Monaco taxes for expats: rates, residency rules, and US filing in 2026

Monaco has no personal income tax, no capital gains tax, and no wealth tax for residents. For most nationalities, relocating to the Principality means keeping every euro you earn. The reality of taxes in Monaco is different for Americans.

The US taxes citizens and green card holders on worldwide income regardless of where they live, and because Monaco charges 0% on most income, the Foreign Tax Credit offers little relief.

The tax benefits of living in Monaco are substantial for non-US nationals – zero direct taxation, a stable legal framework, and a Mediterranean lifestyle built around a 2 km² microstate on the French Riviera.

For US expats, the benefits are real but conditional on proper planning. Without it, you may owe the IRS the same amount you would have owed living in New York – plus the cost of living in one of the most expensive real estate markets in the world.

Monaco consistently ranks among the top low-tax countries for expats, but that label can mislead Americans who assume 0% locally means 0% to the IRS.

Key takeaways

The following five points capture the core of what US expats need to know before relocating. If you are still in the planning stage, our guide to becoming an expat walks through visas, logistics, and first-year tax basics.

• Monaco has charged no personal income tax since Prince Charles III abolished it in 1869. There is no capital gains tax, no wealth tax, and no annual property tax.
• Residency typically requires a deposit of at least €500,000 in a Monegasque bank, proof of accommodation for at least 12 months, and a clean criminal record.
• The main recurring cost for tenants is the 1% leasehold duty on rental contracts, calculated on annual rent and paid by the tenant.
• Corporate income tax of 25% applies only to businesses generating more than 25% of their revenue outside Monaco. Most locally focused companies pay 0%.
• Moving to Monaco for tax reasons does not eliminate US obligations. The Foreign Tax Credit is largely unusable in a zero-tax jurisdiction, making the FEIE the primary tool for reducing US tax on earned income – while investment income remains fully exposed to US rates.

Resident vs. non-resident in Monaco

Residency status determines whether you access Monaco's 0% personal income tax. The Principality draws a clear line between residents holding a carte de séjour and non-residents who may visit or conduct business without one.

Who is considered a resident of Monaco?

Monaco grants residency through the carte de séjour, which the government issues once you meet four conditions:

• Proof of accommodation – owning property or holding a lease of at least 12 months in the Principality.
• Financial sufficiency – banks typically require a deposit of at least €500,000 in a Monegasque bank account to support a residency application. This is a banking convention rather than a fixed legal minimum, and some banks expect more depending on the applicant's profile. The funds remain yours; this is a deposit, not a fee.
• Clean criminal record – a police certificate from your country of origin or most recent country of residence.
• Physical presence – residents must spend at least three months per year in Monaco. Authorities sometimes verify this through electricity bills, credit card activity, or telecommunications records.

The carte de séjour alone does not create tax residency. You also need a Monaco tax residency certificate, which the Department of Tax Services issues to confirmed residents. Together, these documents unlock the 0% personal income tax rate.

Non-residents and the “90-day loophole”

Non-residents who do not hold a carte de séjour fall outside Monaco's tax system entirely.

Some international business people use Monaco as a personal base while managing their time carefully across European jurisdictions to avoid triggering tax residency elsewhere. In the UK, the automatic non-residence thresholds under the Statutory Residence Test run as low as 16 or 46 days depending on recent UK residence history – not a flat 90 days.

In France, residency is determined by more than a day count; under Article 4B of the Code Général des Impôts, a person can be tax-resident if their household, main professional activity, or center of economic interests is located in France, regardless of how many days they spend there.

This strategy can work for non-US nationals. For US citizens, it offers no federal tax advantage. The IRS taxes worldwide income based on citizenship, not physical location, so rearranging your travel calendar across European countries does not reduce your US bill.

The French national exception (the 1963 bilateral treaty)

Under Monaco tax law, French nationals face a unique restriction. The Franco-Monegasque Tax Convention of 1963 provides that French citizens who cannot prove at least five years of continuous residence in Monaco before October 13, 1962 remain subject to French income tax as if they still lived in France.

In practice, this means any French national who moved to Monaco after approximately 1957 pays French income tax on worldwide income.

The 1963 convention with France remains Monaco's most significant bilateral tax agreement, but it isn't the only one – Monaco has signed a small network of double tax treaties with other countries and has separate tax information exchange agreements with dozens more, including the US.

The Principality has no tax treaty with the United States, which means US expats in Monaco cannot rely on treaty provisions to reduce their US liability.

Types of taxes in Monaco

The Monaco tax regime centers on the absence of direct taxation for individuals. The Principality generates revenue through indirect taxes – primarily VAT, registration duties, and a narrow corporate income tax – rather than personal income levies.

Personal income tax

The Monaco tax system has charged no personal income tax since Prince Charles III abolished it by ordinance in 1869, after revenue from the Casino de Monte-Carlo made the levy unnecessary. That position has held for over 150 years.

The Monaco personal income tax rate is 0% for all residents regardless of income level, source, or nationality – with the sole exception of French nationals governed by the 1963 convention. There are no filing requirements in Monaco, no withholding on wages, and no local returns to submit.

Capital gains tax for individuals

There is no Monaco capital gains tax on securities or real estate disposals for private individuals. Some competitor guides incorrectly state that property sales are taxed in Monaco – they are not. Private individuals selling real estate in the Principality pay no capital gains tax.

For US expats, this creates a specific problem. Because Monaco charges 0% on gains, there is no foreign tax to credit against US capital gains tax. You pay the full US rate – 0%, 15%, or 20% depending on income, plus up to 3.8% Net Investment Income Tax if applicable – with no offset.

Wealth tax

Monaco does not impose any wealth or net-worth tax. Unlike France's Impôt sur la Fortune Immobilière, which taxes net real estate assets above €1,300,000, Monaco places no annual charge on accumulated wealth regardless of size or composition.

Inheritance and gift tax

Inheritance and gift tax in Monaco applies only to assets physically located within the Principality – real estate, bank accounts, shares in Monegasque companies, and physical property situated in Monaco. The rate depends on the beneficiary's relationship to the deceased or donor.

Direct-line transfers between spouses, children, and parents are taxed at 0% in Monaco. Rates scale up to 16% for unrelated beneficiaries.

 

US expats who inherit assets located in Monaco should be aware that the US imposes its own estate and gift tax framework. The 2026 federal lifetime estate tax exemption is $15,000,000 per person under the One Big Beautiful Bill Act.

US persons receiving inheritances from abroad may also need to file Form 3520 if the amount exceeds $100,000 – the foreign inheritance tax reporting rules apply regardless of whether Monaco itself charges a tax.

Value Added Tax (VAT)

There is no separate Monaco sales tax. The Principality operates within a customs union with France and applies the French VAT system. The standard rate is 20%, with reduced rates of 10%, 5.5%, and 2.1% on specific categories of goods and services.

VAT is the Principality's largest revenue source, accounting for more than half of the government budget. Revenue collected in Monaco is shared with France under the customs union agreement.

Property taxes and the 1% rental duty

There is no annual Monaco property tax for owners – no property tax, no habitation tax, and no council tax equivalent. Once you purchase real estate, there is no recurring government charge on the property itself.

The main recurring cost for tenants is the 1% leasehold duty on rental contracts. This duty is calculated on the annual rent plus service charges and is legally the responsibility of the tenant, not the landlord.

Real estate transaction costs and stamp duty

Buying property in Monaco triggers a one-time registration duty of 4.75% of the purchase price for individuals and qualifying Monegasque civil companies (raised from 4.5% under Law No. 1.548, effective October 1, 2023).

Foreign companies and trusts that disclose their beneficial owners pay a 7.5% registration duty. Entities that don't meet beneficial-ownership disclosure requirements pay 10% (raised from 7.5% under the same law). Notary fees add approximately 1.5% on top of either rate.

New-build properties sold within five years of completion are subject to VAT at 20% instead of the standard registration duty on the sale – though since October 2023, these transactions still owe half the normal registration duty rate rather than being fully exempt from it. Secondary-market resale properties that do not qualify as new builds are exempt from VAT.

Business and corporate taxation in Monaco

The Monaco business tax framework applies only to companies with significant foreign-source turnover or intellectual property income. Most businesses operating entirely within the Principality pay no corporate tax at all.

Corporate income tax (Impôt sur les Bénéfices – ISB)

The current Monaco corporate tax rate is 25%, applying to companies that generate more than 25% of their revenue outside the Principality. Companies earning at least 75% of revenue within Monaco are fully exempt.

The tax was established under Ordonnance Souveraine n° 3.152 of March 19, 1964, and the rate was reduced from 33.33% to the current 25% in recent years to align with France's corporate tax rate.

Companies deriving income from patents, trademarks, or intellectual property licensing are subject to the 25% ISB regardless of their domestic revenue share.

Tax holiday and exemptions for new businesses

New businesses subject to ISB benefit from a graduated relief schedule over their first five years of operation:

 

This phased introduction allows new companies to reinvest early revenue before reaching the standard rate.

Taxation of patents, trademarks, and royalties

Companies that derive income from licensing intellectual property – patents, trademarks, manufacturing processes, and artistic or literary rights – are subject to the 25% ISB.

This applies even if the company generates most of its revenue within Monaco, because the nature of IP income triggers the tax independently of the geographic revenue test.

Dividend tax exemption

Monaco does not impose withholding tax on dividends paid by locally registered companies. This position has been in place since the ISB framework was introduced in 1964 and has encouraged foreign direct investment by allowing shareholders to receive distributions without a local tax charge.

For US expats, the absence of Monaco dividend withholding means there is no foreign tax credit available to offset US tax on those dividends. You pay the full US rate on dividend income.

Financial secrecy, compliance, and AML regulations

Monaco's financial privacy framework is one of the strictest in Europe, but international pressure has reshaped how that privacy works in practice. Banking secrecy laws remain on the books while automatic information exchange and FATF oversight now operate alongside them.

Banking secrecy and the Penal Code

Monaco's banking secrecy is protected under criminal law. Unauthorized disclosure of client financial information by a banking professional can trigger penal sanctions under the Monegasque Penal Code. This legal framework is one reason high-net-worth individuals have historically chosen Monaco for wealth management.

Banking secrecy does not, however, override international reporting obligations. Monaco participates in the OECD's Common Reporting Standard and exchanges financial account information automatically with CRS partner jurisdictions.

Monaco has no FATCA intergovernmental agreement with the United States; Monaco-based financial institutions instead report US account holders directly to the IRS under FATCA's own rules.

Anti-Money Laundering (AML) and transparency agreements

Monaco was placed on the FATF grey list in June 2024 for deficiencies in its anti-money laundering and counter-terrorism financing framework. As of June 2026, the FATF has determined that Monaco has substantially completed its corrective action plan. An on-site assessment must still be completed before formal removal from the list.

By December 2024, Moneyval rated Monaco compliant with 39 of 40 FATF recommendations. The Principality signed the CRS 2.0 protocol with the EU in October 2025, extending automatic exchange of financial account information to digital currencies and electronic money products beginning January 1, 2026.

Tax rates in Monaco compared to the US

Every Monaco tax rate for individuals is 0%, but US citizens residing in Monaco still pay US federal rates on worldwide income because the FTC cannot offset tax that was never charged.

How US expats in Monaco avoid double taxation

Living in a zero-tax jurisdiction creates the opposite of the typical double-taxation problem. Instead of paying tax twice, US expats in Monaco have no foreign tax to offset against their US liability.

The challenge is reducing US tax when the FTC – normally the most powerful tool for expats in high-tax countries – provides little or no benefit.

Citizenship-based taxation and the “zero-tax trap”

US citizens must file federal tax returns regardless of where they live. Because Monaco charges 0% income tax, the Foreign Tax Credit cannot offset US tax on passive income – dividends, interest, capital gains, and rental income are all fully taxable at US rates with no credit available. This is the FTC trap that catches US expats in zero-tax jurisdictions.

The FTC requires foreign income tax actually paid. No Monaco tax paid means no credit to claim on Form 1116. Earned income can still be sheltered through the FEIE, but everything else hits the US return at full rates.

US expats who find this burden unsustainable sometimes consider renouncing citizenship. That decision triggers its own tax consequences, including the potential exit tax for covered expatriates.

TFX covers the full process, costs, and final filings in our guides to renouncing US citizenship and the US exit tax.

Using the Foreign Earned Income Exclusion (FEIE) in Monaco

The FEIE allows qualifying US expats to exclude up to $130,000 (tax year 2025) or $132,900 (tax year 2026) of foreign earned income from US taxable income.

To qualify, you must maintain a foreign tax home and pass either the Physical Presence Test – 330 full days in foreign countries during any 12-month period – or the Bona Fide Residence Test, which requires genuine foreign residence for at least one full tax year.

The FEIE covers only earned income: salary, wages, commissions, and self-employment income from services performed abroad. It does not cover dividends, interest, capital gains, rental income, or pensions.

Based on a TFX client scenario: a US consultant working from Monaco earns $120,000 in salary and $40,000 in investment income during tax year 2025. The $120,000 salary qualifies for the FEIE if all tests are met. The $40,000 in investment income does not – and is fully taxable at US rates with no FTC offset.

The FEIE qualification tests, exclusion limits, and Form 2555 filing steps are the same in Monaco as in any other foreign country.

US expats with mixed income should also compare the FEIE vs. Foreign Tax Credit before choosing, and review strategies for reducing US tax in low-tax countries.

FBAR and FATCA compliance for Monaco bank accounts

US expats holding financial accounts in Monaco must file FinCEN Form 114 if the aggregate value of all foreign accounts exceeds $10,000 at any point during the year. Form 8938 is required separately if specified foreign financial assets exceed the FATCA thresholds.

Most US expats in Monaco trigger both FBAR and Form 8938 – the €500,000 residency deposit alone generally exceeds both thresholds.

 

Non-willful FBAR penalties reach up to $16,536 per report for assessments on or after January 17, 2025. Willful violations carry penalties of the greater of $165,353 or 50% of the account balance.

The differences between FBAR and FATCA matter for filing strategy, and the Form 8938 and FBAR thresholds are not interchangeable – filing one does not satisfy the other.

State tax residency and breaking “sticky state” ties

US expats from states like California, New York, and Virginia should formally sever state residency ties before relocating to Monaco. Some states continue taxing worldwide income until domicile is clearly broken, and the FEIE is a federal tool that does not reduce state tax.

Common triggers that keep state residency alive include a retained driver's license, active voter registration, property ownership, a mailing address, days spent in the state, and the location of a spouse or dependents. Breaking these ties with documentation before your move is far cheaper than fighting a state tax audit afterward.

US citizen in Monaco? Your investment income is fully exposed to IRS rates.

Get started

Most popular US tax forms for US expats in Monaco

US expats in Monaco generally file some combination of the following forms each year:

• Form 1040 – US individual income tax return, required for all US citizens and green card holders with worldwide income above the filing threshold.
• Form 2555 – claims the Foreign Earned Income Exclusion on qualifying earned income up to $130,000 (tax year 2025) or $132,900 (tax year 2026).
• Form 1116 – claims the Foreign Tax Credit on any income where foreign tax was actually paid. Limited usefulness in Monaco given the 0% rate, but relevant if you also earn income in a taxed jurisdiction.
• FinCEN Form 114 – FBAR, filed with FinCEN if aggregate foreign account balances exceed $10,000.
• Form 8938 – FATCA reporting, filed with your Form 1040 if specified foreign financial assets exceed the applicable thresholds.

When are taxes due? Filing deadlines for US expats

US tax is due April 15 regardless of where you live. The payment deadline does not move even when the filing deadline does.

 

Monaco has no personal tax filing deadlines because there is no personal income tax. Corporate ISB returns follow the fiscal year and are administered by the Department of Tax Services under the Ministry of Finance and Economy.

Optimize your Monaco expat tax strategy with TFX

Monaco is an excellent choice for lifestyle and wealth preservation, but it does not exempt US citizens from the IRS.

The 0% tax rate actually makes planning more important, not less – because the FTC cannot offset tax that was never paid, your US bill on passive income is higher than it would be in a country that taxes you locally.

The right time to plan is before you move. Structuring your income, timing asset sales, and confirming your FEIE eligibility in advance can reduce your first-year US bill by tens of thousands of dollars.

FREE

Zero Monaco tax means zero FTC – get a clear US filing plan before you move.

Schedule my free call