7 political and economic facts
Political Focus
The political system of the Principality of Monaco is defined by the 1962 Constitution, which establishes a hereditary and constitutional monarchy. It guarantees the separation of powers and citizens’ rights.
Executive power is exercised by the Prince, assisted by the Minister of State and Government Councillors. Legislative power is shared between the Prince and the Conseil National , comprising 24 members elected for a five-year term. Judicial power is delegated by the Prince to the courts and tribunals.
Monaco also has a Mayor , who heads the municipal executive, and a Municipal Council of 15 members elected for a four-year term.
7 facts about the economy
The Principality has a sustainable economic model and strikes a balance between the market economy and the welfare state.
1. In 2024, the Principality’s Gross Domestic Product (GDP) exceeded the €10 billion mark for the first time, reaching €10.28 billion, confirming the strength of its economic model. Since 2014, GDP has grown by nearly 50 per cent. Over the same period, global growth stood at 27 per cent, 14 per cent in the eurozone and around 10 per cent in France.
The top five sectors contributing to GDP are:
- scientific and technical activities, administrative and support services
- financial and insurance activities
- wholesale trade
- construction
- accommodation and food services
Per capita GDP now exceeds 100,000 euros and is set to grow by 6.2 per cent in real terms in 2024.
2. Since the19th century, Monaco has been financed mainly through revenue from monopolies, a 20 per cent VAT on consumption, a tax on the profits of certain companies, and transfer and inheritance duties. The only direct tax levied in the Principality is the tax on profits from industrial and commercial activities. Below are the top five sources of government revenue:
- commercial transactions (VAT)
- property sector (all income from rental properties and revenue from public car parks)
- commercial profits (profit tax)
- legal transactions (transfer duties, etc.)
- the financial sector (income from securities, bank interest)
3. The Principality is one of the few states with no public debt. Budget surpluses recorded over the years have been channelled into a reserve fund. Established by the 1962 Constitution, the Constitutional Reserve Fund (FRC) is the Monegasque state’s reserve. This fund exceeded the €7.2 billion mark at the end of 2024. Where necessary, the FRC provides cash advances to the State budget.
4. Although Monaco is a non-EU country, the Principality is effectively part of the European customs territory, and the intra-Community VAT regime has applied to Monaco since 1993. Monaco also forms a customs union with France. Apart from France, its main trading partners are Italy, Germany and the United Kingdom.
5. Monaco is one of the few countries in the world not to levy income tax. This unique system has been in place since 1869, following the secession of the municipalities of Roquebrune-Cap-Martin and Menton. Monaco thus regained its independence whilst losing 80 per cent of its territory, depriving the state of its agricultural land and its main sources of revenue. A new economic model had to be built. It was against this backdrop that Prince Charles III commissioned the construction of the Casino and the Opera House (see above).
6. Monaco has successfully developed centres of excellence in several fields, and the digital sector is a key driver of growth in its own right. The Principality has succeeded in becoming an attractive hub for start-ups and offers several support structures for them. MonacoTech and Monaco Boost , backed by the Prince’s Government, are among the best known, offering a collaborative workspace, expert advice and support for business development. The government also offers various forms of financial support, whether in the form of grants, tax exemptions or funding for innovation projects through the Blue Fund.
7. Monaco, small in size but big on dynamism, is home to leading economic players. The Principality is home to renowned companies such as Boutsen Aviation , APM Monaco , Monte-Carlo Société des Bains de Mer , SBM Offshore , Banana Moon , Giraudi and Sabrina Monte-Carlo , all of which contribute to its international reputation. Monaco fosters a thriving ecosystem, attracting talent and investors, whilst remaining a symbol of excellence and expertise.