Why the world's ultra-rich are looking for a Monaco address

India Today

5 days ago

Monaco's name comes from the ancient Greek word Monokos, meaning 'the Unique.' Fitting, isn't it? With more millionaires per square metre than anywhere else on Earth, and a coastline that looks like a scene from a Bond movie, Monaco has truly lived up to its ancient title.More and more of the world's richest people are looking to move to Monaco or at least have an address there. But why is this tiny country, smaller than many cities, drawing so much interest from the ultra-rich?With its location on the French Riviera, its luxury lifestyle, and some very relaxed tax rules, Monaco has become a top choice for millionaires and billionaires from around the world.MILLIONAIRES IN EVERY CORNERadvertisementMonaco's sun-drenched harbour is lined with luxury yachts that look more like floating mansions, while Lamborghinis, Rolls-Royces, and other supercars roam the streets.It may be the second-smallest country in the world, just after Vatican City, but it holds a very big place in the world of wealth. According to the World Bank, Monaco has a GDP per capita of $256,580.5 and a total GDP of just under $10 billion. This is far more than countries with much larger populations.For comparison, the United States has a GDP per capita of $82,769.4, and is the world's largest economy. This shows how rich Monaco's residents are. In fact, it is said that one out of every three people living in Monaco is a millionaire.TAX-FRIENDLY LAWS ATTRACT THE WEALTHYA big reason why so many wealthy people want to move to Monaco is because of its tax system.CA (Dr.) Suresh Surana explained that Monaco offers a very attractive setup for people with a high net worth. 'Monaco does not charge personal income tax for residents, except for French citizens due to a special agreement,' he said.He added that there is no wealth tax and no capital gains tax either. Even when passing on assets, the rules are easy, spouses and children do not pay inheritance or gift tax, and others pay a maximum of 16%.He added that these benefits, along with political stability and a high standard of living, make Monaco a popular choice for the rich. 'It helps them protect and grow their wealth,' he said.HISTORY BEHIND TAX-FREE STATUSWhy does Monaco not charge income tax? The answer lies in its history.Dr. Surana said the policy dates back to 1869. 'Prince Charles III removed personal income tax when the Monte Carlo Casino was set up. The state used the money from the casino to fund its expenses,' he explained.This move attracted many rich people to the country, helped build its economy, and earned it a reputation as a tax haven.WHO CAN LIVE IN MONACO?Not everyone can just pack their bags and move to Monaco. There are some steps to follow to become a resident and enjoy its tax benefits.Here are the basic requirements:Minimum age: You must be at least 16 years old.Clean record: You need to show a police certificate proving you have no criminal background.Place to live: You must own or rent a home in Monaco. In some cases, you can stay with a close family member or show links through a company that owns a home.Money proof: You have to show that you have enough money to support yourself. This could be done with a bank letter or other financial papers.Time spent in Monaco: You should live there for more than 183 days a year or have your main business there. You may also be eligible if you spend most of your year in Monaco.People who live there for less than six months need to provide extra documents to qualify.WHERE ELSE IS TAX LOW OR ZERO?Monaco is not the only place in the world with low or no personal income tax. There are several countries and territories that offer tax advantages and attract wealthy individuals, businesses, and professionals.Here are some examples:United Arab Emirates (UAE): No personal income tax or capital gains tax. Corporate tax began in 2023, but small businesses and free zones still enjoy exemptions.Qatar: No personal income tax on salaries or capital income. A 10% corporate tax applies to foreign companies.Bermuda: No personal income tax. The government collects revenue through payroll taxes paid by employers, import duties, and tourism.The Bahamas: No income tax, capital gains tax, or wealth tax.Cayman Islands: No income tax, property tax, or capital gains tax.Oman: No personal income tax, though there is a value-added tax (VAT).Kuwait: No personal income tax for individuals.These places may sound ideal, but experts advise caution."It is pertinent to note that while low or zero-tax jurisdictions may offer significant fiscal advantages, individuals must exercise caution as aggressive tax residency planning can trigger scrutiny under anti-avoidance rules, exit tax provisions, or Controlled Foreign Corporation (CFC) regulations in their home country," said Dr. Surana.Trending Reel