DOING BUSINESS IN MONACO
Since 2003, Healy Consultants has assisted our Clients with migrating to Monaco and starting their business there. Our services include i) Monaco business registration ii) government license registration iii) personal and corporate bank account opening services in Monaco and abroad iv) employee recruitment v) visa strategies and vi) office rental solutions in Monaco.
Press the link headings below to read detailed, relevant, up to date information.
Advantages and disadvantages
Advantages of Monaco company registration
- It is possible to register a General Business Corporation in Monaco (GBC, locally known in Monaco as a SAM) with only i) two shareholders and ii) two directors, who all can be foreigners and reside outside of Monaco. While Monaco business registration requires a minimum paid-up capital of at least €150,000, our Clients do not need to travel to complete the procedures;
- Monaco is a great place for high net worth individuals to live because:
- Monaco residents do not have to pay any local personal income tax to the Monaco tax authorities. French citizens constitute the main exception to this rule as they are usually subject to French personal income tax;
- There’s also no inheritance or gift tax in Monaco, excepted on local assets. Monaco is hence a good residency solution for foreigners planning to transfer their wealth to their family members;
- While the official language of Monaco is French, most locals are also fluent in English, Italian, Russian and other main European languages;
- Monaco is a hub for wealthy entrepreneurs and businessmen, who enjoy its casinos, bars and restaurants, yacht harbor and its international airport (located in Nice);
- Monaco real estate is a safe investment. Local residences are often luxurious, with great utilities and facilities;
- Monaco is lastly a safe place for families with kids, with little criminality;
- Foreigners can request a residency permit in Monaco provided i) they have a lease agreement for a residential address in Monaco ii) have no criminal records and iii) have sufficient income (at least €0.5 million per year in most cases). Forming a company in Monaco is not required for eligibility.
- Forming a company in Monaco offers the following tax advantages:
- Companies making over 75% of their sales within Monaco are legally exempt from corporate income tax;
- Companies subject to corporate income tax still benefits from a two years tax holiday from the date of their formation in Monaco. Thereafter, these businesses benefits furthermore from reduced rates of i) 8.5% (3rd year) ii) 16.5% (4th) and iii) 25% (5th year);
- Although Monaco is not a member of the European Union, it is still part of the EU customs zone, so entrepreneurs exporting products and services to other EU countries will not be subject to custom duties;
- Monaco implements no withholding taxes are foreign exchange controls and the country is part of the Eurozone.
- Monaco is a regulated, stable jurisdiction within an established judiciary, giving international investors long-term security. Despite being a private jurisdiction, Monaco has made a transparency pledge to the Organisation for Economic Cooperation and Development (OECD), and in late 2009 was added to the OECD white list. The country currently has nineteen tax information exchange agreements (TIEAs) with countries including i) the United States ii) Germany iii) France iv) Australia v) Belgium and vi) Argentina.
Disadvantages of Monaco company registration
- A Monaco company is not an offshore company. It is subject to corporate income tax of 33% if its global sales exceed 25% of its total sales. Monaco also requires companies registered in Monaco to apply value added tax on their local and French sales at the French rate of 20%;
- Starting a business in Monaco is time consuming and costly because:
- Monaco’s Government closely vets prospective investors and companies. Under the terms of its license, each company must abide by stringent operating restrictions, including: i) the company must carry out only the narrow band of activities for which it is licensed and ii) the company must have physical premises and staff in Monaco;
- Monaco company formation is expensive, due to a minimum paid-up capital of €150,000. The required amount is furthermore significantly higher in many industries, so it is important to carefully plan ahead the structuring of the company;
- Because of complex and lengthy government approval procedures, Monaco company formation takes up to six months. Companies being set up to conduct activities such as commercial banking, investment management, notary services, legal services, architects, certified public accountants and insurance companies are subject to additional approvals. Most entrepreneurs engage the services of Healy Consultants, who will efficiently handle all government approvals, as well as liaise with local Monaco notaries, who have the exclusive authority to legally register Monaco companies.
Best uses for a Monaco company
- Monaco is an ideal location for an international administrative center. Located within France and close to Italy, Monaco is in direct contact with many leading European markets such as France, Italy and Spain;
- Monaco is a cauldron of international entrepreneurs mainly in the financial luxury and tourism industry, where most of the population is foreign, the perfect ingredients for creativity and exchange of skills across industries and cultures, stoked by a liberal, entrepreneurial free market.
- Time to incorporate: Four weeks
- Cost to set up: €22,700
- Minimum capital: €150,000
- Physical office required: No
- Shareholders: 2
- Directors: 2
- Company secretary: No
- Resident director: No
- Corporate tax rate: 0%/33%
- Corporate tax base: Worldwide
- Shelf companies: No
- Main company type: SAM