Tax system in Monaco attracts both wealthy individuals and investors and entrepreneurs. Why should you place your wealth and business in this country? We answer below!
Table of Contents
- Tax system in Monaco: No Personal Income Tax and Conditional Corporate Income Tax
- Tax system in Monaco and VAT
- Tax system in Monaco – Tax Residency
- Running a Business in Monaco and Taxes
- Tax system in Monaco – International Transparency
- Tax system in Monaco – Summary
- FAQ – Questions And Answers – Tax system in Monaco
Tax system in Monaco: No Personal Income Tax and Conditional Corporate Income Tax
Monaco does not levy personal income tax (PIT). This rule has been effective since 1869. There is only one exception involving France. French citizens residing in Monaco are subject to a bilateral agreement and must comply with French tax law.
When it comes to CIT, Monaco’s tax system only imposes it on companies earning more than 25% of their revenue outside the principality. In such cases, the CIT rate is 33.33%. Local businesses operating solely within Monaco are not subject to corporate income tax.
Tax system in Monaco and VAT
Although Monaco is not a member of the European Union, it applies VAT in line with French regulations due to customs union with France. Thus, VAT in Monaco is charged at the rates of 20%, 10%, 5.5%, and 2.1%. It applies to all businesses registered in the principality.
| Type of Tax | Does it Apply? | Rate (2025) |
| PIT (Individuals) | No (exception: French citizens) | – |
| CIT (Companies) | Yes (under certain conditions) | 33.33% |
| VAT | Yes | 20%, 10%, 5.5%, 2.1% |
Tax system in Monaco – Tax Residency
Obtaining tax residency in Monaco involves fulfilling several formal requirements. A prospective resident should:
- Have a residential address in Monaco (either rented or owned),
- Open a bank account with a local financial institution,
- Demonstrate sufficient financial means,
- Stay in the principality for at least 183 days per year.
Running a Business in Monaco and Taxes
Starting a business in Monaco requires meeting specific regulatory requirements. Anyone interested in running a business should consult a tax advisor familiar with local laws.
In practice, Monaco taxes do not include CIT for companies whose activities are limited to the territory of the principality. However, export businesses must consider applicable tax obligations.
Tax system in Monaco – International Transparency
Although Monaco remains a symbol of favourable tax conditions, it has actively participated in international tax information exchange for over a decade. The Monaco tax system adheres to OECD and EU standards.
Banks and financial institutions are required to share client data with tax authorities. This is in line with CRS and FATCA regulations.
Tax system in Monaco – Summary
As of 2025, Monaco offers one of the most favourable tax environments for building wealth and business. The absence of PIT, the limited scope of CIT, predictable VAT rules, and full transparency with international standards. All these aspects make Monaco one of the leaders in terms of tax attractiveness.
Contact our experts to explore the opportunities offered by this jurisdiction. Professional legal and tax support will help you carry out the process legally and efficiently.
FAQ – Questions And Answers – Tax system in Monaco
Does Monaco charge PIT to its residents?
No, except for French citizens.
What are the applicable VAT rates in Monaco?
Same as in France: 20%, 10%, 5.5%, and 2.1%.
Do all companies in Monaco pay CIT?
No. Only those earning more than 25% of their revenue outside Monaco.
How do you obtain tax residency in Monaco?
By fulfilling formal requirements and spending at least 183 days per year in the principality.
Does Monaco report tax data?
Yes, in compliance with international standards such as CRS and FATCA.
Can foreigners set up a company in Monaco?
Yes, after meeting the required formal conditions.
Is Monaco a legal method for tax optimization?
Yes, provided everything is done by international law.
What are the main benefits of Monaco’s tax system?
No PIT, limited CIT, stable and transparent tax regulations.
Does Monaco impose inheritance or gift taxes?
Not in direct lineage. In other cases, taxes may apply.
Is investing in Monaco safe?
Yes, the country offers economic and political stability as well as transparent regulations.