F1, unlike other sports, has a very select number of stars on show at any one time. While soccer has countless teams and hundreds of star players, F1 only has 20 drivers for fans to follow at any one time. What many fans may be left wondering about F1 drivers is why so many of them live in Monaco.
The 8 reasons F1 drivers live in Monaco are:
- Financial reasons
- The location
- Community of drivers
Be it privacy, tax breaks, or just the amazing weather, it’s hard to find fault with drivers choosing to live in Monaco. The closeness to other European countries makes travel to races easier, too. In the article below, we’ll explore some of the reasons that so many F1 drivers live in Monaco.
The 8 Reasons F1 Drivers Live In Monaco
1. Financial Reasons
Taxes. Everyone pays them, but nobody wants to, and if we could find a way to pay less, we would. As the old saying goes “the only things in life that are guaranteed are death and taxes,” and while F1 drivers can’t do anything about their mortality, they can certainly do something about tax.
While many people can grumble about F1 drivers using Monaco as a tax haven, if put in the same position most people would probably do the same. When your annual earnings are in the many millions, avoiding paying income tax, capital gains tax, and wealth tax by setting up residency in Monaco seems like a no-brainer.
In order to keep their residencies in Monaco, drivers must reside in Monaco for at least 183 days out of every year. The Monaco Grand Prix helps on this front, as a driver can often get a few weeks in Monaco for one of the premier Formula One races.
Living in an environment where wealth, power, and prestige are in such abundance, F1 drivers living in Monaco can live their lives with a little more freedom than they would in other cities or countries. Being surrounded by other drivers, or other affluent and, at times, famous, neighbors means that a driver is less likely to be mobbed by fans in the street.
Being able to go to a restaurant or do your own grocery shopping may seem mundane to most people. But when you are one of an elite number of athletes − only 20 drivers are racing per F1 season − the press focus and the fan interest in everything the drivers do is immense.
Having the luxury of being able to switch-off when not traveling to races and being able to spend time with friends and family in an environment where personal privacy is respected is priceless. The fact that the drivers get to have this luxury in one of the most famous and beautiful principalities on Earth is just good fortune!
Monaco has one of the highest police-officers-to-citizen ratios on the planet. Monaco also has a high number of CCTV systems in place to keep residents feeling safe and secure. With so much money going in and out of Monaco, especially Monte Carlo, safety is a primary concern.
An excellent banking system, coupled with such a visible police presence, allows drivers to feel safe as both their finances and personal safety are taken care of in a very visible way. Crime rates are extremely low, as you would expect in a nation with one police officer for every 100 people (the USA has just over 2 per thousand people), which just adds to the appeal for F1 drivers.
If you’re going to be financially secure and well protected, you may as well do it in the sun. Monaco has some of the best weather available in Europe, exactly what you would hope for from a principality on the famous French Riviera.
With beautiful beaches and stunning sunshine all year round, Monaco is a haven in more ways than one. Sandwiched between the Alps and the Mediterranean Sea, Monaco is protected from the harshest of winters and profits from warm breezes and blue skies.
F1 drivers will struggle to find fault with how Monaco treats their finances, but they will also be able to revel in how it treats their spirits. The wide bay is perfect for sightseeing, is filled with stunning yachts, and is geared to make the most of the incredible weather that Monaco enjoys.
Monaco is incredibly small yet filled with amenities to supply its wealthy residents. Amazing restaurants offer some of the best food around, with the sea on its doorstep providing fresh seafood. Some of the most prestigious clothing brands have shops in Monaco, as you would expect, and drivers and their spouses have everything they need within this small yet well-stocked community.
Monaco has two shopping centers, as well as the La Condamine Market and Monte Carlo Market, providing the very best in clothing, cuisine, and culture. With so much wealth concentrated in one place, it’s no surprise Monaco is expensive to shop around in, but it offers absolutely everything for a price.
6. The Location
F1 drivers have over 20 races per season they must prepare for, travel to, and race at, and being in a central location has a lot going for it when you do the amount of travelling F1 drivers do. Monaco has Nice Cote d`Azur airport less than 20 miles away, which provides an easy way for drivers to get to and from their Monaco homes.
Another advantage of Monaco’s prime location is that since drivers must reside there for six months and one day per year, being able to get to and from races and back home relatively quickly makes sense from a residency standpoint.
Rapid integration when moving to a new country or region is a big help. Anyone who has ever moved somewhere a language barrier exists will know how difficult the simplest interactions can become. Being able to move to Monaco, stroll to a supermarket, and be able to immediately converse makes everything easier.
French is the official language of Monaco. Italian is also prominent, and the native Monegasque is a variant of Italian, although Monegasque is so rare it must be taught locally to preserve it. English is widely spoken as well, in part due to the high number of foreign nationals that reside there. With English being the predominant language spoken in F1, drivers can navigate comfortably in Monaco.
8. Community Of Drivers
With so many F1 drivers making the decision to reside in Monaco, there has been the chance for drivers to feel part of a community while there. From Lewis Hamilton to Max Verstappen, and from Monaco native Charles Leclerc to Daniel Ricciardo, Monaco has a thriving F1 community.
While some drivers prefer to distance themselves from fellow drivers, especially rivals, there are clear advantages to being in a community who know the pressures and issues of racing. Not many people know what it feels like to drive at over 200 mph for a living or the pressures of having to perform at every race are huge, so having the chance to speak to fellow drivers can be good.
Many ex-drivers also live in or around Monaco, usually due to making their home there while driving. Since many Formula One drivers retire as wealthy individuals, the continued benefits of living in a tax haven such as Monaco keeps its appeal long after they stop racing.
Like Monaco, Switzerland has many excellent amenities for F1 drivers looking for a new home. For a start, it’s a stunningly beautiful country, with excellent healthcare, great schools, and it’s perfectly situated within easy reach of many other European countries.
Switzerland is also extremely well known for its privacy and excellent economy, and it offers F1 drivers a rare opportunity at being able to live semi-normal lives without constant scrutiny. Switzerland is one of the most attractive countries in Europe for wealthy businesspeople, or in this case sportsmen, due to it being a tax haven.
For an F1 driver, these key points are massively important, although in the interest of fairness, we should point out that many F1 drivers, both past and present, cite the chance to have privacy as their main reason for choosing Switzerland as a place to live (whether they mean it is not for us to say).
While most people can eat at a restaurant or do their grocery shopping in peace, an F1 driver is almost always mobbed by fans or paparazzi when they leave their home in most countries. In Switzerland, however, drivers are allowed a much greater degree of privacy, and they can live their lives in relative anonymity.
Besides the excellent tax benefits of living in Switzerland and the chance of peace and quiet, another huge benefit is the language. With around 45% of the population speaking English, and with the languages of French, German, and Italian well represented, many F1 drivers can seamlessly integrate into society.
While Switzerland is as beautiful as ever, and the anonymity that it affords F1 drivers is often unique and at times priceless, one thing that has slowly begun to alter in the banking capital of the world is its tax haven status. As Switzerland tries to move away from its tag of being a tax haven, F1 drivers seem to be drifting away too.
As preferential taxes are removed and controls over how and where foreign nationals can register for their taxes are being changed, the financial benefits of living in Switzerland have become less powerful. Some drivers have opted to live in other countries because of this.
To make it clearer, Switzerland is divided into cantons, which are basically like states in the USA, and like each US state, each canton has its own taxation laws. Previously, an F1 driver could register for taxes in a canton that has super-low tax rates, but they could live in another canton, such as Zurich or Geneva.
Like paying taxes for say, Utah, but living in New York, this arrangement suited F1 drivers. In fairness to F1 drivers, many other wealthy foreign nationals living in Switzerland also take advantage of this, but these laws are now under severe scrutiny, and so the drift away from being based in Switzerland had begun.
Most nationalities can take advantage of living in Monaco. However, one nationality that does not benefit from living in Monaco, especially when it comes to its tax benefits, is French. French nationals that live and work in Monaco are subject to French income tax, which negates the major benefit of living there.
While tax reasons are certainly important, they are not the be-all and end-all for a driver. They may simply wish to live in another country for personal reasons, perhaps family or friends are there, or their children are already in school and disrupting their lives may not appeal to them.
Monaco is a fascinating and often exciting place to live, but it also has a reputation of being somewhat isolating at times. With just under 40,000 alleged residents, there are many who simply have properties there for tax reasons, and most of the time their property lies unoccupied.
Monaco is also notorious for being a bit of a concrete jungle. Unless you plan on heading out of the town, or maybe jumping onto a yacht and heading out for the day, there is very little in the way of parks or recreational activities. This can make this tiny principality feel slightly claustrophobic for some.
Living in Monaco can be an incredible experience for an F1 driver. One day they’re walking the streets around their apartment, the next driving those same streets at 180 mph. The benefits are numerous, the negatives very few. Monaco is a stunning place surrounded by wealth, safety, and sunshine.