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Tax Haven Raises 2006 Entry
Price
By Roger Munns
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| This article
was published in the January 2006 issue of the Offshore Real Estate Magazine
for EscapeArtist.com © Copyright 1996-
EscapeArtist Inc. All Rights Reserved |
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| While
Monaco is a well known European tax haven, Andorra has remained little
known outside of the financial community - despite enjoying the same tax
advantages and arguably more private banking than her better known rival.
In contrast
to the similar financial benefits both Monaco and Andorra residents enjoy,
the two small countries have quite different climates.
Monaco has good all year
round weather and is located next to the French Rivera, while Andorra is
in the Pyrenees and between early December and late April attracts nearly
ten million tourists for ski holidays. Monaco has year round tourists,
peaking twice a year in May for the Grand Prix, and September for the Yacht
Show.
Neither Andorra or Monaco
have their own airports - Nice airport has a helicopter link, a ten minute
ride direct to Monaco, Andorra is not so fortunate and the nearest airport
is Barcelona, a three hour drive away from the principality.
Both countries have opted
to stay out of the EU, preserving their ability to maintain a no income
tax policy.
The biggest difference is
the entry price for becoming a resident - which entails buying or renting
a house or apartment.
One bedroom apartments in
Monaco start at 800,000 Euros, but in Andorra the same size apartment starts
at less than a third of the price at 250,000 Euros. And while a house in
Monaco is a rarity, there is a good choice of houses for sale in Andorra,
with prices starting at under a million Euros.
Rising Prices
- Given Andorra's property price advantage for would-be residents choosing
between Europe's primary tax havens, it has come as a surprise to many
that the closing costs for buying a property in Andorra has not only been
less than half that of Monaco, but also less than buying a property in
many other mainland European countries at around four and a half per cent.
But Andorra
has just raised property closing costs by introducing a three and a half
per cent sale of goods and services tax on property purchases from January
1, 2006 - bringing the tax haven more in line with neighbouring France
and Spain. |
| One of the
world's greatest and most challenging motor-racing events, the Monaco Grand
Prix is the last 'street course' remaining in the Formula One calendar.
- Staged around the narrow, winding streets of Monte Carlo, the attraction
of the Monaco Grand Prix is the proximity of the speeding Formula One cars
to the race spectators. The twisting 78-lap circuit offers countless opportunities
over the 263-kilometre race to witness the thrill of screaming engines,
smoking tyres and the genius of the drivers on a course that allows no
margin for error. - Since the first Monaco Grand Prix was staged
on the 14 April 1929, the fastest average race speed has risen from 80
kilometres (50 miles) per hour to 142 kilometres (88 miles) per hour. |
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Demand for
property in Andorra and Monaco is unlikely to be affected by the recent
increases though, according to European tax haven specialists Tribune Properties.
'Andorra and
Monaco have historically seen an increase in property activity and residency
applications when taxes are increasing elsewhere. The new German government
has recently increased the top rate of income tax and the United Kingdom
has seen an increase in the number of indirect taxes, making the zero per
cent personal income tax both Andorra and Monaco offer an attractive preposition
to high income earners.
Andorra's property
inflation has been over ten per cent annually for the last three years,
and when the 2005 figures are released we would expect it to be four years
in a row, with no sign of a leveling off of demand for the year ahead.
With Andorra
and Monaco's high speed cable and broadband internet access more and more
company owners are moving their residence to low and no tax countries and
running their companies from a distance geographically, while being able
to share information with their head office in real time'.
As well as
buying a property in Andorra or Monaco, both countries require residency
applicants to establish a local bank account and deposit around 50,000
Euros (Andorra) or 100,000 Euros (Monaco), take out private health insurance,
and to live there for six months of the year.
| With more than 300 days a year of
sunshine, residents in Monaco can take advantage of the Mediterranean,
and all of its seaside activities. Moreover, Monaco's close proximitiy
to the Southern Alps, which are only 1 hour away by car, allows for easy
access to the ski slopes. Residents in Monaco, representing 108 different
nationalities, can place their children in different schools which are
either a part of or affiliated with the Ministry of Education. The presence
of communication infrastructures puts the Principality only 2 hours away
from the main European capitals, This same infrastructure allows a dense
population of financial establishments to respond to the demands of an
exacting clientèle. These points combined with the complete absence
of taxation and the climate of total security are what make Monaco such
a haven. |
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For details
of hotels in Monaco, Monaco’s weather, a map of Monaco, the Grand Prix
and direct contact details for the Hotel de Paris, Columbus Hotel and others
visit yourmonaco.com. |
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