Monaco is known for being the home of a number of millionaires. 9 out of the 20 drivers in Formula 1 choose to stay in Monaco. But why is this?
Unlike other sports, Formula 1 has a total of only 20 athletes. Sports like football and basketball have thousands of players spread across multiple leagues around the world. Out of the 20 drivers, 9 of them stay in Monaco. These nine drivers are the top drivers in the sport right now.
Why do Formula 1 drivers prefer to stay in Monaco?
The reason most drivers choose to stay in Monaco is that there is no income tax. Income tax is a headache for everyone. And for someone who is getting paid in millions, they will be losing a lot in taxes. Monaco does not have any income tax, no wealth tax, no local tax, no property tax, and no capital gains tax. This is why Monaco is home to 12000 millionaires.
In a country like the United States, each of the drivers will have to pay 37% of their salaries as income tax. This cuts down their payday by a lot. This is why they stay in countries like Monaco.
Monaco is home to 9 of the 20 Formula 1 drivers:
• Lewis Hamilton
• Max Verstappen
• Charles Leclerc
• Lando Norris
• Valtteri Bottas
• Sergio Perez
• Nico Hulkenberg
• Nyck de Vries
• Alex AlbonThis is primarily because of three reasons.
Taxes: Monaco has no income… pic.twitter.com/Cr9Qg8MFbn
— Joe Pompliano (@JoePompliano) May 26, 2023
Since Monaco is mostly populated by Millionaires, Formula 1 drivers will not have too many fans stalking them. They won’t be standing out in public. Formula 1 drivers will basically blend in with the public. The government also requires written permission to take professional photographs in the country. This brings down the number of paparazzi following the drivers.
How you know it’s race week in Monaco 📸🛥
(via yvangrubski/IG) pic.twitter.com/yLxdMuQfyY
— ESPN F1 (@ESPNF1) May 24, 2023
Monaco is home to a beautiful coastline and is a neighbor to both France and Italy. This provides the citizens with breathtaking scenic views and makes it comfortable for them to take short trips to their neighbors.
After hearing these things, everyone wants to live in Monaco. However, there is a catch to staying there, at least for the average citizen.
Monaco’s financial loophole
Although Monaco sounds amazing, there is a financial loophole that the average citizen will find frustrating. Anyone choosing to reside in Monaco will have to deposit $535,000 in a local bank. This money cannot be moved until you move out of Monaco.
Fun Fact: To apply for residency in Monaco, you have to deposit $535,000 in a local bank, and it must remain there at all times during your residency period.
— Joe Pompliano (@JoePompliano) May 26, 2023
Average citizens who dream of living in places like Monaco will find it difficult to arrange this. However, half a million dollars is nothing for the average millionaire. Formula 1 drivers like Lewis Hamilton and Max Verstappen get paid up to $50 million per year. Instead of paying 37% of their salaries for income tax, they would rather pay the $535,000 which can be withdrawn upon leaving the country.
This rule is one of the main reasons that Monaco is filled with Millionaires.
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