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. The principality is home to 38,682 residents,[11] of whom 9,486 are Monégasque nationals;[12] it is widely recognised as one of the wealthiest and most expensive places in the world.[13][14] The official language of the principality is French. In addition, Monégasque (a variety of Ligurian), English and Italian are spoken and understood by many residents.[c]

With an area of 2.08 km2 (0.80 sq mi), Monaco is the second-smallest sovereign state in the world, after Vatican City. Its population of 38,367 in 2023 makes it the most densely-populated sovereign state in the world, trailing only the dependency of Macau. Monaco also has the world's shortest coastline, measuring just 3.83 km (2.38 mi).[15]

The principality is about 15 km (9.3 mi) from the border with Italy[16] and consists of nine administrative wards, the largest of which is Monte Carlo.

The principality is governed under a form of constitutional monarchy, with Prince Albert II as head of state, who wields immense political power despite his constitutional status. The prime minister, who is the head of government, can be either a Monégasque or a French citizen; the monarch consults with the Government of France before an appointment. Key members of the judiciary in Monaco are detached French magistrates.[17] The House of Grimaldi has ruled Monaco, with brief interruptions, since 1297.[18] The state's sovereignty was officially recognised by the Franco-Monégasque Treaty of 1861, with Monaco becoming a full United Nations voting member in 1993. 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 railway connection to Paris.[19] Since then, Monaco's mild climate, scenery, and gambling facilities have contributed to the principality's status as a tourist destination and recreation centre for the rich. In more recent years, Monaco has become a major banking centre and has sought to diversify its economy into the services sector and small, high-value-added, non-polluting industries. Monaco is famous as a tax haven, as the principality has no personal income tax (except for French citizens) and low business taxes. Over 30% of the residents are millionaires,[20] with real estate prices reaching €100,000 ($116,374) per square metre in 2018. Monaco is considered a global hub of money laundering, and in February 2023 was placed under review by the intergovernmental Financial Action Task Force watchdog, with the threat of being placed on its 'grey list'.