Attractivity of Monaco
Monaco is a very attractive place which offers a Mediterranean climate, a safe place to live, an excellent public school system, a sophisticated health care system, a cosmopolitan culture and proximity with an international airport.
Investors may invest in Monaco in different ways, such as acquiring Monegasque companies and real estate, setting up local businesses and financial regulated entities, depositing their personal assets in Monegasque banks, either on an advisory or a discretionary basis.
Monaco is also very attractive for tax reasons and is a safe place to create a business due to its Monarchical political stability.
Monaco also offers a solid financial market place. The solidity of the Monaco financial industry is explained by several factors: (i) the currency is the Euro, (ii) banks are regulated by the French prudential authorities, (iii) financial services are strictly supervised by the Monaco Financial Authority called “CCAF”, (iv) Monaco fully complies with international standards on tax transparency and fight against money laundering.
In order to become a resident in Monaco, an application package must be prepared and personally filed by the applicant with the relevant authorities.
If the application is granted, the applicant will be given a 1-year residency card, renewable every year. After several years of residency in Monaco, residents are granted a residency card valid for 3 years and later on for 10 years.
EU citizens may apply directly with the Monaco authorities, whereas non-EU citizens shall first apply for a visa with the French embassy of their country of residency. If the visa is obtained, non-EU citizens may then apply with the Monaco authorities.
Since Brexit, UK citizens are now required to obtain a visa before applying in Monaco
We assist clients and their families in relocating to Monaco. We often also structure their business and investments in Monaco through the creation of local vehicles (e.g., business companies, family offices, personal investment companies, financial companies regulated by the Monaco Financial Authority, etc.).”
Setting up a business
Setting up a business in Monaco
Monaco companies are often created through a limited company with a minimum share capital of 15.000 euros. Such type of limited company is called “SARL” which stands for “Société à Responsabilité Limitée”. This is the most common type of business entity in Monaco.
Another type of company which is commonly used in Monaco to set up a business is the so-called “SAM” which stands for “Société Anonyme Monegasque”. The minimum share capital of a SAM is 150.000 euros.
The creation of any business in Monaco either through a SARL or a SAM must be specifically authorised by the Government.
The authorization process may take up to 3 months, starting from the date the complete application is filed. For large investments and significant businesses, setting-up a SAM is preferable than a SARL (see hereafter, “SAM vs. SARL: Pros & Cons”).
Another option in order to set up a business in Monaco is by registering as a sole entrepreneurship. As for the SARL and the SAM, the sole entrepreneurship must be specifically authorized by the Government. The authorization process may take up to 3 months.
SAM vs. SARL: Pros & Cons
The main advantage of setting up a SARL rather than a SAM is the low minimum share capital. Indeed, as stated, the minimum share capital of a SARL is only 15.000 euros whereas the SAM must have a share capital of at least 150.000 euros.
On the other hand, company founders who plan to raise funds and welcome new shareholders should opt for a SAM rather than a SARL. Indeed, acquiring stocks in a SAM is subject to much less administrative processes than acquiring shares in a SARL.
Setting up investment vehicles, regulated entities and family offices
Unregulated personal investment vehicle
Companies and individuals willing to set up an investment vehicle to manage their own assets may do so through the creation of a so-called “SCP” which stands for “Société Civile Particulière”.
The SCP may manage and invest its own assets (real estate, boats, securities, etc.). The SCP is only allowed to manage and invest assets for its own account. It shall not carry out any business or investment for third parties.
Monegasque family office
UHNW individuals may set up their single family office (“SFO”) in Monaco. A SFO is a very flexible vehicle in order to manage and invest the beneficial owner’s assets. Setting-up a SAM is required in order to run a SFO in Monaco.
It is also possible to set-up a multi-family office (“MFO”). Setting-up a SAM is also required to run the MFO.
Regulated financial entity
The financial authority in Monaco is called the “CCAF” which stands for “Commission de Contrôle des Activités Financières”.
Any person willing to advise and invest securities for third parties must apply for a financial license with the CCAF.
In order to apply for a financial license, the applicant must set up a SAM (see above “setting up a business in Monaco” on the main characteristics of a SAM) and file a financial licence application.
A licensed entity must have a minimum share capital varying from 150.000 to 450.000 euros, depending on the type of regulated financial activities the entity is willing to perform.