Monaco, officially the Principality of Monaco is a small sovereign city-state located in Western Europe. The territory lies on the northern coast of the Mediterranean Sea and is completely enclosed by France. Monaco is often regarded as a tax haven, and many of its inhabitants are wealthy and from foreign countries, making up a majority of 84%. Monaco is a Constitutional Monarchy and Principality with Prince Albert II as head of state. The Grimaldi family has ruled over Monaco since 1297 and the state's sovereignty was officially recognized by the Franco-Monegasque Treaty of 1861. Despite being independent, Monaco’s defence is still the responsibility of France. Monaco is the world’s most densely populated sovereign country, and the world's smallest French-speaking country.
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. 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. Before 2002, Monaco minted its own franc coins, the Monegasque franc. Monaco has acquired the right to mint euro coins with Monegasque designs on their national side.
Monaco levies no income tax on individuals. 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; celebrities such as Formula One drivers attract most of the attention, but the vast majority of them are less well-known business people.
Grand Prix & Rally:
Since 1929, the Monaco Grand Prix has been held annually in the streets of Monaco. It is widely considered to be one of the most prestigious automobile races in the world, along with the Indianapolis 500 and the 24 Hours of Le Mans. The erecting of the circuit takes six weeks to complete, and the removal after the race another three weeks. The circuit has many elevation changes and tight corners, along with a tunnel. This together with being incredibly narrow make it perhaps the most demanding Formula One track. Only two drivers have ever crashed into the harbour, the most famous being Alberto Ascari in the 1955 Grand Prix (Ascari would lose his life four days later at Monza). The other was Paul Hawkins during the 1965 Grand Prix. The Monte Carlo Rally has been held since 1911, having originally been held at the behest of Albert I, Prince of Monaco, and is, like the principality's Grand Prix, organised by the Automobile Club de Monaco. It has long been considered to be one of the toughest and most prestigious events in rallying and since 1973 has been the opening round of the World Rally Championship.
Monaco has enjoyed a strong reputation for providing a wide variety of evening activities for all ages, ranging from its famous casino to one of the most extravagant and expensive nightclubs in the World, Jimmy'z situated on Avenue Princesse Grace. Recently, a number of competitors have sprung up, including Karement (forming a part of the Grimaldi Forum).