Author: Bob Cartwright
Monaco is coming under pressure from the likes of Britain and Germany because it imposes no income tax on its residents. The Principality appeals enormously to the super-rich who largely earn their wealth elsewhere but avoid much of the taxes they would pay on their income by living in Monaco.
Many rich residents commute to London's City Airport from Nice Airport, after a leisurely helicopter flight from Monaco. The British Government has already made one change to its tax laws decreeing that Monaco residents who work for some of the year in Britain, like these commuters, must count the days of travel as days worked in Britain. For tax purposes, they are limited to ninety days a year in Britain.
Local Monaco observers think the pressure being applied to Prince Albert of Monaco over tax by Britain and Germany will have little impact on Monaco's popularity with the wealthy. It's pointed out that other tax havens are far less attractive than the beautiful Riviera state with its appealing climate and facilities.
The vast majority of Monaco's residents are expats - over 25,000 out of a 32,000 population. With the concentration of wealth in the less than one square mile Principality, it's hardly surprising the tiny state can support over forty banks.