TL;DR. For most HNWIs in 2026, Andorra and Monaco compete on the same question: how much real tax do I pay, and what does it actually cost to get there? Monaco offers a 0% personal income tax for non-French residents but no formal “investment threshold,” with effective entry costs typically EUR 1.0M–2.5M+ once bank deposit and Monégasque housing are included. Andorra has a 0–10% IRPF, a 10% flat corporate tax, 0% wealth/inheritance/gift/exit taxes, and a clearly codified passive residency at EUR 1,000,000 investment plus a EUR 50,000 state fee under Llei 2/2026. Monaco wins on headline personal income tax. Andorra wins on cost certainty, corporate flexibility, ten-year capital-gains exemption, and total cost of entry. French nationals cannot benefit from Monaco’s tax regime due to the 1963 Franco-Monégasque convention; Andorra has no such carve-out.
Andorra vs Monaco at a Glance (2026)
| Category | Andorra | Monaco |
|---|---|---|
| Personal income tax | 0–10% (IRPF, Llei 5/2014) | 0% (except French nationals, taxed in France) |
| First EUR 24,000 of income | Exempt | 0% |
| Income above EUR 40,000 | 10% | 0% |
| Corporate tax | 10% flat (Llei 95/2010); 2% special regimes | 25% (since 2025 reform) on profits, with exemptions for purely Monégasque-revenue companies |
| Capital gains tax (shares 10+ years) | 0% | 0% |
| Wealth tax | 0% | 0% |
| Inheritance tax (direct line) | 0% | 0% |
| Gift tax (direct line) | 0% | 0% |
| Exit tax | 0% | 0% |
| VAT | 4.5% (IGI, Llei 11/2012) | ~20% (aligned with France) |
| Minimum investment (codified) | EUR 1,000,000 (Llei 2/2026) | None codified; ~EUR 500,000–1,000,000+ bank reference deposit in practice |
| Non-refundable state fee | EUR 50,000 | None |
| Property entry cost (typical) | EUR 800,000 minimum (Llei 2/2026) | EUR 1,000,000–10,000,000+ (market reality) |
| Physical presence to maintain | 90 days/year | 3 months/year + housing in Monaco |
| Time to permit | 3–6 months | 2–4 months |
| Double Tax Agreements in force | 22 (including UK, France, Spain, Germany) | ~35, including with France |
| Population | ~80,000 | ~38,000 |
| Currency | EUR | EUR |
| EU member | No (close customs alignment) | No (in EU customs and VAT via France) |
How Much Personal Income Tax Will I Actually Pay?
Monaco has no general personal income tax for residents who are not French nationals. According to Monaco’s official residency framework, an individual who establishes habitual residence in the Principality (and is not a French citizen) is not subject to Monégasque income tax on worldwide salary, investment income or capital gains. The 1963 Franco-Monégasque convention requires French nationals living in Monaco to remain French tax residents and pay French income tax on worldwide income, unless they were already resident in Monaco before 1957.
Andorra applies IRPF under Llei 5/2014 on a progressive scale: the first EUR 24,000 of annual income is exempt, the bracket from EUR 24,001 to EUR 40,000 is taxed at 5%, and income above EUR 40,000 is taxed at 10%. There is no ceiling: a resident earning EUR 5,000,000 of salary still pays 10% on the portion above EUR 40,000. Dividends from Andorran companies are exempt from IRPF in the hands of resident individuals.
On personal income tax alone, Monaco is more attractive for high-salary or high-dividend non-French HNWIs. For most realistic earning profiles, however, the difference is between paying 0% in Monaco and an effective ~9.7% in Andorra — meaningful, but not the only variable.
How Do Corporate Structures Compare?
Andorra has a 10% flat corporate income tax (IS) under Llei 95/2010, with a minimum effective rate of 3% achievable through specific reliefs. Special regimes for intra-group holding, IP exploitation and international trading reduce the effective rate to as low as 2% on qualifying activities. There is no minimum capital requirement above EUR 3,000 for a standard SL.
Monaco reformed its corporate tax in 2025 to comply with the OECD/G20 global minimum tax: a 25% rate now applies to Monégasque companies whose more than 25% of turnover is derived from outside Monaco. Companies generating revenue principally inside Monaco can still benefit from significant exemptions. VAT in Monaco is harmonised with France at standard 20%.
For HNWIs who run an internationally-revenue-generating company alongside their personal residency — funds, family offices, IP-holding entities, international consulting — Andorra’s 10% flat IS and 4.5% IGI structurally beat Monaco’s 25%/20% combination.
What Are the Real Entry Costs?
Monaco does not impose a codified minimum investment. In practice, the residency application requires a bank reference letter, which Monégasque private banks issue only against a deposit. Most banks set this informally at EUR 500,000, and several private banks at EUR 1,000,000 or more depending on the client’s profile. Applicants must also prove housing in Monaco — either ownership or a rental lease. Given that Monaco property is among the world’s most expensive (typically EUR 50,000–100,000 per square metre in prime areas, and rental at EUR 5,000–15,000+ per month for a modest family flat), the practical floor for a credible Monaco residency is in the EUR 1.0M–2.5M range in liquid plus housing cost.
Andorra’s framework is codified. Llei 2/2026 (Llei Òmnibus 2), published in BOPA No. 15 on 12 February 2026, requires a qualifying investment of EUR 1,000,000 — typically EUR 800,000 in Andorran real estate plus EUR 200,000 in Andorran securities, public debt or insurance, or alternatively EUR 400,000 to a dedicated alternative housing fund. The applicant must also pay a one-time non-refundable EUR 50,000 contribution to the Andorran state, plus EUR 12,000 per dependent. Property Investment Tax (IEI) of 6% applies to a non-resident’s first Andorran property purchase (10% on additional properties).
A like-for-like Andorra vs Monaco entry budget for a family of four looks approximately like this. Andorra: EUR 800,000 home + EUR 200,000 investment + EUR 50,000 state fee + EUR 24,000 dependents + EUR 48,000 IEI + EUR 15,000 professional fees = EUR 1.137M, of which EUR 800,000 is real estate (asset) and EUR 137,000 is true cost. Monaco: EUR 1,000,000 bank deposit (asset) + EUR 1,200,000 housing purchase or EUR 80,000/year rent + EUR 25,000–40,000 professional fees = EUR 2.225M+, of which the bank deposit and property are assets but the property carries Monaco’s high carrying costs.
On total cost of entry, Andorra is materially cheaper for the same level of formality.
How Does Physical Presence Compare?
Both jurisdictions require real physical presence. Andorra’s passive residency requires a minimum of 90 days per calendar year physically in Andorra; tax residency for IRPF purposes requires 183 days or the centre of economic interests in Andorra. Monaco residency requires the holder to spend at least three months per year in Monaco and maintain a Monégasque address as a primary home.
Neither is a “paper residency.” Both jurisdictions cooperate with OECD and EU exchange of information frameworks, and home-country tax authorities (HMRC in the UK, AEAT in Spain, DGFiP in France) routinely test the sufficiency of presence and the cessation of ties.
What About Capital Gains, Wealth, Inheritance and Gift Taxes?
Both jurisdictions are competitive here. Both apply 0% wealth tax, 0% inheritance tax in the direct family line, 0% gift tax in the direct line, and 0% general exit tax. Both are zero-rated on capital gains on long-held shares in the hands of resident individuals. Andorra’s specific rule (Llei 5/2014) is that gains on shares held more than ten years are exempt from IRPF. Real estate gains in Andorra are taxed on a sliding scale that reaches 0% after twelve years of ownership.
Monaco has historically applied small inheritance tax rates outside the direct line (4% to siblings, up to 16% to non-relatives), and Andorra applies 0% across the board.
Which Has the Better Treaty Network?
Monaco has approximately 35 double tax and information-exchange agreements in force in 2026, including with France (the cornerstone of Monaco’s tax architecture). Andorra has 22 double tax agreements in force in 2026, including with the UK, Spain, France, Portugal, Luxembourg, Germany, the Netherlands, the UAE, and most recently Estonia. The Andorra–UK treaty is particularly important for UK HNWIs post-non-dom abolition. The Andorra–Spain treaty is critical for Spanish HNWIs given Andorra’s geographic position.
Treaty count is not the only metric. Quality, withholding caps, tie-breaker clarity and the presence of a Principal Purpose Test all matter. Both networks are OECD-aligned and modern in their core provisions.
Which Should I Choose?
The decision rarely comes down to a single tax line. In our practice, the pattern is clear: Andorra is preferred by HNWIs running internationally-active operating companies, founders post-exit who want certainty over a 10-year holding horizon, families with corporate structures who value the 10% IS over Monaco’s 25%, and individuals who want cost certainty and a codified path. Monaco is preferred by HNWIs whose income is entirely personal-investment yielding (salary, dividends, interest) and whose net worth is comfortable enough that the EUR 2M+ effective entry cost is irrelevant, or by individuals who specifically value Monaco’s social and security positioning.
French nationals should note that Monaco does not deliver a tax saving relative to France due to the 1963 convention — Andorra is the relevant alternative for French HNWIs.
Frequently Asked Questions
Is Monaco really 0% tax?
For non-French residents, Monaco has no personal income tax, no wealth tax, no inheritance tax in the direct line and no general capital gains tax. Corporate tax of 25% applies to companies whose more-than-25% of revenue is derived outside Monaco. VAT is approximately 20%, aligned with France.
Can French citizens benefit from Monaco’s tax regime?
No. Under the 1963 Franco-Monégasque tax convention, French nationals resident in Monaco remain French tax residents and are taxed in France on worldwide income. The exception applies to French nationals already resident in Monaco before 13 October 1957. Andorra has no equivalent restriction for French nationals.
Is Andorra really only 10% maximum tax?
For personal income tax (IRPF) yes — the top marginal rate is 10% on income above EUR 40,000, and the first EUR 24,000 of income is exempt. For corporate income tax (IS) the standard rate is 10%, with special regimes at 2%. IGI (VAT) is 4.5%. There is no wealth, inheritance, gift or exit tax.
Which is faster to obtain — Monaco or Andorra residency?
Monaco’s standard timeline is 2–4 months from a clean application to a Carte de Séjour. Andorra’s passive residency timeline is 3–6 months. The variance in both cases depends on completeness of documentation and time to complete the qualifying investment.
Do I need to learn the local language?
Catalan is Andorra’s only official language but Spanish, French and English are widely used commercially and professionally. Monaco’s official language is French, and operational fluency in French is generally expected for daily life and administrative interactions, although English is common in private banking.
Can I move from Monaco to Andorra (or vice versa) later?
Yes. Both residencies are revocable by the holder. Sequencing matters for tax residency tests, treaty tie-breakers and any unrealised capital gains. In our practice, an explicit timeline plan is essential before changing residency a second time.
Sources
- BOPA — Butlletí Oficial del Principat d’Andorra: https://www.bopa.ad
- Llei 2/2026 (Llei Òmnibus 2), BOPA No. 15, 12 February 2026
- Llei 5/2014, de l’impost sobre la renda de les persones físiques (IRPF): https://www.portaljuridic.ad
- Llei 95/2010, de l’impost sobre societats (IS): https://www.portaljuridic.ad
- Llei 11/2012, de l’impost general indirecte (IGI): https://www.portaljuridic.ad
- Govern d’Andorra: https://www.govern.ad
- Autoritat Financera Andorrana (AFA): https://www.afa.ad
- Monaco Gouvernement — Résidence à Monaco: https://en.gouv.mc/A-Living-in-Monaco/Becoming-a-Monegasque-resident
- Convention fiscale franco-monégasque du 18 mai 1963: https://www.impots.gouv.fr
- Monaco — Direction des Services Fiscaux: https://www.gouv.mc/Gouvernement-et-Institutions/Les-Institutions/Le-Gouvernement-Princier/Departement-des-Finances-et-de-l-Economie/Direction-des-Services-Fiscaux
Next Steps
If you are choosing between Andorra and Monaco for a 2026 relocation, the cost-of-tax modelling matters more than headline rates.
[Calculate Your Tax Savings →] Use our Andorra Tax Savings Calculator to compare your current personal and corporate tax bill against the Andorran framework over five and ten-year horizons. The calculator handles dividend income, capital gains and corporate profit separately.
[Book a Free 30-Minute Consultation →] Speak with Josep Fusté Badana — ICLG Contributing Author on Andorran Private Client Laws and Regulations — about which jurisdiction fits your structure, family situation and timeline.
Author: Josep Fusté Badana — Senior Tax & Residency Advisor, Axior Global, SLU. ICLG Contributing Author — Private Client Laws and Regulations (Andorra). Licensed Tax Advisor — Principality of Andorra. Member, Andorran Association of Tax Advisors.
This article is for general information and does not constitute tax or legal advice. Monégasque tax positions are summarised from publicly available sources and are subject to French and Monégasque rules that may apply to your specific facts. Individual advice is required before any relocation.