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Novak Djokovic, the celebrated Serbian tennis star, along with several of the ATP's top-ten players, have chosen the picturesque principality of Monaco as their primary residence. This choice isn't merely whimsical; Monaco's 500-acre enclave, nestled in the French Riviera, boasts over 300 sunlit days annually, proximity to major European cities, and easy access to elite training centers like the renowned Mouratoglou Tennis Academy.
However, beyond the allure of the Mediterranean sun and professional benefits, Monaco's tax-friendly environment proves irresistible for the world's elite athletes and billionaires. With no personal income, capital gains, or investment taxes, the savings for high earners are significant.
To contextualize, Djokovic, tennis' top earner, raked in an estimated $38.4 million in the past year. Residing in Monaco potentially saves him millions in taxes. The enclave doesn't only attract tennis professionals. Formula 1 racers, including Max Verstappen, Lando Norris, and Charles Leclerc, and billionaires from diverse industries, such as Everton F.C.
owner Farhad Moshiri, relish the fiscal benefits and luxury the principality offers.
Monaco Residency: Steps and Stipulations
Securing residency in Monaco is relatively straightforward for European and Swiss nationals: secure a dwelling, maintain a minimum balance of €500,000 in a local bank, possess a clean criminal record, and pass a security interview.
Americans, however, need a long-term French visa as a precursor. Yet, there are caveats. U.S. citizens are subject to an expatriation tax regardless of their global residence. Moreover, athletes competing internationally must pay taxes in the countries where they earn their prize money.
For instance, should Djokovic clinch a victory at the 2023 U.S. Open, he won't owe a dime to Monaco but will be beholden to the IRS. While Monaco's tax relief is alluring, international tax consultant Dr. Andreas Bosse cautions that the benefits may not always be as substantial as they appear.
However, for many, the combined charms of Monaco's climate, world-class facilities, and tax breaks are too compelling to resist.
