[8] Monaco, situated on the French coast of the Mediterranean Sea, is a popular resort, attracting tourists to its casino and pleasant climate.

The state retains monopolies in a number of sectors, including gambling, tobacco, the telephone network, and the postal service.

[9][citation needed] Economic development was spurred in the late 19th century with the opening of the rail link to France and the Monte Carlo Casino.

The absence of a personal income tax in the principality has attracted to it a considerable number of wealthy "tax refugee" residents from European countries who derive the majority of their income from activity outside Monaco;[18] celebrities such as Formula One drivers attract most of the attention, but the vast majority of them are less well-known business people.

In 2000, a report by the French parliamentarians, Arnaud Montebourg and Vincent Peillon, alleged that Monaco had lax policies with respect to money laundering, including within its famed casino, and that the government of Monaco had been placing political pressure on the judiciary so that alleged crimes were not properly investigated.

[19] In 1998, the Organisation for Economic Co-operation and Development (OECD) issued a first report on the consequences of the tax havens' financial systems.

Monaco did not appear in the list of these territories until 2004, when OECD became indignant regarding the Monegasque situation and denounced it in its last report, as well as Andorra, Liechtenstein, Liberia and the Marshall Islands, underlining its lack of co-operation as regards to financial information disclosure and availability.

[20][21][22] In June 2024, due to concerns about money laundering and terror financing, the FATF added Monaco to a list of countries "under increased monitoring."