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Monaco, a Principality located on the French Riviera, has long been appreciated by wealthy individuals around the world. Its pleasant climate, its sumptuous living environment and its 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 euros in a Monegasque bank to obtain a bank certificate, necessary to obtain a resident card, if they do not work and do not generate money. This rule has recently sparked debate within the Monegasque banking community, with some believing that this threshold should be considerably raised.
Concerning future residents with a professional activity, they will be able to present an employment contract, documents attesting to the possession or management of a company, the assumption of responsibility by a third party.
In this article, we will examine the reasons behind this rule and the arguments for and against its increase.
Before explaining why the threshold of 500,000 euros was introduced, it is important to understand the motivations that led the Monegasque authorities to implement this rule. The Principality of Monaco has a very high cost of living, especially with regard to rents in the free sector. The authorities therefore considered it necessary to require arrivals without regular income to justify that they have sufficient financial means to live in Monaco without working.
Another factor to consider is the high cost per square meter in Monaco. Real estate is extremely expensive, and every square meter 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 itself, that 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.
Before the introduction of this threshold, each bank could set its own amount for the bank certificate, which created a great disparity. Some institutions required deposits as low as €100,000, while others required one or even two million. This diversity of practices could be confusing for clients and could attract unwanted residents. This is why the Monegasque Association of Financial Activities (AMAF) has set a common amount of 500,000 euros, which has been accepted by all relevant actors.
However, recently, Monegasque bankers questioned this threshold of 500,000 euros. They believe that it is too low compared to the considerable fortunes who wish to settle in Monaco. Some suggest significantly increasing this amount, 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.
Currently, there is no consensus within the Monegasque financial centre on increasing this threshold. Some are in favour of the status quo, while others want an increase. No one seems to be looking at reducing or removing this requirement. For now, there is no imminent change to be expected, but the debate continues. One thing is certain: this rule will remain at the centre of discussions in Monaco, as it affects both financial issues and the Principality's international reputation. If you are thinking of becoming a resident in Monaco, our agency is at your disposal to put you in touch with bank advisors and assist you in the search for accommodation, whether you want to buy or rent.
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