Monaco, 0% tax, just a short train ride from Nice: on paper, it's the ultimate dream for many entrepreneurs, and especially for French nationals. In reality, two rules completely change the calculation, and they particularly affect the French. Here's why forming a Latvian SIA often meets the real need better, without Monaco's pitfalls.
The 25% rule: Monaco's 0% is rarer than you'd think
Monaco taxes company profits at 25% as soon as at least 25% of turnover is generated outside the principality, directly or indirectly. In plain terms: a consulting, e-commerce, or services company invoicing clients in France, Europe, or elsewhere almost always exceeds this threshold. Monaco's 0% really only applies to genuinely local activities, a neighbourhood shop for example, not the remote activities typical of those comparing Latvia and Monaco.
The most important point for French nationals
Unlike every other foreign resident in Monaco, French nationals remain in principle taxable in France on their personal income, under a bilateral France-Monaco agreement dating from 1963. Moving to Monaco therefore isn't enough, for a French national, to escape French income tax, contrary to what is sometimes implied. Latvia doesn't raise this issue at all: the SIA works without requiring any change to your personal tax residency.
The numbers-based comparison, point by point
| Criteria | Latvia (SIA) | Monaco |
|---|---|---|
| CIT | 0% reinvested / 20% distributed | 25% if >25% of turnover outside Monaco, otherwise 0% |
| Typical case (remote activity) | 0% reinvested | 25% in almost all cases |
| Home tax residency preserved | Yes, unconditionally | No for French nationals (1963 treaty) |
| EU / market access | Yes, direct | No (special agreements) |
| Formation time | 2 to 5 days | Several weeks to several months |
| Prior administrative authorisation | Not required | Yes, selective |
| Setup costs | Low | High (offices, capital, guarantees) |
Verdict
For a French national with a remote activity, Monaco almost never delivers the promised 0%: the 25% rule applies in nearly every case, and the France-Monaco tax treaty neutralises the personal advantage. Latvia offers a real 0%, without either of those pitfalls.
Advantages of Latvia and Monaco
Advantages of Latvia
- Real 0% on reinvested profits, with no local-activity threshold
- No impact on personal tax residency
- Fast, remote formation, no selective authorisation
- Direct access to the European single market
Advantages of Monaco
- Real 0% for a genuinely local activity
- Internationally recognised lifestyle and security
- No personal income tax for non-French residents
- Dense international business network in a small territory
Who Latvia is the best choice for
If you're a French national and your business invoices clients outside your place of establishment (the case for nearly all consulting, e-commerce, or remote service businesses), Latvia offers a genuinely accessible 0%, without calling your personal tax residency into question.
Who Monaco may suit better
Monaco still makes sense for a genuinely locally rooted activity (under 25% of turnover generated outside the principality), or for a non-French entrepreneur ready to genuinely relocate, with the means to invest in a Monaco structure and lifestyle.
"Monaco sells a 0% dream, but for a French national with a remote activity, that 0% almost never applies, neither to the company nor to their personal residency. It's the most misunderstood point in the whole comparison."
Frequently asked questions
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