Sometimes, it is better to avoid Monaco as a tax haven completely and look for better solutions! Read the full article here.
At first glance
When most people hear about Monaco, they think of a fairytale: the blue Mediterranean, mild climate, French chic, princess Grace, save … the ultrarich, and no tax. But is it like this? Yes, it’s a paradise… for these reasons. But…
The negative points of living in Monaco
1. It’s overcrowded.
The whole Principality is about 3km across and 1km deep. There are blocks of flats everywhere you look; it’s unbelievable how many apartment blocks have been crowded into such a small land area. It’s a concrete jungle.
2. Faded glory.
Most buildings are old and worn out, and most apartments are small and built in the 1970s and 1980s.
3. Empty.
Only 35,000 inhabitants live there, so it always feels like Sunday morning.
4. Ridiculous expensive.
Everyone, also the wealthy (because everyone is wealthy), lives in small apartments and pays an average rent of 25.000 EUR per month. To buy, you typically look at between 2 and 12 million; you can pay much more. Considering what you get for your money, it is truly astonishing that so many people come here. My only conclusion is that many people who come here love money so much that they prefer to have more in the bank and live in a tiny apartment.
5. No nature.
There is virtually no nature here – just concrete roads and apartment blocks. Instinctively, I always feel better when I’m out of Monaco, if only because I can see a few trees and grass. On some level, the inhabitants also feel this – I don’t think it’s a coincidence that the overwhelming majority of people have pets, sometimes several, even though it’s a terrible place to have a pet. People need that connection to simplicity and nature that is so sorely lacking here, and their pet provides them with this.
6. Boring.
There is little isn’t to do in Monaco. For a minute village, it’s not bad, but compared to any other medium-sized city, there just isn’t much to do at all. Now, if you have enough money to own a boat or take trips every weekend, which many people here do, then you have more options, but this is mainly down to your wealth and has nothing to do with what’s on offer in Monaco.
7. There must be a real sense of community or belonging here.
To some extent, there is an ‘A-list’, but that’s a fairly shallow sense of community. Many reasonably intelligent people seem to lack any real meaning in their lives as they have no resistance in their day-to-day lives and don’t gain a sense of purpose or achievement. This leads them to focus on trivial, pointless things.
8. You are surrounded by the trappings of wealth so much that all status symbols become what they are anyway – irrelevant and a bit stupid.
I see at least thirty Ferraris or Lambos every day. Flashy jewellery stores and designers surround you. It’s status-obsessed, yet you can’t get any real status through material possessions here because everyone is so wealthy – it’s a bizarre paradox. If I had a Ferrari and wanted to show it off, Monaco would be the last place I’d go because everyone seems to have one! I’d go somewhere normal where I’d be seen as a ‘badass’ or ‘elite’ if I wanted to show off.
9. Although everyone’s situation and reason for going to Monaco differ, a certain type inevitably lives here.
You find few young people, artistic or creative types or even many young entrepreneurs, although a few are knocking around. It’s almost exclusively the domain of the globally rich, and then people like me come in to provide certain services to the market here. The typical picture is the once nice and sexy top model, who is now old; despite the best plastic surgeons, she looks more and more like her dog and is alone in the empty streets of Monaco. Her former older (of course) boyfriend has already been in his graveyard for a long time. And she has only some memories of the good old days😊
Is Monaco a real tax haven or not…???
Yes, it is a tax haven because:
- There is no personal income tax
- No capital gains tax
- No inheritance tax in direct line
BUT:
- You pay 20% VAT
- The °corporation tax is 25 !! It is one of the highest in Europe!!!
- Monaco signed CRS so they can exchange information
- The government of Monaco will check if you live there!! Especially when you want to become a permanent resident, they will require you to live there for more than 183 days, which is a lot to live in a place the size of Central Park!
- Social insurance contributions payable by employers and employees are high. The employer’s contribution is between 28%-40% (averaging 35%) of gross salary, including benefits, and the employee pays a further 10%-14% (averaging 13%).
So:
If you have a company, do not invoice from Monaco. Even if your company pays 25%, people will still consider Monaco a tax haven!
Given the enormous wealth of the people living in Monaco, why would they choose to live there when they can afford to live anywhere else?
Better alternatives
A better alternative for Monaco as a tax haven is Bulgaria. Monaco could be an idea for the ‘ultrarich’, but there needs to be more space. The rich could find a nice villa in Marbella next to the golf court, set up their company in a low-tax jurisdiction (Bulgaria,USA…), and protect their wealth in some smart structure like a foundation or trust. Also Italy could be a good alternative for rich people!
Let’s embrace creativity and legality in our fast-paced, mobile world. There may be better alternatives than Monaco! Reach out to us at info@dehoon-dhp.com.
