Internet and e-commerce industry in Monaco

Monaco , a small sovereign city-state located in South Western Europe on the northern central coast of the Mediterranean Sea, is the second smallest country in the world, after Vatican City. As such Monaco is also the world's second smallest monarchy sized of just under 2 km² with an estimated population of almost 33,000. Monaco is often considered to be a tax haven, and many of its citizens and foreign inhabitants are wealthy, making up a majority of the population, at around 84%.

Internet came to the country in 1997 with the creation of incumbent Internet services provider, Monaco Telecom. It was established following the government's decision to privatize the Principality's incumbent public telecommunications operator, the Office Monégasque des Téléphones. Due to monopolistic situation of the unique provider, Monaco Telecom for years remained the only large telecommunications provider in Monaco. 49% of Monaco Telecom's capital is currently owned by the British operator Cable & Wireless, 45% by the Société Nationale de Financement, which itself is wholly owned by the Monaco government, and 6% by the Compagnie Monégasque de Banque. The growing number of smaller ISPs is being appeared on the Monaco’s broadband market over the last few years. Monte-Carlo Multimedia has also become one of the leaders on Monaco ICT market.

Monaco Telecom proposes a range of services that make a contribution to the quality life of the general public and the economic dynamic activity of professionals. This approach comes within the framework of a quality of service and sustainable development objective. Monaco Telecom thus provides full service to the Principality for landlines, mobile/cellular phones, Internet and cable TV. Monaco, meantime, supplies 5 connection levels: modem, DSL 512 kbit/s, DSL 1024 kbit/s and DSL 4096 kbit/s.

 
Monaco Telecom, being the market-leader on its local, regional and international markets, offers the best telecom solutions. The company aims to become the favorite operator in Monaco and the surrounding region, in addition to becoming the leading internet access and service supplier in French speaking Africa.

In October 2007, the country’s government and Monaco Telecom entered into an agreement to offer local clients, particularly companies, a wider and more attractively priced range of internet and telecommunications services. This three year agreement was designed to advance Monaco's competitiveness and stimulate the local economy. Monaco government invested € 4.5 million under the agreement.

Driven by the development of country’s ICT market, the amount of Internet users is constantly growing. Thus if it was accounted about 8,000 users in 2005, the volume of subscribers reached 22,000 by the end of 2009, making up almost 67% of the population. However, the amount of users is relatively high, Monaco’s Internet penetration level makes less than 1% of the European market share according to internetworldstats.com.

Internet country code top-level domain (ccTLD) for Monaco is .mc, managed by NIC Monaco. Two years registration agreement is extremely expensive, $399, that is considerably higher the prices in the other European countries, $35 in UK, $89 in Spain or $139 in Denmark. (http://www.rwgusa.com). To be registered under .mc domain the applicant is required to have local presence. Besides, applicant must show registration of company, organization, or trademark in Monaco.

Registrations can be also made directly at the second level (or at third level beneath second-level categories) or under the following names:

• .tm.mc: registered trademarks (registered in Monaco or internationally with WIPO
• .asso.mc: associations (must be chartered in Monaco)
  Speaking about the e-commerce sector in Monaco, it’s important to notice the infrastructure for large bandwidth which is a precondition for successful e-commerce is being developed in the country. Monaco encourages the development of e-commerce as an industry of the future and the type of economic activity that being high value and environmentally friendly.

A number of Monaco ISPs are shown in offshore e-commerce development with clear interest. Monaco  Telecom and one of the major ISPs is Monte-Carlo Multimedia (Monte Carlo Online). A B2B trading site based in Monte Carlo likely to be of interest is PlanetEuro.com.

Monaco's tax laws deem a transaction to have taken place in the jurisdiction in which the goods are delivered then normal business profit tax rates of 33.33% will apply in the principality with the consequence that it will not be an attractive location in which to locate an e-commerce retailing company, according to www.lowtax.net.

Monaco, being a major low-tax jurisdiction with many thousands of enterprises already installed, including many trading companies, has a chance to become one of the major centres of e-commerce activity. The Principality's geographical location (European time-zone), developed ICT sector and sophisticated business infrastructure are the factors which supposed to allure the sales, marketing and administrative departments of main European retail operations.