The Principality of Monaco is a constitutional monarchy and city-state in Western Europe that lies on the southern Mediterranean Sea coast of France, near the border with Italy. It is the second smallest independent state in the world (after the Vatican) and is the world's most densely populated country. It has no natural resources to exploit, other than its location and climate, so the principality has become a resort for tourists and a tax haven for businesses. It is also famed for the Monte Carlo casino and for hosting the F1 Monaco Grand Prix.