The Facts

A Dynamic Economy
The Principality has over 110 vigorous industries within its boundaries, representing 8% (some $1.16 billion) of the national economy. In addition, Monaco’s remarkably diverse economy includes construction, banking, finance and other service industries, international trade and shipping and even aquaculture. The Principality is particularly noted for its groundbreaking research and development activities in a variety of industries including biotechnology and environmental fields.
National Budget:							$975,591,844* (2005 expenses)
							$914,484,152* (2005 income)
Revenue of Monaco-Based Companies:							$14,507,885,710* (2005)
Gross Domestic Product							$ 4,577,448,803 ($ 66,366 per capita)
Work Force:							38,595 (91% employment in 2000)
Public Sector Revenues (2000):							Taxes on business turnover (sales) 52.8% Fees for legal transactions 9.9% Taxes on business profits 7.3% Concessions (including SBM gaming) 6.3% State-operated monopolies 5.5% Custom duties 4.3% Miscellaneous 3.8% Banking and finance 1.5%
* All figures calculated on exchange rate of 1 € = 0.75 USD

Diversified Activities
Light Manufacturing Sector
	-		Chemicals, Pharmaceuticals and Cosmetics Together provide 42.32% of industrial output and employ 1,086 people.
	-		Electronics 9.58% of industrial output (precision high-tech, such as thermostats, switches, transformers for space industry), employing 405 people.
	-		Transformation of Plastics Representing 30.28% of industrial output (automobile parts, food packaging, filters); this is the second biggest light manufacturing sector, providing work places for over 1,100 people
	-		Printing, Binding and Boarding Silkscreening, advertising, packaging (4.96% of industrial output).
Service Sector Services such as insurance, real estate, law, shipping, transport, freight and accountancy employ 47% of Monaco’s population.
	-		Banking & Finance With a network consisting of more than sixty banks and financial institutions, the very highest standards of confidentiality and security, Monaco offers one of the finest banking systems in the world. In addition to providing an extensive range of financial services for businesses, the Principality’s banking community prides itself on its wealth management services. There is no tax on Monégasque portfolios or capital and no duties levied on capital transfers or stock and share transactions.
	-		Shipping Over 170 shipping companies based in Monaco generate 4% of the national economic turnover and employ over 1,300 people while remaining one of the Principality’s primary growth industries.
	-		Tourism Monaco’s hotels, some of the most luxurious offering the best values in Europe, provide a total of 2,616 rooms. Tourism arrivals, based on the number of visitors who spend at least one night in one of the Principality’s hotels, amounted up to over 280,000 in 2005; and a total of 802,716 nights were spent by tourists in the Principality. International meetings as well as special events for which the Principality is famous also play an important role in tourism counting for 25% of total nights spent in Monaco in 2005. In July 2000, Monaco witnessed the opening of the Grimaldi Forum, a state of the art 80,000 square foot exhibition, convention and cultural center. The Forum opens new perspectives and growth to business tourism, already doubling the number of business events taking place in Monaco.
	-		Health The Princess Grace Hospital Center is equipped with one of the best medical investigative scanning and visualization services in Europe. Monaco Cardio Thoracic Center benefits from remarkable facilities and from the expertise of a Scientific Council made up of 25 members. For more information visit www.ccm.mc
High Tech Sector
	-		Aquaculture With no rural area or agricultural land, Monaco has, nevertheless, established an international reputation for its thriving aquaculture industry, developing plant and animal species for industrial use and food.
	-		Civil Engineering With little land to develop, Monaco has had to rely on innovative techniques for reclaiming land from the Mediterranean. The civil engineering methods created through this process have become a highly visible and exportable technology.
	-		Environmental Research With probably the most famous oceanographic institute in the world, Monaco has been a leader in marine environment research and study, as well as marine biology development.
	-		Telecommunications The creation of state-of-the-art Monaco Telecom has provided companies in Monaco with the very best international communication facilities and services, and has made telecommunications one of the Principality’s most important developing economic sectors.
Commercial Activity More than 1,160 retail stores help make Monaco a major hub for trade in Southern Europe. Elegant boutiques selling everything from fashion and jewelry to antiques and art, shopping centers and markets span the entire range of retail commerce and attract an affluent international clientele.
-	Gaming The Monte-Carlo Casino world-renowned gaming represents 4% of Monaco’s yearly total revenues.
Types of Businesses
The Principality of Monaco encourages foreign investment in either existing companies doing business in Monaco or in the creation of new entities. Five kinds of businesses may be established in Monaco: trade or activity in your own name, general partnership, limited partnership, partnership limited by shares (subject to prior authorization by the government) and specific structures (headquarters, agencies, trusts, brokers, lead-back businesses and independent professions). Limited liability partnerships are not provided for. Foreign entities may also open headquarters or trading agencies in Monaco or administrative offices for companies headquartered elsewhere in the world.
Hiring a Workforce					All companies intending to employ local staff must seek permission and register all employees with the Caisse de Compensation des Services Sociaux (CCSS),the Caisse Autonome des Retraites, (CAR - the Principality’s pension fund), the AMRR (Monégasque Association of Pensions by Distribution) and ASSEDIC (Association for Employment, Industry and Commerce). Employers also must secure work accident and industrial deseases insurance with a private insurance company. The Employer's charges on salaries paid amount to an average rate of 32%. Salaried employees also pay contributions to some of the organizations named above. These contributions amount to about 11% of the salary. Considering paid holidays, employees in Monaco are entitled to 12 legal paid public holidays and 30 days annual paid holidays. The latter amount might increase according to the position and time spent working for a company.

A Moderate Tax System
Non-French residents of Monaco pay no personal income, capital gains, housing or real estate tax. Companies generating at least 25% of turnover outside the Principality are taxed on revenues at a rate of 33.33% (administrative salaries are deducted from gross profit before taxes). Administrative offices are taxed at 2.66% of running costs. Sales in Monaco are taxed at 19.60% (Value Added Tax). Profits are tax exempt for the first two operating years of a company and partially exempt for the next three years. Companies engaged in technical and scientific research receive an additional tax credit.

Customs
In application of French-Monégasque agreements, customs regulations in the Principality of Monaco are the same as in France. The two states compose a Customs Union and the total freedom of capitals between them was established on January 1, 1990. The Principality is therefore part of the European Union customs zone, though it does not belong to the European Union.

Efficient and Reliable Banking System
Reasons for Confidence
		-	Political risks are eliminated because of the geographical position and institutional stability of Monaco.
		-	Reliability and discretion are the hallmarks of Monaco’s banking system. The confidential nature of transactions is guaranteed while Monaco participates in international agreements against the laundering of money generated by criminal activities.
		-	At the Principality's request, the International Monetary Fund conducted a comprehensive review of the financial sector which was concluded in May 2003. The IMF reports find that the regulation and supervision of the financial sector are consistent with international standards
		-	Monaco’s banking activity follows strict European rules under the control of the Banque de France.
The Attractiveness of Monaco as a Financial Center
		-	The Principality hosts more than 40 establishments divided into four categories:
				,		Seventeen banks under Monégasque law;
				,		Eight foreign banks with no establishment in France;
				,		Fourteen subsidiaries of French banks;
				,		One subsidiary of French or other foreign banks under foreign control.
				,		One bank with special status
		-	Even thoughthere are no insurance companies based in Monaco, the Principality hosts some 50 or so agents and brokers representing over 150 international insurance companies
		-	The banking sector is the third largest employer of the Principality with more nearly 2,800 people.
		-	Skilled banking experts offering services that range from asset management, management companies, insurance agents & brokers, company service providers to international trade credit operation
		-	An ever-expanding international vocation.
The banking and financial services industry has greatly expanded recently. Its foray into new market tools, notably mutual funds, and the high concentration of financial professionals in the area have made the Principality a center of international business.