The 2021 Monaco Grand Prix is just around the corner (pun intended). This weekend, open wheel race cars will be flying around the tight streets of Monaco at speeds of 200-300 km per hour. This event often highlights incredibly wealthy and famous people who either live in, or are visiting Monaco. This left some of us at AIRINC wondering – why is Monaco so appealing to the wealthy elites of the world?
Personal Taxes (Attractive)
It is quite common for Grand Prix racers to attempt to establish tax residency within Monaco, as the country does not levy and income tax or capital gains tax. Monaco is so transcendent in the racing industry that it is the only country that does not pay to host a race. Monaco is home to a wide range of European soccer stars, pro athletes, and other millionaires. One-third of Monaco's roughly 38,000 residents are millionaires, according to Business Insider.
The Location (Attractive)
Monaco is on the Riviera in the south of France near the border of Italy. This makes it is a convenient place to call home for people who often travel around Europe. Although, it is a relatively small area.
Housing Costs (Less Attractive)
Monaco has the most expensive housing market in the world. There are many additional costs associated with purchasing/selling real-estate that can add up very quickly. Therefore renting in Monaco is also very expensive given the high cost of owning real-estate.
Cost of Living (Less Attractive)
Monaco is very expensive compared to many other places around Europe. High wages and real-estate costs are the primary drivers of the cost of goods in Monaco. Also a 20% VAT is applied to some purchases.