque, a variety of Ligurian (an Italian dialect). While the language is taught in public schools, recent estimates show only a few dozen native speakers left.
Even though the micro-state is not technically part of the EU, it uses the euro as currency and is a de facto part of the Schengen zone, with no border checks between France and Monaco, thanks to the special relationship between the two nations.
When it comes to sport, the AS Monaco professional football club is a member of the French Football Federation and competes in the French Ligue 1.
Monaco is home to one railway station, but France's national rail service, SNCF, operates the rail services in the country.
A tax haven?
One of the first things that pops into most people's mind when talking about Monaco is its tax arrangements.
Overall, Monaco is a very wealthy nation, with over 30 percent of the population considered to be millionaires.
Many still view the country as a tax haven, including Oxfam (PDF), but in 2009 the OECD removed the country from its list of 'uncooperative tax havens' after Monaco agreed to higher transparency and information sharing standards.
The Council of the European Union also whitelisted Monaco in 2017 for tax purposes.
However, Moneyval (a Council of Europe body tasked with analysing anti-money laundering efforts) found several ‘deficiencies’ and ‘weaknesses’ in its 2022 report, so there’s a chance the country could end up back on the ‘grey list’ again in 2024, according to Euroval.
When it comes to taxation though, one can see why it's attractive to the super-rich - residents do not pay income tax, there is no capital gains tax, nor are there property taxes (though tax is levied on rentals and when a property is sold).
However, French nationals cannot simply cross over to Monaco to avoid income tax - thanks to former president Charles de Gaulle, French residents in Monaco must still pay income taxes to the French government.
Nevertheless, wealthy French people may still benefit from moving to Monaco as they avoid paying French social security contributions and France's wealth tax, according to French business newspaper Les Echos.
Similarly, it can be advantageous to be a business owner in Monaco. Only companies carrying out more than a 25 percent of their turnover outside of Monaco are subject to the corporation tax, and new start-ups benefit from a two-year corporation tax break.
As for Monaco's economy, the micro-state is "fully integrated into a customs union with France", allowing it to participate in the EU market.
How does Monaco's education system work?
The city-state has only 10 public schools and two private religious schools that are under contract with the state.
The school system may be technically independent from France and considered to be a 'foreign establishment', but Monaco's state schools are still linked to the local education authority in Nice.
Pupils in Monaco take French national exams, like the Brévet and the Baccalaureate, though some of the curriculum differs from France.
Unlike its larger neighbour, Monaco does not operate under the same system of laïcité, and there is religious instruction (subject to parental approval).
Monégasque law protects the freedom of religion, but the country does have a state religion (Catholicism), unlike France which is secular.
Children are taught English from the age of three in Monaco, in contrast with France where formal tuition in foreign languages starts later.
The principality's public schools also teach the history of Monaco, as well as compulsory Monégaseque language courses.
Public school holidays also bear similarity to France, with an autumn, Christmas and winter break, but there are some differences - for instance, schoolchildren in Monaco get time off for the Formula 1 Grand Prix (this year running from May 22nd to May 27th).
How does healthcare work in Monaco?
The principality has state-funded 'Monégasque Social Security system', which functions similarly to France's own Assurance Maladie and is available to anyone working in Monaco.
Generally, both Italian and French citizens covered by their state plans can access basic healthcare in Monaco, though other EU nationals who hold a CESS card are not covered.
Those living in the Alpes-Maritimes département, which borders Monaco, can access care in the principality simply by presenting their carte vitale.
The process is slightly different for those covered by French sécurité sociale that live in other parts of the country, as you may need an 'autorisation' from your local CPAM for a planned hospitalisation.
There is one public hospital in Monaco, the Centre hospitalier Princesse-Grace, but in the past, serious cases have been transferred to the Nice University hospital, particularly during the Covid-19 pandemic.
What about military and police?
Monaco is one of the world's most policed countries (per capita), with over 500 officers for a population just over 36,000 people.
The principality has its own civil police department, which falls under its interior ministry, and mostly focuses on maintaining public order. There are several units, including a division for marine and airport, urban policing, administrative policing and criminal investigations.
As for Monaco's international defence - it is the responsibility of France, though it does have a small military made up of the 'Compagnie des Carabiniers du Prince' (mostly tasked with protecting the palace) and the Corps des Sapeurs-pompiers de Monaco (Fire and Emergency).
Monaco does have bilateral extradition agreements with France, so if a Frenchman commits a crime in the principality they likely won't get off scot-free.
Can any French residents move Monaco?
Anyone wanting to live in Monaco for more than three months must apply for a resident permit from the Monégasque authorities. No matter what your situation, you will need to show proof of adequate funds, housing, and your 'good character' (ie a background check).
However, the process after that is a bit easier for citizens of the EU or European Economic Area (EEA) - they need to show a valid ID or passport.
As for non-EU residents of France, if you have been living in France for more than one year, then you can submit a request to transfer your residence from France to Monaco. You can find more information on the Monaco government website Mon Service Public.
Non-EU nationals who want to move directly to Monaco must request a visa first from the French embassy or consulate in your country of residence, and then they will send you on to Monégasque authorities.
Monaco does have embassies and consulates in other countries, but immigration paperwork is first processed via the French authorities. More information available here.
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Along the Riviera - less than a 30 minute drive from Nice - lies Monaco, the coastal micro-state of 2.02 km squared home to 36,682 people which borders only France.
When thinking of Monaco, one might imagine the Monte Carlo Casino or a beautiful coastal resort with superyachts moored in the marinas.
Others associate the principality with its tax system - which does not levy any income taxes on residents - or the incredible concentration of millionaires in the principality (which just might be connected to the tax regime).
The Local's politics expert John Lichfield said: "It's like East Germany with millionaires and sunshine - it's a very oppressive place."
You can listen to John and the team at The Local discuss Monaco in the latest episode of Talking France either on Spotify, Apple or Google podcasts. Download it here or click on the link below
"It's a very oppressive place to go to if you're not very rich or a resident there. There are all kinds of petty regulations about what you can and cannot do. A whole atmosphere of oppression, no free press," John said, referring to the law prohibiting any denouncing of the ruling family and a lack of daily newspapers.
"And yet here it is - essentially part of France in many ways. It is within France geographically, and it's run by French civil servants under a deal made with De Gaulle in the 1960s.
"It has a royal family that amuses the Daily Mail and other tabloid papers and magazines, but is not taken seriously by other royal families in Europe.
"The present Prince Albert II has made efforts to clean up the act of Monaco, but it remains a place where a lot of corrupt money is able to survive without much attempt to clamp down on it."
A 'special relationship' with France
To those living in France, the tiny state can seem like a bit of a contradiction: sovereign and independent from France, yet dependent on the nation for its military protection and sharing a long history of close economic and cultural ties.
Monaco also has its own constitution and institutions - including a monarchy - as well as its own legal system, though it is modelled after France's Napoleonic code.
Yet Monaco is very different from France, as a constitutional monarchy it has been ruled by the Grimaldi family for generations, aside from a brief period during the French revolution when they were deposed.
READ MORE: The tiny island that is Spanish for half the year, and French the other half
Some of that has changed in recent years. Previous tradition dictated that the prime minister had to be both a French citizen and appointed by France.
However, in 2002 a revision to Monaco's constitution allowed for the minister to either be French or Monégasque and to be appointed by the monarch.
While the principality's official language is French, Italian and English are also commonly spoken. Historically, the Monégasque people (those from Monaco) have spoken Monégasque, a variety of Ligurian (an Italian dialect). While the language is taught in public schools, recent estimates show only a few dozen native speakers left.
Even though the micro-state is not technically part of the EU, it uses the euro as currency and is a de facto part of the Schengen zone, with no border checks between France and Monaco, thanks to the special relationship between the two nations.
When it comes to sport, the AS Monaco professional football club is a member of the French Football Federation and competes in the French Ligue 1.
Monaco is home to one railway station, but France's national rail service, SNCF, operates the rail services in the country.
A tax haven?
One of the first things that pops into most people's mind when talking about Monaco is its tax arrangements.
Overall, Monaco is a very wealthy nation, with over 30 percent of the population considered to be millionaires.
Many still view the country as a tax haven, including Oxfam (PDF), but in 2009 the OECD removed the country from its list of 'uncooperative tax havens' after Monaco agreed to higher transparency and information sharing standards.
The Council of the European Union also whitelisted Monaco in 2017 for tax purposes.
However, Moneyval (a Council of Europe body tasked with analysing anti-money laundering efforts) found several ‘deficiencies’ and ‘weaknesses’ in its 2022 report, so there’s a chance the country could end up back on the ‘grey list’ again in 2024, according to Euroval.
When it comes to taxation though, one can see why it's attractive to the super-rich - residents do not pay income tax, there is no capital gains tax, nor are there property taxes (though tax is levied on rentals and when a property is sold).
However, French nationals cannot simply cross over to Monaco to avoid income tax - thanks to former president Charles de Gaulle, French residents in Monaco must still pay income taxes to the French government.
Nevertheless, wealthy French people may still benefit from moving to Monaco as they avoid paying French social security contributions and France's wealth tax, according to French business newspaper Les Echos.
Similarly, it can be advantageous to be a business owner in Monaco. Only companies carrying out more than a 25 percent of their turnover outside of Monaco are subject to the corporation tax, and new start-ups benefit from a two-year corporation tax break.
As for Monaco's economy, the micro-state is "fully integrated into a customs union with France", allowing it to participate in the EU market.
How does Monaco's education system work?
The city-state has only 10 public schools and two private religious schools that are under contract with the state.
The school system may be technically independent from France and considered to be a 'foreign establishment', but Monaco's state schools are still linked to the local education authority in Nice.
Pupils in Monaco take French national exams, like the Brévet and the Baccalaureate, though some of the curriculum differs from France.
Unlike its larger neighbour, Monaco does not operate under the same system of laïcité, and there is religious instruction (subject to parental approval).
Monégasque law protects the freedom of religion, but the country does have a state religion (Catholicism), unlike France which is secular.
Children are taught English from the age of three in Monaco, in contrast with France where formal tuition in foreign languages starts later.
The principality's public schools also teach the history of Monaco, as well as compulsory Monégaseque language courses.
Public school holidays also bear similarity to France, with an autumn, Christmas and winter break, but there are some differences - for instance, schoolchildren in Monaco get time off for the Formula 1 Grand Prix (this year running from May 22nd to May 27th).
How does healthcare work in Monaco?
The principality has state-funded 'Monégasque Social Security system', which functions similarly to France's own Assurance Maladie and is available to anyone working in Monaco.
Generally, both Italian and French citizens covered by their state plans can access basic healthcare in Monaco, though other EU nationals who hold a CESS card are not covered.
Those living in the Alpes-Maritimes département, which borders Monaco, can access care in the principality simply by presenting their carte vitale.
The process is slightly different for those covered by French sécurité sociale that live in other parts of the country, as you may need an 'autorisation' from your local CPAM for a planned hospitalisation.
There is one public hospital in Monaco, the Centre hospitalier Princesse-Grace, but in the past, serious cases have been transferred to the Nice University hospital, particularly during the Covid-19 pandemic.
What about military and police?
Monaco is one of the world's most policed countries (per capita), with over 500 officers for a population just over 36,000 people.
The principality has its own civil police department, which falls under its interior ministry, and mostly focuses on maintaining public order. There are several units, including a division for marine and airport, urban policing, administrative policing and criminal investigations.
As for Monaco's international defence - it is the responsibility of France, though it does have a small military made up of the 'Compagnie des Carabiniers du Prince' (mostly tasked with protecting the palace) and the Corps des Sapeurs-pompiers de Monaco (Fire and Emergency).
Monaco does have bilateral extradition agreements with France, so if a Frenchman commits a crime in the principality they likely won't get off scot-free.
Can any French residents move Monaco?
Anyone wanting to live in Monaco for more than three months must apply for a resident permit from the Monégasque authorities. No matter what your situation, you will need to show proof of adequate funds, housing, and your 'good character' (ie a background check).
However, the process after that is a bit easier for citizens of the EU or European Economic Area (EEA) - they need to show a valid ID or passport.
As for non-EU residents of France, if you have been living in France for more than one year, then you can submit a request to transfer your residence from France to Monaco. You can find more information on the Monaco government website Mon Service Public.
Non-EU nationals who want to move directly to Monaco must request a visa first from the French embassy or consulate in your country of residence, and then they will send you on to Monégasque authorities.
Monaco does have embassies and consulates in other countries, but immigration paperwork is first processed via the French authorities. More information available here.
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