Last year, the World Bank and EY released the per capita GDP of various countries based on 2022 data, and a common leader emerged: Monaco. Monaco's per capita GDP was confirmed to exceed $240,000 according to the World Bank and EY's estimates. In our currency, this amounts to over 318 million won annually, a figure that is beyond imagination. How is it that Monaco, a small country that doesn't seem particularly special and lacks resources like oil or gas, consistently ranks at the top in per capita GDP? 

Located on the southern coast of France along the Mediterranean, Monaco covers an area of just 2 square kilometers, making it smaller than Yeouido in Seoul. However, it has been a sovereign state and a member of the UN since 1993. In terms of area, Monaco is the second smallest country in the world, following Vatican City, and it is the smallest when considering only UN member states. Additionally, as of 2024, the population is estimated to be 38,500, which makes it the second highest in population density globally, following Macau.

When comparing only UN member countries, Monaco can be considered the highest in the world. Monaco became a sovereign state in 1861, as confirmed by the Treaty of Monaco with France. Interestingly, the current head of state is Albert, who has been ruling since 2005, but the head of government, the Prime Minister, can hold both Monaco and French nationality. Currently, the Prime Minister of Monaco is Didier Gamerdinger, who previously served as the Minister of Agriculture and Food in France. As a sovereign country, Monaco can establish and pursue an independent foreign policy; however, its defense is the responsibility of France, which also differentiates it from other countries. What economic activities is Monaco engaged in to build its wealth? According to the government's official statistics, as of 2022, Monaco's GDP was 8.34 billion euros, showing a robust growth of about 50% since 2013. In 2022, Monaco's GDP...

Looking at the composition by industry, we can see that scientific and technical administration and support services, finance and insurance, and wholesale trade account for nearly half of the wealth, with a share of 49.1%. Monaco has developed as a financial hub with banks and financial institutions, and as a tourist destination, it generates significant tourism revenue, symbolized by resorts and casinos. It also creates revenue through monopolies in various sectors, including tobacco, telecommunications, and postal services. Notably, approximately half of government revenue is derived from value-added tax. The trend of Monaco's historical per capita GDP has generally shown a steep upward trajectory. When records began in 1970, Monaco's per capita GDP was $1,278, making it the only country in the world at that time to exceed $10,000. By 1980, it surpassed $50,000, and in 2003, it recorded over $110,000, marking a historic milestone for humanity.

surpassed the $100,000 mark. Eventually, Monaco's per capita GDP soared to over $200,000 in just five years, showcasing a literally insane trend that left many people astonished. This figure for Monaco's per capita GDP in 2022 is roughly double the global average per capita GDP during the same period. Monaco began to appear at the top of the historical rankings for per capita GDP starting in 1970. Of course, it wasn't without competition. From 1970 to 1972, the United States emerged as a competitor, followed by the United Arab Emirates from 1973 to 1985. During those 16 years, the UAE managed to claim the top spot just four times, relegating Monaco to second place. Aside from that, Monaco consistently held the number one position. Starting in 1986, Liechtenstein emerged as Monaco's competitor for per capita GDP, but from 1986 to the most recent period in 2022, Monaco has consistently outperformed Liechtenstein.

For 37 consecutive years, Monaco has ranked first in the world in terms of per capita GDP, consistently holding the second position for a long time. From 1970 to 2022, Monaco was ranked second in per capita GDP for only four years, while it held the top spot for the remaining 49 years. This has led many people to perceive Monaco as a quintessentially wealthy nation. 

Since the reign of Charles III in 1856, Monaco's accessibility improved significantly when the railway was connected to France in 1858. During this time, Charles III allowed the establishment of the Monte Carlo Casino to attract more tourists, as Monaco was facing economic difficulties. In 1869, he implemented a tax policy that exempted Monaco's residents from income tax, which drew the wealthy from neighboring France, who began to flock to Monaco to benefit from its favorable tax regulations.

In 1962, French President de Gaulle imposed a blockade on Monaco. Nevertheless, Monaco still does not have an income tax and does not impose corporate or dividend taxes on local businesses, making it famous as a tax haven. Many wealthy individuals from around the world visit Monaco, and currently, it records one of the highest per capita GDPs in the world. According to a Bloomberg report in March of this year, the UK and Portugal are considering the abolition of tax benefits that were previously applied to wealthy foreigners. In the case of the UK, the aim was to eliminate these benefits and use the additional tax revenue for domestic citizens, thereby increasing support rates. Portugal's intention was to control inflation. In this context, Bloomberg noted that large asset holders are turning their attention to new tax havens, including Monaco among five worldwide. Currently, French citizens in Monaco are required to pay French income tax.

Excluding citizens and resident foreigners, there is no income tax, dividend tax, wealth tax, local tax, property tax, or capital gains tax. Similarly, there are no inheritance or gift taxes between parents and children or between spouses, as the tax rate is 0% for direct relatives. However, for individuals outside of these relationships, inheritance and gift taxes range from 4% to 16%. Notably, Monaco has a standard value-added tax rate of 20%. As for corporate tax, it is only imposed if it can be proven that more than 75% of the business revenue is generated in Monaco. If this cannot be proven, corporate tax may be applied to the profits at a maximum rate of 33.3%. This tax system in Monaco serves as an incentive to attract the wealthy and businesses, which is considered key to maintaining its unique per capita GDP. The average wealth of residents in Monaco is $2.1 million, and to be in the top 1% in Monaco, one must have assets of $12.9 million, a benchmark that is the highest in the world.

In terms of proportion, Monaco's total population is expected to reach 38,500 by 2024, with seven out of ten people being millionaires. There are over 200 individuals with assets exceeding 30 million dollars, which positions Monaco as one of the wealthiest countries in the world based on its demographic composition. Notably, there are six individuals with assets exceeding 1 trillion won, or over 1 billion dollars. So, who is the richest person in Monaco, a playground for the wealthy? As of September 17, 2024, the wealthiest person in Monaco is Stefano Pessina, whose net worth amounts to 5.12 billion dollars. He entered the U.S. market in 1977 and built a massive fortune as a wholesaler. He owns over 8,000 pharmacies, making him the owner of the largest pharmacy chain in the U.S., Walgreens, as well as the pharmacy chains Boots in the UK and Ireland. With the concentration of wealth in Monaco, the cost of living is significant, reflecting the high assets and incomes of its residents.

Looking at housing prices alone, they are extremely high. For example, when purchasing an apartment, the price varies depending on the location, but generally in central areas, it is priced between 50,000 to 95,000 euros per square meter. This corresponds to a substantial cost of about 165,000 to 313,500 euros per pyeong. Even for apartments located somewhat further out, the price is still around 42,000 to 75,000 euros per square meter, which is significant when calculated per pyeong. As for living expenses, they can vary greatly depending on spending habits, but according to Numbeo, the average cost for a typical family of four in Monaco is about 6,400 euros. This figure excludes costs such as rent and other housing expenses.

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