Sunshine state that shelters the rich and famous
Tuesday 04 March 2008
Every Monday morning, at the Cote d'Azur airport in Nice, scores of BlackBerry-wielding businessmen await their weekly flight to London. They are possibly the most well-heeled commuters in the world.
Over the years, the numbers on the 8.55am Air France flight from Nice to City Airport in London have steadily grown and many of the new recruits are from Monaco. The principality has long been a playground for the leisured rich. But as flight times have shrunk and tax incentives multiplied, it has also become a home for home for Britain's working wealthy, who divide their time between the sunshine and the City.
It has never been difficult to understand Monaco's appeal. The state imposes no income tax on its residents. As a result, the principality has attracted Formula One drivers, business luminaries such as Sir Stelios Haji-Ioannou, the founder of easyJet, and film stars such as Sir Roger Moore. Not everyone is famous, but everybody is rich, and usually cashing in on wealth obtained elsewhere. A staggering 25,000 of Monaco's 32,000 population are expatriates. They occupy the world's most densely populated independent nation, sharing a territory of less than two square miles with 40 banks, which deal with 300,000 accounts. Then there are the casinos (in which local Monegasques are forbidden to gamble) and the clubs.
The costs of everyday living are exorbitant, although of course everything's relative. A glass of champagne can cost about €30 (£23). But few care. In fact the only cloud on the recent horizon has been the apparent determination of the EU, with Germany in the vanguard, to crack down on the gilded enclaves in which the continent's super-rich have managed to construct an insular paradise.
At the end of last month, it emerged that Prince Albert of Monaco, alarmed by the determination of the British and German authorities to pursue tax evaders in Liechtenstein, had agreed to open talks with Berlin over tax arrangements in the principality. The British Government has altered the rules that govern those Monaco residents who work part of the year in the UK, counting the days of travel to London and return to Monaco as days worked in Britain.
Ian Bradley, at Visit Monaco, still believes the future looks bright for Monaco. "We know that the lack of taxation is a huge attraction for wealthy commuters that live in Monaco and we'd be kidding ourselves if we said any different. But I don't think that's the only reason. Monaco is a great place to live and bring up a family. It is expensive, but not much more expensive than some parts of London.
"The 90-day rule changes might have a slight effect on the frequency of commuters, but I don't think people will suddenly leave Monaco. The lack of tax isn't the only reason they are here. Look at Liechtenstein. That has a similar tax status, but you don't see people flocking to live there. People come to Monaco because of what it can offer tax-wise and what it can offer lifestyle-wise."
If European governments get their way, that theory may be about to be put to the test.
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