Tax Optimization Between Luxembourg and Monaco
Why the Luxembourg–Monaco Tax Treaty Offers Exceptional Opportunities for French Taxpayers
The tax treaty between Luxembourg and Monaco creates particularly attractive opportunities for French individuals seeking to optimize their tax situation legally and securely. This framework can be especially beneficial for those considering a relocation, a property investment, or the creation of a company.
1. Luxembourg Tax Residency: A Strategic Advantage
French nationals may obtain Luxembourg tax residency by establishing a genuine residence in Luxembourg — including, in certain cases, through the purchase of an apartment.
Once tax resident in Luxembourg, individuals can potentially benefit from a more favorable tax regime while avoiding French taxation on certain types of income, provided legal residency criteria are met.
2. Creating a Company in Monaco With Luxembourg Tax Benefits
Thanks to the Luxembourg–Monaco treaty, it is possible to operate a business in Monaco without being subject to Monegasque taxation, under certain conditions.
This structure may allow taxpayers to maintain Luxembourg residency while conducting commercial activities in Monaco, optimizing both personal and corporate taxation.
3. Why French Citizens Are Increasingly Interested
For French nationals facing high tax pressure, this combination offers several advantages:
- More flexible tax residency rules
- No personal income tax in Monaco
- A stable and attractive Luxembourg tax environment
- Legal certainty provided by the bilateral treaty
4. A Legal Strategy — Not Tax Evasion
The treaty does not permit tax evasion.
It offers legitimate solutions for taxpayers who follow the rules of effective residence, corporate substance, and economic coherence.
An expert assessment is essential to ensure:
- tax residency is valid and legally recognized
- the structure used is compliant with both countries’ regulations
- France cannot argue an abusive arrangement
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I assist clients in France, Luxembourg, Monaco and internationally with the secure implementation of cross-border tax strategies.
