Monaco officially the Principality of Monaco, is a sovereign city-state and microstate, located on the French Riviera in Western Europe. It is the second smallest and the most densely populated country in the world. Monaco is a principality governed under a form of constitutional monarchy, with Prince Albert II as head of state. Although Prince Albert II is a constitutional monarch, he wields immense political power. The House of Grimaldi have ruled Monaco, with brief interruptions, since 1297. The official language is French, but MonÃ©gasque, Italian, and English are widely spoken and understood. Monaco has become a major banking center and has sought to diversify its economy into services and small, high-value-added, non-polluting industries. The state has no income tax, low business taxes, and is well known for being a tax haven. It is also the host of the annual street circuit motor race Monaco Grand Prix, one of the original Grands Prix of Formula One.