You’ve heard Monaco has no income tax. That’s true but it’s not the whole story.

While Monaco residents pay zero personal income tax on salaries, dividends, and capital gains, relocating to the Principality can paradoxically increase your tax burden on international investments. Without double taxation treaties with major economies like the United States or Switzerland, Monaco residents face withholding taxes of 30-35% at source on foreign dividends (double what residents of France or the UK pay).

This is one of the most misunderstood aspects of Monaco taxation, and understanding these nuances is critical before making your relocation decision. Here’s everything you need to know about Monaco’s tax system in 2026.

Zero Personal Income Tax: Monaco’s Signature Advantage

Monaco has maintained its zero personal income tax policy since 1869, making it one of the world’s most attractive destinations for high-net-worth individuals and international entrepreneurs.

Monaco residents are not taxed on:

• Salaries and employment income
• Dividends from any source
• Interest income
• Capital gains (on securities, real estate, and other assets)
• Director’s fees and bonuses

This applies to both Monaco nationals and foreign residents who establish tax residency in the Principality. However, achieving tax residency requires more than simply obtaining a residence permit (you must also qualify for and obtain a Monaco tax residency certificate).

The Hidden Tax Impact: Monaco’s Limited Double Taxation Treaty Network

Here’s where Monaco tax planning becomes complex. While the Principality has signed tax information exchange agreements with over 35 countries (including the United States, United Kingdom, Germany, Italy, and Australia), these are not double taxation treaties. They only facilitate information sharing between tax authorities, not tax relief.

Monaco’s Actual Double Taxation Treaties

As of 2026, Monaco has full double taxation agreements (DTTs) in force with only ten jurisdictions:

France (1963), Guernsey, Liechtenstein, Luxembourg, Mali, Malta, Mauritius, Qatar, Saint Kitts and Nevis, and Seychelles

Additional DTTs with Montenegro and the United Arab Emirates have been signed but await full implementation. This represents one of the narrowest treaty networks among European jurisdictions.

What This Means for Your Investment Portfolio

Without double taxation treaties, Monaco residents face significantly higher withholding taxes on foreign-sourced investment income:

United States: US-source dividends are subject to 30% withholding tax for Monaco residents, compared to just 15% for French or UK residents who benefit from bilateral tax treaties. If you hold a substantial US equity portfolio, you’re losing 30% of dividend income before it reaches your Monaco bank account (and you cannot reclaim this tax).

Switzerland: Swiss-source dividends face 35% withholding tax at source. Without a double taxation treaty, Monaco residents cannot recover any portion of this substantial tax burden, making Swiss investments considerably less attractive than they would be for residents of treaty countries.

For investors with diversified international portfolios, these withholding taxes can significantly erode returns. A Monaco resident might actually pay more total tax on their investment income than they did as a resident of France or the UK (despite Monaco’s zero personal income tax).

This is why sophisticated wealth planning is essential before relocating to Monaco. The Principality is most tax-efficient for individuals whose wealth is held through corporate structures, those with minimal foreign dividend income, or retirees who no longer depend on portfolio dividends for regular income.

Monaco Corporate Tax: What Business Owners Need to Know

Monaco does levy corporate income tax (the “Impôt sur les Bénéfices”), which applies to companies generating more than 25% of their revenue outside the Principality, at a standard rate of 25%. However, this tax can be significantly reduced through proper structuring, including payment of salaries and director’s fees (which are tax-deductible for the company and tax-free for recipients). Companies earning 75% or more of their revenue within Monaco are exempt from corporate tax entirely. Professional tax advice is essential to optimize your corporate structure and minimize exposure to this tax.

Read our complete guide to Monaco corporate tax rates and exemptions.

How to Establish Monaco Tax Residency

To benefit from Monaco’s zero income tax, you must establish both administrative residency and tax residency in the Principality.

Step One: Administrative Residency

Obtaining administrative residency requires proving sufficient financial resources, securing accommodation in Monaco (rental or purchase), and demonstrating a clean criminal record. The complete process typically takes 3-6 months and involves substantial documentation.

Learn the complete Monaco residency application process.

Step Two: Tax Residency Certificate

Once you hold administrative residency, you must obtain a Monaco Certificate of Domicile for Tax Purposes. This requires:

• Valid residence permit (carte de séjour)
• Proof of spending more than 183 days per year in Monaco, or having your center of economic interests in the Principality
• Documentation of your Monaco dwelling (rental agreement, property deed, utility bills)
• Any additional documentation requested by the Monaco tax administration to demonstrate genuine residence

The tax residency certificate is crucial for dealing with foreign tax authorities and financial institutions. Without it, your former country of residence may continue to claim tax jurisdiction over your worldwide income.

Complete guide to obtaining your Monaco tax residency certificate.

Special Rules for French Nationals: The 1963 Tax Treaty

French citizens face unique challenges when relocating to Monaco due to the bilateral Franco-Monegasque tax convention signed on May 18, 1963.

Who Pays French Tax Despite Monaco Residency

According to Article 7 of the 1963 treaty, French nationals who move to Monaco after October 13, 1957 remain subject to French income tax as if they continued to reside in France. This includes worldwide income from all sources: salaries, dividends, interest, capital gains, and business income.

The treaty was specifically designed to prevent French citizens from using Monaco as a vehicle for tax avoidance, given the Principality’s proximity to France and historical ties between the two nations.

French Nationals Who Are Exempt

The following French nationals are exempt from French taxation and benefit from Monaco’s zero income tax:

• French nationals who established Monaco residency before October 13, 1957, and have maintained continuous residence
• Individuals born in Monaco who have always lived in the Principality (confirmed by a French Council of State ruling in April 2024)
• Monegasque nationals
• Spouses of Monegasque nationals
• French nationals married to individuals who established Monaco residency before October 13, 1957
• Other specific cases outlined in the bilateral convention

Tax Planning for French Nationals

French nationals considering Monaco relocation should engage specialized tax advisors in both jurisdictions. Non-compliance with French tax obligations results in substantial penalties, back-taxes, and interest charges. In many cases, obtaining alternative citizenship or maintaining genuine dual residency structures may be necessary to achieve tax optimization.

Complete guide to Monaco taxes for foreign nationals.

Is Monaco Right for Your Tax Planning?

Monaco’s zero personal income tax remains extraordinarily attractive for the right profile of high-net-worth individual. However, the Principality’s narrow double taxation treaty network and special rules for French nationals mean that Monaco tax residency is not automatically advantageous for everyone.

Monaco is typically most beneficial for:

• Entrepreneurs with operating companies based in Monaco or structured to minimize foreign revenue
• Retirees no longer dependent on dividend income from international portfolios
• Real estate investors focused on Monaco or treaty-country properties
• Family offices managing wealth through sophisticated trust and foundation structures
• Non-French EU citizens with substantial earned income rather than investment portfolios

Monaco may be less advantageous for:

• French nationals (unless qualifying for treaty exemptions)
• Portfolio investors with substantial US and Swiss equity holdings
• Business owners with primarily international operations (>25% foreign revenue)
• Individuals expecting to maintain significant income sources in non-treaty countries

Expert Monaco Relocation Assistance

At Monaco Relocation Group, we’ve successfully assisted entrepreneurs, high-net-worth individuals, professional athletes, and cryptocurrency investors with Monaco tax residency for years. Our local presence and extensive Monaco contacts enable us to guide clients through the complex administrative and tax residency processes.

If you’re considering Monaco relocation and want expert guidance on whether the Principality suits your specific tax profile, contact us at [email protected] or through our contact page.

Download our comprehensive free report: “The Definitive Guide to Living and Paying Taxes in Monaco” for detailed information on Monaco’s complete tax framework, residency requirements, and lifestyle considerations.

Sources & Further Reading

• Official Monaco Tax Information
• Monaco Corporate Income Tax
• Monaco Tax Agreements
• Monaco Life: Tax Obligations Guide