These are the requirements to become a tax resident in Monaco

We often receive queries from people interested in moving to Monaco who confuse administrative residency with tax residency, and who are not sure how to obtain and maintain both.

In this guide we will explain the difference between the two, the conditions for obtaining Monaco’s highly sought-after tax residency, and the incredible benefits that come with it.

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Monaco administrative vs tax residency

The first step in becoming a Monaco tax resident is obtaining the administrative residence permit (“carte de séjour”), which gives you the right to live in the country. Only then, and if you meet some requirements, you can claim the tax resident certificate, the so-called “certificat à des fins de formalités fiscales”.

This document can be obtained approximately one year after arriving in the Principality, and in it the Monegasque state certifies that you are therefore entitled not to pay taxes in Monaco at your personal level, since there is no income tax in Monaco.

However, this document should not be taken for granted. The mere fact of having administrative residency does not mean that you can obtain the tax residency certificate at will.

Later, we will explain the requirements to obtain and maintain this certificate, but first, we will quickly explain how to complete the previous step: obtaining administrative residency.

Getting Monaco’s resident permit

Some countries grant residency or citizenship through a minimum investment. However, there is no “Monaco Golden Visa” or “Residency by Investment” program. However, each applicant must meet certain conditions, including demonstrating that they have sufficient financial means to support themselves while living in Monaco.

The most common path for high-net-worth individuals to prove economic sufficiency is through the collaboration of the bank: you will open a Monaco bank account and deposit a substantial amount (usually starting around €500,000). After this deposit, the bank certifies to the authorities that you have the financial resources to sustain yourself.

In addition, of course, you have to meet other requirements such as having a rental or owned property in the Principality, not having a criminal record, completing some paperwork, passing an interview…

Other ways to prove financial sufficiency

Besides the common practice of depositing a significant sum in a Monaco bank, you can also meet the financial sufficiency requirement through:

Family reunification: joining a spouse or close relative who is already a Monaco resident.
Employment or self-employment: being hired by a Monaco-based employer or operating a recognized business activity.
Purchasing or managing a local company: if this provides verifiable income.
Retirement with adequate pension and savings: demonstrating a stable pension or investment income.
Being financially supported by a Monaco resident: a spouse, parent, or partner pledging to cover your expenses.

Additionally, it is important to emphasize that buying real estate in Monaco does not automatically qualify you for residency. It can strengthen your case by demonstrating your financial sufficiency and your strong economic ties to the country, but the key element remains the letter of recommendation from your local bank.

Ultimately, the bank deposit or investment route remains the simplest and most direct method for most high-net-worth individuals.

Duration of the residence permit

Monaco issues three types of residence cards:

1-year card (“Carte de séjour de 1 an”): Renewable twice (up to 3 years total).
3-year card (“Carte de séjour ordinaire de 3 ans”): Renewable twice (up to 9 years total).
10-year card (“Carte de séjour privilégiée de 10 ans”): Renewable indefinitely.

And after ten years of living uninterruptedly in the country, you could even apply for Monegasque citizenship.

Getting the tax residence certificate

Once you hold a valid Monaco residence permit, you can apply for the certificate of tax residence, an official document that proves to foreign authorities that you are a tax resident in Monaco.

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.

To obtain this certificate, you must:

Hold a valid administrative residence permit.
Declare on your honor that you meet Monaco’s tax residence criteria (i.e., staying at least 183 days per year or having your economic center in Monaco).
Prove that you reside in Monaco (via utility bills, rental agreements, or similar documents).
Provide additional documents if required by the Monegasque authorities.

In addition, when you leave your country you must complete the corresponding process (usually a simple administrative procedure) to notify that you are no longer a tax resident there.

Possession of a Monegasque tax residency certificate remains essential, both as a safeguard against third countries and for certain banking procedures (Monegasque banks often require it).

Keeping the tax resident status

To obtain and maintain the tax certificate, it is not strictly necessary to stay in Monaco for 183 days; normally, it is sufficient to have strong economic and personal ties to the country, such as 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 strengthen 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.

Why become a tax resident in Monaco?

In addition to its undeniable glamour and iconic lifestyle, one of Monaco’s main attractions is its favorable tax regime for individuals. Generally speaking, Monegasque law does not impose income tax on individuals engaged in private and investment activities.

Monaco does not levy any personal income tax, except to French nationals. French nationals are considered residents of France for tax purposes, even if they live most of the year in Monaco or meet Monaco’s tax residency requirements.

Individuals of other nationalities do not pay income tax in Monaco, provided they meet the requirements to be considered tax residents.

Additional tax advantages of living in Monaco, apart from not paying personal income tax, include:

There are no Controlled Foreign Corporation (CFC) rules, so any gains received indirectly through offshore companies are not taxed in Monaco.
There is no “Wealth tax”.
There is no taxation on capital gains.
There is no taxation on dividends.
There is no taxation on structured products, among others.

You can read more in-depth about this topic in our guide on all taxes in Monaco.

How to take the first step?

If you want to obtain Monaco residency, will require assistance from a local expert since the procedures can be cumbersome even for seemingly simple cases.

At MonacoAdvisers, we have years of experience assisting entrepreneurs, high-net-worth individuals, and professionals in relocating their tax residency to Monaco, so if you have any questions or need assistance, don’t hesitate to contact us at [email protected] or through the contact form.

Also, we recommend you to download our free report, “The definitive guide to living and paying taxes in Monaco”, available below.

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