Generally, tax residence in Monaco is proven by obtaining a tax residence certificate issued by the Principality’s authorities, the so-called “certificat à des fins de formalités fiscales”.

Since there is no Personal Income Tax Law in Monaco, there is no definition of a taxpayer as in other jurisdictions but a definition of those considered as tax residents and then entitled to request a tax certificate.

The conditions for obtaining a tax residence certificate are specified in Sovereign Ordinance No. 8,372 of November 26, 2020, being these conditions controlled by the Monegasque government and the Monegasque authorities.

How to obtain a tax certificate in Monaco?

To obtain the aforementioned certificate of tax residence in Monaco a person has to:

• Prove that he/she holds a valid administrative residence permit or “carte de séjour”;
• Declare on his or her honor that he or she meets the tax residence criteria, which means have his or her “foyer” in Monaco by spending more than 183 days in the country or having its center of economic interest in Monaco;
• Prove that he/she occupies a dwelling in Monaco, i.e. prove his/her residence in Monaco during the last year (whether owned, rented, or cohabiting with someone) through utility bills, rental agreements, and other proofs admitted by the Monegasque Law;
• Provide any other document that may be requested by the Administration if the abovementioned documents are not enough to show a solid residency in the country.

In the case we mentioned above, we note that the Monegasque Administration often requires additional documents to ensure that the residence is real. Documents such as electricity bills of a house (see our article “Buying a house in Monaco“) or bank statements of the applicants.

In practice, the tax residence certificate is very important when you have economic, personal, or presence relations in other jurisdictions (i.e. family residing outside Monaco, many properties outside Monaco, etc.).

How to be considered a tax resident in Monaco?

Related: Monaco taxes for foreigners

As previously mentioned, to obtain a tax certificate, it is necessary to have an established domicile or “foyer” in Monaco. This can be achieved either by meeting the following conditions:

• spending 183 days in Monaco or;
• by strengthening your economic ties to the country.

For those who wish to spend less than 183 days in Monaco, it is recommended to strengthen economic ties by increasing wealth and economic activity within the country.

This can be achieved by investing in Monegasque banks, purchasing real estate, establishing a family office, or creating a service-providing entity.

Additionally, having children enrolled in local schools or having your partner reside with you in Monaco can reinforce your status as a tax resident.

While these measures can significantly reduce the required 183-day stay, it is important to ensure that you do not spend more days in another jurisdiction than in Monaco, as this could lead to potential foreign tax audits. Of course, these are general assumptions and our professional advice is key to achieving successful results.

Why become a tax resident in Monaco?

One of the main attractions of Monaco is the favorable tax regime for individuals. Generally speaking, Monegasque law does not impose an income tax on individuals acting within the framework of their private and investment activities.

Monaco does not levy any personal income tax, thus Monaco does not levy any income tax on individuals, except French nationals. French nationals are considered residents of France even if they live most of the year in Monaco or meet the tax residency requirements. Other nationalities do not pay income tax in Monaco as long as they meet the requirements to be considered tax residents in Monaco.

Additional advantages of living in Monaco apart from not paying personal income tax are the following:

• There are no CFC (Controlled Foreign Corporation) rules, so any gains perceived indirectly through offshore companies would not be taxed in Monaco.
• There is no “Wealth tax”.
• No taxation on capital gains.
• No taxation on dividends.
• No taxation on structured products, etc.

How to become a resident of Monaco?

If you want to obtain residence in Monaco, all you have to do is apply to the authorities for the Monaco residency permit.

Nationals of the EU and the European Economic Area only need to have a valid identity card or passport before starting any procedure and fill in the forms of the Monegasque government, as long as a series of requirements are met.

How to take the first step?

At MonacoAdvisers we have been helping entrepreneurs, high-net-worth individuals, sportsmen and women, and people from the world of cryptocurrencies to transfer their tax residency to Monaco for years.

Our presence and contacts in Monaco make us an ideal travel partner for this arduous task. So if you have questions about Monaco and would like us to help you with the process, please write to us at [email protected].

If you are interested in changing your tax residence and are not quite sure which is your ideal destination, we recommend you download for free and read our updated report “The definitive guide to living and paying taxes in Monaco”, available below.

By Marc Cantavella (International tax advisor and wealth planner)