Monaco , [ a ] officially the Principality of Monaco , [ b ] is a sovereign city-state and microstate on the French Riviera a few kilometres west of the Italian region of Liguria , in Western Europe , on the Mediterranean Sea. It is a semi-enclave bordered by France to the north, east and west. With an area of 2. Its population of 38, in makes it the most densely populated sovereign state. Monaco has the world's shortest national coastline: 3. The principality is governed under a form of constitutional monarchy , with Prince Albert II as head of state , who wields political power despite his constitutional status.
Key members of the judiciary are detached French magistrates. Despite Monaco's independence and separate foreign policy, its defence is the responsibility of France, besides maintenance of two small military units. Monaco's economic development was spurred in the late 19th century with the opening of the state's first casino, the Monte Carlo Casino , and a rail connection to Paris. Monaco has become a major banking centre and sought to diversify into the services sector and small, high-value-added , non-polluting industries.
Monaco is a tax haven ; it has no personal income tax except for French citizens and low business taxes. Monaco is a global hub of money laundering, and in June the Financial Action Task Force placed Monaco under increased monitoring to combat money laundering and terrorist financing.
Monaco is not part of the European Union EU , but participates in certain EU policies , including customs and border controls. Through its relationship with France, Monaco uses the euro as its sole currency. The principality has a club football team, AS Monaco , which competes in French Ligue 1 and has been French champions on multiple occasions, as well as a basketball team, which plays in the EuroLeague.
A centre of research into marine conservation , Monaco is home to one of the world's first protected marine habitats, [ 23 ] an Oceanographic Museum , and the International Atomic Energy Agency Marine Environment Laboratories, the only marine laboratory in the UN structure.
