TAX RESIDENCE AND RESIDENCE PERMIT IN MONACO
Tax residency, residence permit, permanent residence in Monaco
The Principality of Monaco has many amazing features that attract numerous people from tourists to businessmen to this state. Facing the Mediterranean Sea, nestled between the French and Italian Riviera and surrounded by mountains and warm beaches, Monaco offers its visitors and residents stunning panoramas that never cease to inspire.
Once a year, the streets of Monaco are transformed into the world’s most prestigious Formula 1 racing track, and the supercars of some of the world’s richest people roam the streets on a regular basis. The country is characterized by mild winters, warm summers and incredibly delicious food. Security is also one of the safest countries in the world with virtually zero crime rates, high-tech security cameras throughout, and a large and active police force.
Easily accessible from Nice International Airport, which is just 30 minutes from Monaco, from where you can easily travel across Europe and the rest of the world for business and leisure purposes.
Therefore, Monaco has long been a magnet for ultra-rich people from all over the planet, due to the tax policy of this country. Tax residency in monaco Monaco is a haven for the rich and famous. In 1869, the country’s authorities abolished the income tax.
Exceptions: French citizens and companies registered in Monaco, when less than 75% of the revenue comes from the sale of products and services outside of Monaco, then French taxation applies
The country also levies a value added tax (VAT) of 19.6%, except for certain products – up to 10% or 5.5%.
Importantly, there are no gift or inheritance taxes in the country if the beneficiaries are direct relatives (parents, spouse or children). This does not apply between siblings, in which case an 8% tax will apply. If the beneficiary is a person who is not related to a resident of Monaco, a tax of 16% is payable. Inheritance and gift tax does not apply to assets located outside of Monaco.
These few tax exemptions are so minor and applicable in so few situations (other than VAT) that they have had little effect on the number of ultra-wealthy foreigners who seek tax residency in Monaco. This can be done by obtaining fiscal residency in the country by staying at least 6 months a year. But first, you will have to obtain a residence permit, which gives the right to stay in the country for such a long period.
How to get tax or fiscal residency, residence permit, permanent residence
Monaco actually allows foreigners to obtain residency on fairly liberal terms.
There are 3 ways to become a resident of Monaco, two of which are quite obscure.
1- conclusion of an employment contract.
2- personal business.
3- Golden Visa te investment through opening a bank account in Monaco and making a deposit of at least 500,000 euros, followed by the provision of a bank certificate to the government (the certificate must state that its holder has enough funds to support himself during his stay in the country).
Obtaining residence in Monaco – Three stages
The residency process is divided into 3 stages, and in order to become a tax resident of the country, you need to live in Monaco for more than 6 months a year
1 – obtaining a De Sejour Temporaire card (temporary resident card), for a period of 12 months. you must live in Monaco for at least 3 months to retain the right to residency but for tax residency a minimum of 6 months. Further, it is necessary to extend the temporary resident card for another 1 year. (two updates).
2 – After 3 De Sejour Temporaire cards, you can apply for a De Sejour Ordinaire card (ordinary resident card), you must live in Monaco for at least 3 months to retain the right to residency, but for tax residence, at least 6 months.
The card is already valid for 3 years and can be renewed for another three years as many times as needed.
It is important to obtain tax residency by living in Monaco for more than 6 months a year
3 – After that, the foreigner gets the right to stay in the country for ten years without having to renew his resident card every three years. After nine years of residence in Monaco – three De Sejour Temporaire cards (3 years) and two De Sejour Ordinaire cards (6 years) – it will be possible to apply for a Carte de Sêjour Privilegie (Privileged Resident Card).
The Carte de Sêjour Privilegie is issued for a period of ten years and requires a stay in the country for a longer period. To maintain the validity of the privileged resident card, you need to live in Monaco for at least 183 days a year.
Monaco Residency – Application Process
The procedure for renewing a resident card is relatively simple and fast. But the procedure for the initial application for such a card is not so simple. It will take a lot of time and a considerable package of documents to pass it. In fact, it usually takes 4-6 months (sometimes more) to complete the application process.
To get to Monaco, everyone, except EU citizens for them to enter without a visa, must apply for a long-term visa through the nearest French consulate or obtain a Schengen long-term visa.
Non-EU citizens who have lived in France for more than a year can apply to transfer their residency to Monaco and skip the long-stay visa application process.
After obtaining a long-term visa (or transfer and confirmation of French residency in Monaco), the applicant is required to provide three things:
1-confirmation of the availability of a place to stay in Monaco,
2-confirmation of sufficient financial resources and
3-proof of financial integrity.
1- application form for residency (the form can be obtained from the Sûreté Publique office),
3-Applicant’s birth certificate and any marriage or divorce certificates, if applicable. 4-information about the education and professional experience of the applicant, as well as documents confirming the fact that the applicant has acquired health insurance in Monaco.
Proof of accommodation
The authorities of Monaco require:
• Documents confirming the purchase of ownership of a house or apartment in Monaco with registration of such an asset in the name of the applicant; or
• Proof that the applicant is a director or shareholder of a company that owns a house or apartment in Monaco; or
• Documents confirming the lease of real estate in Monaco for at least one year with the execution of a lease agreement in the name of the applicant; or
• Proof that the applicant lives in Monaco in the house or apartment of a close relative such as a spouse or partner.
• The applicant must also provide an electricity contract for the property in which he or she will live. It is also important to note that the size of any piece of real estate must match the number of people living there. For example, a couple may rent a one-bedroom apartment, but a family of four must rent or purchase a home with at least two bedrooms.
• While it is not necessary to buy property in Monaco in order to qualify for residency in this country, this is a pretty attractive option if you have the money. Given the limited area and the resulting shortage of building land, as well as high demand from a large number of ultra-wealthy buyers, real estate in Monaco is becoming an increasingly attractive investment.
• investing in local real estate is safe because it is a tiny and almost tax-free place that many of the rich and famous people of the planet want to go to, and demand exceeds supply
• If you are not too keen on renting, buying a home in Monaco can be a great way to both prove you own a home and invest in a safe market and profitable asset.
• Prices for 1 million euros you can buy only about 15 m2 of housing (which makes Monaco the most expensive place in the world to buy real estate).
• If you plan to rent out your property, you will be required to pay a 1% tax, but you can pass this tax on to the tenant. There is no real estate tax in Monaco, making this Principality one of the few countries in the world where you actually own your home.
Proof of sufficient financial resources
Proof of sufficient financial resources is required to obtain residency in Monaco. There are several ways
1- the conclusion of an employment contract and the submission as proof of a certificate of their salary.
2- Evidence of professional income from independent commercial activities or from activities through a company. He may also provide evidence that such an applicant is financially supported by a spouse or partner.
3- is the most commonly used. It requires obtaining a bank statement (written in French) from a bank in Monaco stating that the applicant has sufficient savings to live in the country. Interestingly, the required amount is determined not by the government of Monaco, but by the banks themselves.
The amount that the applicant must pay as a deposit depends on the bank and the applicant’s connections in the country. Many banks require a minimum deposit of one million euros, but the average amount requested is around 500,000 euros.
In this context, one more important point should be taken into account: the legislation of Monaco does not impose any restrictions on foreigners in terms of opening accounts in local banking institutions or owning real estate in Monaco.
Proof of Trustworthiness
Here, a certificate of good conduct from the last two countries in which the applicant was a resident for the last five years before arriving in Monaco will do.
An applicant must be able to show a perfectly clean record of service and no criminal record in order to become a resident of Monaco.
Once all the documents have been collected, it will be possible to contact the Residency Department of the Public Security Directorate of Monaco and agree on a time for an official residency interview. You must bring all required documents to the interview. You will need to pay a fee for a resident card in the amount of 10 euros, submit documents and answer a series of questions about your family, education, work experience and other qualifications.
After the interview, your application will be processed and authorized. EU passport holders can expect to receive resident cards within eight weeks of the interview. On the other hand, non-EU citizens usually wait sixteen to twenty weeks after the interview to receive their Monegasque resident cards.
Usually, a specially hired French-speaking specialist or personal assistant is engaged in preparing a package of documents and recording for an interview.
Is it possible to obtain citizenship in this jurisdiction?
Of the 38,000 residents currently living in Monaco, only about 8,000 are citizens. If you are interested in becoming a citizen of this country, there are a few things you need to know about the process. First of all, dual citizenship is prohibited in Monaco. If you have ever been granted citizenship before (for example, by the authorities of your historical homeland at the time of birth), you will need to renounce it. Personally, the Prince of Monaco decides on obtaining citizenship.
The main requirement is that you must have lived in Monaco for at least ten consecutive years at the time of your application (after the age of 18).
Technically, this means that if you have been a permanent resident in Monaco since you first became a resident, you will be able to apply for citizenship within a year of receiving your Carte de Sêjour Privilegie card.
Many foreigners are quite satisfied with the tax benefits they receive as fiscal residents of Monaco, without the large travel restrictions required to obtain citizenship.
Anyone who decides that they cannot do without Monegasque citizenship should be encouraged by the news that Monegasque citizenship is automatically transferred to the children of naturalized citizens who are under 18 years old at the time of naturalization of their parents.
Another great news is that Monaco offers its citizens one of the best passports in the world, guaranteeing visa-free access to 16 dozen countries. In most relevant rankings, the Monaco passport is in the top 20.
Life in Monaco
Renting a one-room apartment in the city center will cost about 4,000 euros per month, while three-room apartments – even outside the city center – rent on average for 13,000 euros per month (in the city center the rent is more than 20,000 euros). In fact, apartments in Monaco are rented out 3-5 times more expensive than the already high rental rates in the case of housing on the French Riviera
When buying real estate, the price in the city center can be more than 70 thousand euros per m2. The price drops to about 40 thousand euros per m2 outside the center. Demand for real estate does not promise a reduction in prices in the real estate market in Monaco.
According to the World Ultra Wealth Report, Monaco is currently one of the ten most popular places in the world to buy second homes and apartments.
And since demand is growing and supply is rather limited, such real estate investments can be very profitable. Investors looking to spend their roubles, dollars or pounds are also attracted by the relatively weak euro, which helps them gain additional cash from exchange rate differences.
Investing in real estate with high value (both in Monaco and in other parts of the world) has always been popular with successful businessmen. And such investments will continue to take place as the global economy picks up speed.
Buying real estate in Monaco is considered not only a good investment, but also a great way to secure a chic vacation spot. In addition, the possession of a prestigious house or apartment in Monaco has also become a symbol of high status.
This is the place where wealthy people can enjoy their wealth.
The available options for obtaining residency and obtaining a tax resident certificate in Monaco are extremely interesting. An additional argument in favor of obtaining such residency is that the de facto jurisdiction is a member of the Schengen Agreement and offers its officially registered residents quick access to almost all European countries.
In addition, no other country in the Old World offers such attractive conditions for tax residency. In fact, this is an exclusive option, given the geographical proximity of Monaco to France and the rest of Europe.
We can accompany you in this process with pleasure!