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Minimum Fund to Live in Monaco
There are many legends, rumours, and gossips related to the minimum fund you need to have to relocate to the Principality of Monaco. Some of them might tell you that it is a minimum of five million euros or even higher.
Many people believe that people who live in Monaco are all part of a big tax evasion fraud scheme. So, let’s clarify this in black and white: Tax evasion is a crime in many countries, however tax avoidance is not.
Tax avoidance means that it is within your rights to pay only the amounts required by law, and nothing more. Therefore, by choosing the Principality of Monaco as the place of your residency, you will be obliged to pay your tax based on the Monegasque law (which we all know offers zero personal tax, but requires other taxes).
The common belief is that you have to have at least one million euros to open a bank account in Monaco. This is not exactly true, because you can apply for residency for less than 20,000 euros, even if you do not have a job.
There are different ways to relocate to Monaco with or without money. Situations can arise where if you have a strong financial background, your application may not be granted. It is good to be clear in advance that the Principality of Monaco is not really a good place for commercial banking, even if a few banks offer these solutions.
However, the problem is not truly the financial part, it is the real-estate prices. The biggest challenge is to prove that you can pay your rent in the long term.
Monaco does not draw any line on how much funds you need to relocate and to live in the Principality. Despite all the expectations, it has never been regulated. The only thing that the government requests is a visible proof that you will have enough funds/income to maintain your living costs and residency once they accept your residence request.
This basically allows local banks and wealth managers to develop tailored approaches for individuals looking to relocate.
However, in May 2017, The Association Monégasque Des Activités Financières, or AMAF association, in Monaco recommended that its members ask for a minimum deposit of 500,000 Euro.
Many banks in Monaco are part of the AMAF, so these partners are most likely to ask for this 500,000 Euro minimum deposit.
The amount of capital required to relocate to Monaco can vary from the amount requested from banking institutions to open your bank account. The Monégasque Government requests visible proof from your bank that you have sufficient funds and income to maintain your living costs and residency once they accept your residence request.
Since Monaco highly respects the privacy of its residents, they will never ask how much money you have. They entrust the bank to declare (without disclosing your wealth) that you can pay your stay during the period of your Monaco residency.
Some banks are very selective, and they do not prefer smaller clients. The usual practice for big banks is 500,000 Euro, however some banks accept significantly smaller amounts as well. It is recommended to bring an independent advisor who represents your personal interests to partake in these negotiations.
I know some people who are living in Monaco with a very low income, paying less than 3,000 Euro per month. However, there is a big difference between living and LIVING in Monaco. You have to face the sad truth that a small budget will never allow you to fit into the high society.
Usually, it is said that you should consider moving to Monaco only when you can afford to spend 2,000 Euro for your monthly living expenses. This is also a main reason why Monaco usually welcomes individuals who have at least the minimum of 10 Million Euro in wealth. But again, the requested fund to live in Monaco is not regulated.
In the Principality of Monaco, 1 in 3 people are millionaires. This means the 66% of the country are from an average demographic. This is a very important fact because it is easy to forget that Monaco is not just a playground for the millionaires, it is much more than that.
Usually people are relocating via two ways:
- by being employed by a Monaco-based company, or
- by having enough money to live without work
The first one is quite obvious. However, the second one is a truly really exciting topic, since 99% of the residents do not come to Monaco to work, but to enjoy its multiple benefits.
In the Principality, you can fin almost one hundred banks and wealth managers. Most of them offer different conditions and services for you, most importantly, the handling and managing of your money. What is interesting, but not commonly known, is that you always have the power to negotiate your own conditions. Many banks and wealth managers are flexible when they see their interests in you.
Therefore, you might be able to open a bank account even from 150,000 Euro, down from the average of 500,000 Euro. However, the most important thing is that you need to convince your bank to ensure proof for your residence. The declaration for the residence proof should be a main decision criteria for you; otherwise, you can face some unpleasant surprises.
The bank proof for the Government never states the actual amount you have, just a note that you have a good financial condition to live and relocate to the Principality of Monaco. Since the Government is not interested in your financial status, you have great potential to create a perfect foundation to enter negotiations with your bank.
Obviously, you have to be careful with the differences and the values they offer you.
For example, there are banks that open bank accounts from 150,000 Euro, and for this amount they are ready to give you the financial proof for your residency. However, what you might realise later is that they can block your amount for payment security purposes until you leave the Principality. Therefore, you cannot use the amount for at least a year.
Many banks offer you possibilities of opening a bank account from 250,000 to 500,000 Euro. They also have their own limitations, which is usually something related to the service or the flexibility.
The big banks often welcome you with a minimum opening amount of 1,000,000 Euro. However, they rarely lock your amount; furthermore, many of them even prefer that you sign a clausal in your contract giving them the power of attorney, specifically that they are allowed to manage and reinvest your fund.
There are many small differences between services, therefore it is always beneficial to negotiate your own conditions. Many big banks will try to advertise their products and additional services to you, but at the end of the day, they can be really flexible in order to keep you and your wealth in their bank.
I would also be careful with the small opening amounts. Many banks have had negative results during the last years, therefore, if you remember my example about the “tree and its roots”, you have to see beyond the shining surface. I know it is weird but it is like gardening and producing juicy fruits… You cannot expect perfect fruits on your tree if the roots are damaged, rotten, or just simply unstable.
Dare to ask the bank to disclose their financial results (which is usually considered to be public information). After reviewing the financial indicators from the last three years you will have much better confidence to choose a bank. You do not have to be an accountant but you can clearly see the end results at the end of the years as well as the number of the clients they handle. These indicators can easily show you whether they are making increases or decreases in their activities.
I believe choosing a bank is a highly important decision since they will handle your savings which you earned by many years of hard work. And probably you do not want to open a bank account to lose your savings, but to increase it. Therefore, if they were unable to create results in the past for their current clients, then you have no guarantee at all that they will be the right partner for you.
I would really say that relocation is not just a matter of your wealth, but the choice of the right financial partner.
Relocating with sufficient funds
One of the most important steps is to open a bank account in Monaco in order to manage your daily living costs and also to successfully apply for the residence permit.
Opening a bank account can be done through a bank or wealth manager, if you have sufficient wealth. Alternatively, you can also open a commercial bank account, if you are employed by a Monaco-based company.
The Monégasque government does not check how much wealth you actually have, however, it requires a declaration – a written statement from your chosen bank that you have sufficient financial resources with which to live in the territory of Monaco.
Sufficient financial resources, by means of:
− A salary; or professional income (independent commercial activity or through a company); or
− Sufficient savings (the sum which is judged sufficient depends on the banking establishment in Monaco providing the reference); or
− Being supported by a relative, spouse, or partner with whom you are living as a couple
You might say that getting residency in Monaco is all about the bank certificate for which your wealth is a key factor. However, your wealth is not the only factor for a successful application.
One of the most important prerequisites needed to secure a residence permit by the Monégasque government is the ‘Certificate of good conduct’, widely known as good morality and a clean criminal record.
This is also the reason why when you move to Monaco, you are eligible only for a temporary residence permit. Normally within 3 months of the residency application request, the Monégasque government will double check your submitted documents and conduct an investigation into international criminal records. Also, during the first 3 months, the Monégasque Police initiates an interview with you as a potential new resident.
For many years, the Principality of Monaco has taken serious steps and led an active fight against money laundering, corruption, and terrorist financing. These steps often reach international levels as well.
The Principality of Monaco has created its own Financial Investigation Unit, called S.I.C.C. FIN (Service d’Information et de Contrôle sur les Circuits Financiers). The S.I.C.C. FIN works together on an international level with more than 130 countries around the globe. Its role is to suspend financial transactions carried out by professionals who are subject to legal matters.
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