• The International Law Journal Editorial Board

International Investment Law in Monaco

Aggiornato il: 23 nov 2020

International Investment Law governs relations between foreign investors. International Investments is also the main factor contributing to the richness and fame of the Principality of Monaco

UNCTAD world investment report 2020 made it clear that international investments in 2019 are worth $ 1.54 trillion and that they are the largest source of external finance in developing countries. The dynamics in the principality of monaco takes up this ideology. The principality of monacio has in fact historically always had a particularly favorable regulatory system for safeguarding its wealth. The principality, in fact, long before Dubai and Hong Kong, in the spotlight in the tax heaven, which became rich for slightly different reasons, developed in the footsteps of the principality. Monegasques, French, Italians, and then Russians, Arabs, Americans and, in rapid growth, Chinese and exponents of the other emerging economies of the Far East (especially from India and Malaysia). But why everyone in Monaco? A double factor contributes to Monegasque wealth, on the one hand the absence of taxation on real estate, on the other hand the taxation on companies and on accounting secrecy that make it a historical tax haven. Investments, therefore, in the real estate market, flow inexorably as the dividends on the capital gain are not taxed, up to occupying every precious square meter, requiring others, where nature does not allow it, on the sea, as with the project in the larvotto area.

Corporate taxation takes place according to the same scheme, no taxation for companies that have a profit of 75% realized within the principality and 33% for all the others. But is this enough to define the Principality as a tax haven? Above all, it must be said that the taxation of companies strongly penalizes international companies that do international business outside the principality. In fact, a taxation identical to that of the rest of France is applied to these, a principle contrary to the idea of ​​a tax haven. To this is added the discussion on fiscal secrecy. In fact, it would seem that the principality of monaco is dealing with European regulation, a farther like Switzerland had to do years ago, and that this condition represents a proud but awkward attachment of the Monegasque institutions, including the judicial ones, to a now obsolete system, certainly not comparable to the american one, or that of the chinese wall- based Hong kong.

Finally, Monaco is not part of the European Union nor of the Eurozone, so it inevitably remains behind for the affairs relating to free trade and services, fluid in the rest of Europe, and which make the principality seem unacceptably retrograde. Ultimately, history is different from the present, investment law has put in place tools, prerogatives, which, if they are sufficient for the real estate market, do not fully satisfy a more dynamic world, more international than the one that has contributed to make Montecarlo rich and above all famous, and if this does not affect its wealth, however, it involves the loss of position with respect to emerging Middle Eastern or Far Eastern countries, such as China, but also Vietnam and Korea

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