Monaco General Business Company (GBC) |
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A Monaco GBC (also known as a Societe Anonyme Monagesque (SAM)) is allowed to conduct business both within Monaco and offshore, making it a flexible solution for international entrepreneurs. Although a GBC conducting business offshore is subject to profits tax (see Disadvantages below), this entity is an excellent solution for entrepreneurs looking to conduct business and reside in Monaco because i) if a GBC makes more than 75% of its sales within Monaco, it is legally exempt from profits tax and ii) there is no personal income tax in Monaco, making it an attractive location in which to live. The following is a summary of the advantages and disadvantages of a Monaco GBC: |
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| Advantages of a Monaco GBC | |||||
| 1. | Although a Monaco GBC pays profits tax if more than 25% of its sales are overseas, it can legitimately mitigate this by paying out all profits as salaries or management fees. Healy Consultants will devise a suitable tax minimisation strategy for your Monaco GBC. |
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| 2. | Many international entrepreneurs choose to set up a Monaco GBC and live in the Principality. Monaco is an attractive place to live, with no personal income tax (that said the rate of withholding tax on the interest income of EU residents for Monaco increased from 15% to 20% from 1 July 2008, and will rise to 35% by July 2011) and a high standard of living. |
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| 3. | To obtain Monaco residency, an entrepreneur must i) rent property in Monaco ii) attend a police interview iii) obtain bank confirmation that the entrepreneur has sufficient funds to support himself and his family. Furthermore, to retain Monaco residency, it is necessary to live in Monaco for a minimum 183 days in a year. |
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| Disadvantages of a Monaco GBC | |||||
| 1. | International entrepreneurs should budget for government approval to take up to six months, because of extensive paperwork and thorough vetting of the company's planned activities by the government. Licenses to operate a Monaco GBC are issued by the government. Applications are lodged at the Monaco Economic Expansion Department (EED). The license is valid for up to five years, after which it must be renewed at the EED. |
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| 2. | A GBC has a minimum capital requirement of 150,000 Euros (approximately US$225,000). |
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| 3. | A GBC requires at least two shareholders and directors. Directors must be shareholders in the company. |
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| 4. | Under Monaco law, only a Monaco-resident notary public is allowed to incorporate the company on behalf of the entrepreneur. The notary will liaise with the Registry of Commerce and Industry to complete incorporation. Healy Consultants will liaise between our client and the notary to ensure the efficient completion of paperwork and procedures. |
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| 5. | Once approval is granted and a license is issued, the GBC is required to adhere to strict operating guidelines, which include: i) the company must have a physical office premises in Monaco; ii) the company must only carry out activities for which it is licensed; and iii) occasionally the company may be subject to performance criteria which is scrutinised by the government. Failure to comply with the above may lead to a license being revoked. |
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| 6. | A GBC is required to hold an annual general meeting among shareholders holding a minimum 25% of the company's capital. |
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| Other Information | |||||
| Refer to the following links to read more information on Monaco company formation: | |||||
Contact Us |
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For more information on a Monaco GBC, contact email@healyconsultants.com or call us at (+65) 6735 0120 |
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