To put it simply: taxes. There is no income tax, capital gains or real estate tax.
This low tax rate has attracted the uber-wealthy to the region. Beyond the financial incentives, the year-round mild climate, central European location and high-profile events make it somewhat of a playground for those willing to splash the cash.
Only Value Added Tax (VAT) being charged at a standard 20 per cent rate. Yet for some goods and services such as hotels, restaurants and water – a reduced VAT rate of 10 per cent is charged instead.
Other celebrities from all walks of live also live there, such as: Bono, Novak Djokovic, Ringo Starr and Shirley Bassey.
How much does it cost to live there?
With space at a premium, a reported average price of €50,000 (£43,000) per square metre makes Monaco home to the most expensive real estate in the world.
And for those wanting to visit for a race weekend, things don’t get any better.
Monaco’s Port Hercule has 760 berths for yachts to moor up in, yet the average €1,200 price per day rockets up to €3,500 – with the most expensive spots costing an eye-watering €100,000 for five days.
For those without a grandstand ticket, it is possible to watch the race from a private terrace overlooking the track. A ticket for Saturday and Sunday in these exclusive vantage points could set you back as much €5,000.
How much money goes through Monaco on a race weekend?
Monaco's local economy is boosted by a reported €102million over the course of a race week - with a staggering €68million of that being spent in the final four days alone.
Through its hotels, yachting berths, nightclubs, casinos, restaurants and anything else guests can find to splash their cash on; Monaco receives a seismic boost to their finances during a race week.
And the upside for the hosts - they hardly pay a penny for the privilege of putting on the event.
Although the exact fee that Monaco pay to hold the race is unknown - and even rumoured to be zero by some - it is thought that they pay just 10 per cent of the cost incurred by other locations.
Places such as Singapore, Abu Dhabi or Austin pay in the region of €23million to €32million to host an F1 race, while Monaco's €100million-plus economic boost is virtually theirs to keep in its entirety.
Is Monte Carlo a part of Monaco?
Yes, while Monaco itself is the entire principality, Monte Carlo is one area of Monaco.
Monaco has four traditional quarters: Monaco-Ville, Fontvieille, La Condamine and finally the most famous of them all – Monte Carlo – home to the world-famous Monte Carlo Casino.
For a sport that is no stranger to luxury, F1 certainly doesn’t get much more luxurious than race weekend in Monaco.
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