Monaco: the residence market of the Riviera

A small state with a large banking sector

The Principality of Monaco is the oldest competitor of Lugano for the residence of wealthy Italians. It lies three hours by car from Milan, speaks French and Italian in daily life and has levied no personal income tax on its residents since 1869, with the exception of French nationals. Its financial sector is large in relation to its territory of about two square kilometres. The European Banking Federation, in its country profile of December 2024, counted 26 full-service banks and 67 portfolio and fund management companies, and gave the share of financial activities in Monaco's gross domestic product at almost 18 per cent in 2023. Less than half of the industry's assets belonged to non-resident clients from Europe, sub-Saharan Africa, the Middle East, Latin America and Asia.¹ At the World Economic Forum in Davos in January 2026, the Principality's representatives gave the financial assets deposited in its banks at about EUR 180 billion and the sector's share of GDP at nearly 19 per cent.²

The legal position of Monaco's banks differs from that of Swiss banks in one respect that matters for the comparison with Lugano. Monaco is not a member of the European Union, but under its conventions with France its banks are licensed and supervised by the French Prudential Supervisory and Resolution Authority (Autorité de contrôle prudentiel et de résolution, ACPR) and apply the same prudential rules as French and European banks. Asset management companies are supervised by Monaco's own Commission for the Control of Financial Activities (Commission de contrôle des activités financières, CCAF).³ Monaco's banks do not enjoy a European passport, because the Principality is outside the Union and the European Economic Area, and Monegasque banks serving Italian residents face the Italian third-country rules in the same way as Swiss banks.⁴ Their prudential regime, however, is French. Many of them are subsidiaries or branches of French, Swiss, Italian and other European groups that can serve European clients through their European affiliates.

Residence: the carte de séjour

Residence in Monaco requires a residence card (carte de séjour) issued by the Directorate of Public Security. Applicants must prove accommodation in the Principality, by ownership or a registered lease, and sufficient means of subsistence. There is no statutory minimum amount. In practice the banks that issue the required attestation expect a deposit, often in the order of EUR 500,000, and verify the origin of the funds. A first card is temporary and valid for one year, an ordinary card is issued after three years of residence for three years, and a privileged card after ten years of genuine residence for ten years.⁵ French nationals who established residence in Monaco after 13 October 1957 remain liable to French income tax under the Franco- Monegasque convention of 1963.⁶ For Italian nationals no comparable rule exists, although Monaco has long appeared on the Italian list of states for which Italian citizens who move there are presumed to remain tax resident in Italy unless they prove the contrary.⁷

The last point is of practical importance for the competition with Ticino. Article 2(2bis) TUIR presumes that Italian citizens who have deregistered from the Italian population register and moved to a state not included in a ministerial decree remain resident in Italy for tax purposes, subject to proof to the contrary.⁸ Switzerland was removed from the relevant decree of 4 May 1999 with effect from the 2024 tax period, by a ministerial decree of 20 July 2023 adopted under the law ratifying the agreement on cross-border workers.⁹ An Italian who moves to Lugano now bears no presumption of continued Italian residence, while an Italian who moves to Monaco must still rebut it. Italy and Monaco signed an agreement on the exchange of tax information in 2015, and Monaco has taken part in the automatic exchange of financial account information since 2018.¹⁰ The combination of these rules has made Monaco less attractive to Italians who want legal certainty about their tax residence.

Notes

1. European Banking Federation, "Monaco" (country profile, December 2024), https://www.ebf.eu/wp-content/uploads/2024/12/Monaco.pdf. On the abolition of personal income tax in 1869 see Wikipedia, "Monaco", https://en.wikipedia.org/wiki/Monaco (consulted October 2026; used as a last resort). ↩
2. Monaco for Finance, "In Davos, Monaco champions a trusted, long-term financial centre", 23 January 2026, https://www.monacoforfinance.mc/?p=4868. ↩
3. European Banking Federation (above). ↩
4. Wikipedia, "Monaco and the euro", https://en.wikipedia.org/wiki/Monaco_and_the_euro (consulted October 2026; used as a last resort), on Monaco's position outside the European Union and the eurozone and on its monetary agreements with France (2001) and the European Union (2011). Neither agreement confers passporting rights under the European banking and investment services directives. ↩
5. Maria Plotnikova, "Monaco carte de séjour: residence card, bank evidence and tax boundary", private.law wiki, 4 February 2026, updated 26 September 2026, https://wiki.private.law/en/monaco-residence-permit. ↩
6. Plotnikova (above), on Art. 7 of the Convention fiscale franco-monégasque of 18 May 1963 and the exception for French nationals who had lived in Monaco for five years by October 1962. ↩
7. Decreto ministeriale 4 maggio 1999 (Gazzetta Ufficiale no. 107 of 10 May 1999), list of states and territories with a privileged tax regime for natural persons, identified as the decree relevant to Art. 2(2-bis) TUIR in the annotation at Brocardi.it (above). The inclusion of the Principality of Monaco is reported by Wikipedia, "Paradiso fiscale", https://it.wikipedia.org/wiki/Paradiso_fiscale (consulted October 2026; used as a last resort). ↩
8. Art. 2(2-bis) TUIR, text as in force, https://www.brocardi.it/testo-unico-imposte-redditi/titolo-i/capo-i/art2.html. ↩
9. Emiliano Marvulli, "Svizzera fuori dalla black list per le persone fisiche: novità dal 2024", Informazione Fiscale, 3 August 2023, https://www.informazionefiscale.it/svizzera-paesi-black-list-persone-fisiche-novita-2024 (Decreto ministeriale 20 luglio 2023, Gazzetta Ufficiale no. 175 of 28 July 2023, adopted under Law no. 83 of 13 June 2023). ↩
10. Agreement between Italy and Monaco on the exchange of information on tax matters, signed in Monaco on 2 March 2015; Monaco's participation in the Common Reporting Standard from 2018 under its agreement with the European Union of 2016. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of אוגוסט 2025.