Incorporating a company in Monaco offers several advantages that make it an attractive location for businesses. Here are some of the main benefits:

• Low taxes: The Principality is known for having a very favorable tax regime. The Monaco corporate tax rates are low and there are no taxes on dividends or capital gains. This makes it an attractive location for businesses looking to minimize their tax burden.
• Strategic location: Monaco is located in the heart of Europe, making it easily accessible from major cities such as Paris, Milan, and Nice. Its central location makes it an ideal base for businesses looking to tap into the European market.
• Reputation as a financial hub: Monaco has a reputation as a financial hub, which can be beneficial for businesses looking to attract investment or establish partnerships with financial institutions and private banks.

Overall, incorporating a company in Monaco offers a combination of low taxes, strategic location, developed infrastructure, a pro-business environment, and a reputation as a financial hub. This makes it an attractive location for businesses looking to establish a presence in Europe.

Requirements to incorporate a company

The limited liability company (société à responsabilité limitée, or SARL) is the most common form of company in Monaco. It has the following characteristics:

• Its minimum capital is EUR15,000, and the company must have a bank account in Monaco.
• The company must have at least two shareholders (individuals or legal entities) and the manager (natural person) must reside in Monaco or the surrounding cities in France or Italy due to the effective management of the company requirements.
• The company’s registered address must be in Monaco, either at the manager’s home address (for a limited period of two years, and subject to the landlord’s approval – in this case, the company cannot have employees), or on private premises which need to be coherent with the company’s activity or in a business center which offers domiciliation services.
• All new business activities in Monaco must be specifically authorised by the government, thus the applicants must file an official authorisation request.

Authorization of activities

Some activities are sometimes denied because they are saturated or simply unwanted (mainly businesses deemed as “without ethics or morale”). In addition, certain activities are subject to specific regulations in Monaco such as financial advice or real estate brokering.

The authorisation request includes information on the company’s purpose and the company’s shareholders and directors, as well as a copy of the articles of association duly registered with the tax office.

The authorities are required to provide their response within three months from the filing of the authorisation request. Once the authorisation is granted, it will be necessary to secure a registered address and open an account with a bank in Monaco to receive the share capital paid by the shareholders.

After all this process, the registration of the company with the Monaco Trade Registry will then be possible.

Commercial companies can become functional after approximately six months from the authorisation application, mostly due to administrative deadlines, and the bank account opening process.

Obligations for companies incorporated in Monaco

All companies must keep accounting records and, except for civil companies, must file yearly accounts with the Monaco authorities.

All companies must record information on their ultimate beneficiaries upon registration with the Monaco Trade Registry, and disclose any subsequent changes.

Amendments to the company’s articles of association and its management must also be disclosed.

Having a company in Monaco and living abroad

Many users contact us to incorporate a company in Monaco living abroad.

However, it is important to note that although this is possible from Monaco, it would bring a lot of tax problems in the place of residence of the holders of the company.

Even if the company is Monegasque, the local tax authority could claim its income under the criteria of effective residence of the company, CFC rules, or international tax transparency.

Thus, we only recommend non-residents to create a company in Monaco if they are high-net-worth individuals who can comply with the following:

• Economic substance: that is, the holding company must have an office and some employees. If possible, the workers should be asset managers or qualified people.
• Effective management: if possible, to have resident administrators in Monaco or for the board of directors or administrators to travel to Monaco every time they have a meeting.
• A visible presence, including a telephone number, a website, and a tangible representation that the company is based in Monaco.

How to take the first step

If you are thinking of setting up a holding company in Monaco, we will be pleased to help you, as long as you are committed to complying with the requirements of economic substance and effective management.

And, if you are interested in changing your tax residence to Monaco, we recommend reading the report “The definitive guide to living in Monaco”, available below. For any questions, you can contact us without obligation.

You can contact us by sending an email to [email protected].