At the opening of Monaco’s new consulate in London recently, Prince Albert of Monaco acknowledged the important contribution British people are making to his country, and said he would like to see more in the Principality.
Best known as Europe’s premier tax haven and home to the Monaco Grand Prix, the number of Britons living in the world’s second smallest country has risen dramatically as the British economy has prospered, and multi millionaires have seen Monaco as a natural place to live, with no income tax and a high level of personal security.
Prince Albert is particularly keen to see British entrepreneurs move to Monaco, but one travel guide for the country doesn’t think Prince Albert has fully thought through his ideal scenario.
‘Prince Albert said recently that he welcomes British entrepreneurs moving to Monaco, but that he wouldn’t be distributing leaflets on London’s streets to get more to do so. But he is missing the point. The costs involved in moving to Monaco are prohibitively high, even compared to London standards, and if he is serious about British talent moving to Monaco while we don’t expect Monaco to remove the financial barriers he could move to lower the bar a bit at least.’
One of the most obvious examples the guide points to that makes moving to Monaco cost prohibitive is the price of a property.
‘Monaco and London compete for the most expensive real estate in the world’, they say, but closing costs in Monaco are higher than London at over ten per cent. A basic one bedroom apartment in Monaco is around a million Euros, but British entrepreneurs don’t all live in London, and you try telling someone in Wales that property costs in Monaco and where they live now is roughly the same – they’re not.’
Typical property prices in Monaco at the moment include a second floor studio apartment at 1,100,000 Euros, a one bedroom apartment in Monte Carlo at 2,150,000 Euros, and a three bedroom two bathroom apartment at 5,500,000 Euros.
As well as buying a property, to gain residency in Monaco a bank account needs to be opened in the Principality, with account opening deposits varying between 100,000 and 500,000 Euros.
Concluding on the comparitive costs between the UK and Monaco for enterpreneurs, the Monaco guide comments:
‘People in London have the choice to move out of the capital to lower cost housing areas in the Home Counties and beyond. The same is not true of Monaco which is only a square mile in size, any more than that and you’re in France and Monaco’s tax advantages disappear. If Prince Albert is serious about wanting British entrepreneurs rather than just being diplomatic he needs to put some initiatives in place.’
Previously a relatively small group of Monaco residents, the number of British people living in Monaco has doubled in the last two years since 2005, with some 3000 now claiming residency in Monaco. But the British government is trying to stem the tide of their already wealthy citizens – rather than budding entrepreneurs – moving to the tax haven by cutting back on the amount of time they can spend outside of the UK.
Up until now a British taxpayer could avoid paying income tax by taking residency in a tax haven such as Monaco, and be allowed to spend 90 days a year in Britain before falling foul of the Inland Revenue. Importantly both the day of arrival and departure into the UK didn’t count as a day.
But all this is to change if the current Labour Government’s proposals in a recent budget statement get the green light, which they are expected to do. The changes could be implemented next year, and will mean that the day of travel and arrival into and out of the UK will count as full days, curtailing the amount of time tax exiles will be allowed back into the country in any given year – perhaps another reason why Monaco should make allowances for entrepreneurs moving from the UK to the Principality.
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