One of Monaco’s main sources of income is tourism; each year many are attracted to its casino and pleasant climate. In 2001, a major new construction project extended the pier used by cruise ships in the main harbour. The principality has successfully sought to diversify into services and small, high-value-added, non-polluting industries such as cosmetics and biothermics.

As befits a world leader in glamour and money, Monaco is one of the most expensive places on Earth. The principality is often regarded as a tax haven, and most of its inhabitants are millionaires from other countries. The glamour and prestige associated with Monaco and its style-conscious people can be seen in the number of high class cars, designer fashion boutiques such as Chanel, trendy restaurants, and its royal family, especially since the marriage of Prince Rainier to Grace Kelly, later HSH Princess Grace of Monaco.

The state has no income tax for individuals. The state retains monopolies in numerous sectors, including tobacco and the postal service. The telephone network (Monaco Telecom) used to be owned by the state; it now owns 45%, while the remaining 55% is owned by Cable and Wireless (49%) and Compagnie Monégasque de Banque (6%). It is still, however, a monopoly. Living standards are high, roughly comparable to those in prosperous French metropolitan areas.

The lack of personal income tax has led to a considerable number of wealthy “tax refugee” residents from European countries, who earn the majority of their income from activity outside Monaco; celebrities such as Formula One drivers attract most of the attention, but the majority of them are business people.

In 2000, a report by French parliamentarians Arnaud Montebourg and Vincent Peillon alleged that Monaco has lax policies with respect to money laundering, including within its famed casino, and that the government of Monaco puts political pressure on the judiciary so that alleged crimes are not properly investigated. In response, the Government of Monaco ordered reports to OECD and the Financial Action Task Force on Money Laundering. These reports revealed most of these allegations to be untrue.

Monaco is not a member of the European Union but is very closely linked to it via a customs union with France, and as such its currency is the same as that of France: the euro. Prior to 2002, Monaco minted their own franc coins, the Monegasque franc. Monaco has acquired the right to mint euro coins with Monegasque designs on their national side.