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. As of February 2007, Monaco had Europe's most expensive real estate, ahead of even London. 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 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.

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

It is TAX HEVEN! The State has no income tax for individuals. 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.

The Organisation for Economic Co-operation and Development (OECD) issued in 1998 a first report on the consequences of the tax havens financial systems. Monaco does not appear in the list of these territories until 2004, when OECD became indignant regarding the Monegasque situation and denounces it in its last report(as well as Andorra, the Principality of Liechtenstein, Liberia and the Republic of the Marshall Islands) underlining its lack of co-operation as regards financial information disclosure and availability.

In 2000, the Financial Action Task Force (FATF) underlined that Monaco suffers a great lack of adequate resources[3]. The Principality is no longer blamed in the FATF 2005 report, as well as all other territories in 2006.

Since 2003, the International Monetary Fund (IMF) has identified Monaco, along with 36 other territories, as tax havens.

The Council of Europe also decided to issue reports naming tax havens. 22 territories, Monaco included, were thus evaluated between 1998 and 2000 on a first round. Monaco is the only territory that refuses to perform the second round, initially forecast between 2001 and 2003, whereas the 21 other territories are implementing the third and last round, planned between 2005 and 2007