A minimum amount to pay in Monaco
Why it takes 500,000 euros to live in Monaco
Monaco, a Principality located on the French Riviera, has long been appreciated by wealthy individuals around the world. Its pleasant climate, sumptuous living environment and attractive tax regime make it a place of choice to live. However, since 2017, a rule has been introduced that requires newcomers to make a minimum deposit of €500,000 in a Monegasque bank to obtain a bank certificate, which is necessary to obtain a residence card, if they are not working and generating money. This rule has recently sparked debate within the Monegasque banking community, with some believing that this threshold should be significantly increased.
As for future residents with a professional activity, they will be able to present an employment contract, documents attesting to the ownership or management of a company, the assumption of responsibility by third parties.
In this article, we will look at the reasons behind this rule and the arguments for and against its increase.
The €500,000 threshold: a compromise
Before the introduction of this standardized threshold, each bank had the freedom to set its own minimum amount required to issue a bank certificate, which led to a considerable disparity between different financial institutions. Some banks set a minimum deposit requirement from €100,000, while others demanded much higher sums, such as €1 million or two million. This variety in banking practices could easily confuse customers, creating uncertainty and potentially attracting residents who were not wanted in the principality. To address these issues and standardize the market, the Monegasque Association of Financial Activities (AMAF) has decided to set a common amount of €500,000, a figure that has been accepted by all parties involved in the financial sector.
Why is a minimum sum required?
Before explaining why the €500,000 threshold was introduced, it is important to understand the reasons that led the Monegasque authorities to implement this rule. The Principality of Monaco has a very high cost of living, especially when it comes to rents in the free sector. The authorities have therefore deemed it necessary to require that arrivals without a regular income prove that they have sufficient financial means to live in Munich without working.
A key aspect of obtaining residency in Monte Carlo is to demonstrate that you have adequate accommodation within the Principality. In many cases, in fact, the purchase or rental of a property in Monaco is an essential requirement to successfully start the residency application process. Owning an apartment or villa, or showing a valid and long-term lease, not only attests to one's housing stability, but also helps to demonstrate a serious commitment to integration within the Monegasque social and economic fabric. This choice, which involves careful financial planning, can be decisive in meeting the criteria provided for by local law and consequently obtaining the status of resident in the prestigious urban context of Monte Carlo.
To obtain residency in Monte Carlo, we have written a dedicated article. To sum up, there are different types of residence permits, such as the temporary residence permit and the ordinary residence permit, each with specific requirements in terms of financial resources, accommodation and length of stay. Generally, the minimum age to apply is 16 years old, however younger applicants may need to be accompanied by their parents or legal guardians. The Principality requires proof of sound financial assets and the ability to maintain adequate economic stability over time, often attested by the creation of local bank accounts or the opening of a private bank account, as well as the presentation of a rental or purchase contract for a property as proof of accommodation. For foreign nationals who wish to undertake the process, the advice of an immigration specialist can be invaluable, helping to correctly interpret the residency regulations and prepare the necessary documentation. This includes obtaining a residence permit, presenting certificates issued by the competent bodies, as well as participating in an official residency interview with the Monegasque authorities, a crucial step in demonstrating one's intention to integrate into the social, economic and cultural fabric of the Principality. The entire process, if approached carefully and professionally, allows you to meet the requirements for residency, thus ensuring access to a privileged status in one of the most exclusive urban contexts in the world.
One of the most relevant aspects for those wishing to obtain residency in Monte Carlo is the timeline required to complete the application procedure. Typically, the entire administrative process, from gathering the required documents to assessing it by the competent authorities, can take up to six months. However, the timeframe may vary depending on the individual complexity of the case, the financial resources demonstrated, the speed with which additional information or additional documentation can be provided, and the type of residence permit requested. To speed up the process and avoid delays, it can be extremely useful to seek the advice of professionals specialized in immigration to Monaco, who can guide applicants through the different bureaucratic steps, correctly interpret local regulations and suggest the most effective strategies to obtain residency in the shortest possible time.
The price per square meter in Monaco
Another factor to consider is the high cost per square meter in Munich. Real estate is extremely expensive and every square metre must be profitable. The authorities want to ensure that wealthy individuals who wish to settle in Monaco deposit part of their assets in a Monegasque bank. This ensures, in a way, that those who benefit from Monaco's security, health system, living environment and sunny climate also contribute to the country's economic development. In themselves, they contribute to the country's economy by consuming and spending. Places are limited and the Principality cannot accommodate everyone due to its limited area.
The debate on raising the thresholds
However, recently, Monegasque bankers have questioned this threshold of €500,000. They believe it is too low compared to the considerable fortunes they wish to settle in Monaco. Some suggest increasing this amount significantly, or even making it a percentage of the newcomer's overall fortune. This proposal aims to ensure that those who settle in Monaco invest a significant part of their wealth there.
There is currently no consensus within the Monegasque financial centre on raising this threshold. Some are in favor of the status quo, while others want an increase. No one seems to be trying to reduce or remove this requirement. For now, no imminent change is to be expected, but the debate continues. One thing is certain: this rule will remain at the center of discussions in Monaco, as it concerns both financial issues and the Principality's international reputation. If you are thinking of becoming a resident of Monaco, our agency is at your disposal to put you in touch with bank advisors and assist you in finding accommodation, whether you want to buy or rent.
Differences between residence and citizenship
To understand more about residency it is important to understand the difference between residency in Monaco and Monegasque citizenship. It is essential to understand that these are two distinct legal concepts, with significantly different legal, practical and temporal implications. Obtaining residency in Monaco, for example through a residence permit, involves above all financial requirements, the presentation of valid identification documents, a criminal record without significant convictions and the submission of a special application to the public security authorities. This status allows you to live permanently in the Principality, enjoy an advantageous tax regime and access local services, but it does not automatically confer the same political rights or privileges as Monegasque citizens. Indeed, Monaco citizenship requires a longer and more complex process: in addition to a minimum period of residence (which can extend up to ten years), it is necessary to demonstrate a strong connection with the Principality, meet stricter criteria in terms of morality, economic stability and integration into Monegasque society. In addition, the Principality of Monaco does not allow dual citizenship, which means that those who wish to become Monegasque citizens may have to renounce other citizenships they hold. While residency in Monaco is obtained relatively shorter, with documentation focused mainly on proof of assets and personal references, the acquisition of citizenship involves a lengthy process, which includes in-depth checks, checks of moral integrity and the ability to fit harmoniously into the cultural, social and economic life of the country. Ultimately, residency offers access to a series of practical and tax advantages related to living permanently in Monte Carlo, while Monegasque citizenship guarantees a full legal status, including political rights, privileges and responsibilities of a true citizen of the Principality.
One of the main reasons why people from all over the world obtain residency in Monte Carlo lies in the extremely favorable tax regime: the Principality does not apply income tax to individuals, nor to wealth or capital gains, allowing residents to enjoy considerable tax optimization. This advantage, combined with the country's political and economic stability, ensures a safe and reliable environment in which to grow one's investments and maintain a high standard of living. Added to these conditions is an unparalleled quality of life, characterized by a cosmopolitan environment, a mild and sunny Mediterranean climate, as well as the presence of health services, infrastructures and sports facilities of the highest level. Monte Carlo, with its exclusive events such as the Formula 1 Grand Prix, the Monaco Yacht Show and prestigious luxury boutiques, offers a rare and opulent lifestyle, in which networking with influential individuals, successful entrepreneurs and international investors proves to be particularly fruitful. Ultimately, residence in Monaco is not only a tax advantage, but a springboard towards a life richer in opportunities, comfort and refinement.
