Monaco country profile - Overview
- 17 March 2015
- From the section Europe
Monaco is the second-smallest independent state in the world. It is a playground for tourists and a haven for the wealthy, the former drawn by its climate and the beauty of its setting and the latter by its advantageous tax regime.
The country - a constitutional monarchy - is surrounded on three sides by France and occupies just under two square kilometres (0.75 sq mile) of the Cote d'Azur, where the Alpes Maritimes meet the Mediterranean.
Tourism drives Monaco's economy; gamblers flock to the Place du Casino in Monte-Carlo and every May the principality hosts the Monaco Grand Prix.
The country is a major banking centre and closely guards the privacy of its clients.
But it has also been the focus of French concerns about its tax policy and has been accused of tolerating money-laundering - claims it strongly denies.
The principality was identified as a tax haven by the International Monetary Fund (IMF) in 2003. It was subsequently placed on the OECD's blacklist of uncooperative tax havens, remaining there until 2009.
Monaco does not levy income tax on its residents.
The royal dynasty, the Grimaldi family, is inseparable from Monaco's existence.
The royals made world headlines in 1956 when the former monarch Prince Rainier III married the American film star Grace Kelly. But the personal lives of the couple's daughters, Caroline and Stephanie, had a less welcome press.
Within the executive, the monarch nominates and is represented by a Minister of State who leads a five-member Council of Government which governs Monaco under royal authority.
A 24-member National Council to which elections are held every five years exercises legislative power.