Business entities in Monaco
Healy Consultants will assist our Clients with incorporating the optimal corporate structure for their business needs. There are several ways of doing business in Monaco, the most common being through the setup of General Business Corporation in Monaco (GBC, locally known in Monaco as a SAM). Some of our Clients also contact us to form a local foundation of the branch of their already existing foreign company.
The Monaco General Business Corporation (Monaco SAM)
- The General Business Corporation, locally known as a Societe d’Affaires Monegasque, can be formed by a minimum of two shareholders, investing at least €150,000 in the capital of the company. This amount must be fully paid-up before company incorporation in Monaco. The owners must also appoint a minimum of two directors, who can be foreigners residing outside of Monaco and both individuals or corporate entities;
- Monaco SAMs are legally tax exempt provided that over 75% of their sales are made with Monaco residents. If otherwise, they are subject to Monaco corporate income tax, at a standard rate of 33.3%. All Monaco companies are however required to register for VAT and apply that tax on their local and French sales.
The Monaco Limited Liability Company (SARL)
The Monaco limited liability company can only be formed by foreigners with prior approval from the Monaco Government. While the minimum amount of paid-up capital of €15,000 is ten times less than the minimum level required for a SAM, this type of business entity is hence less frequently used by foreigners willing to do business from Monaco. Foreign directors are also required to obtain authorization from the Government before their appointment is legally allowed.
Limited Partnership (Société en Commandite Simple, SCS)
A limited partnership in Monaco is an entity with two categories of owners: i) general partners and ii) limited partners. One or more limited partners carry limited liability, while one or more general partners carry unlimited liability. Limited partners also benefit from greater confidentiality with no requirement for disclosure of information to third parties or the Trade and Industry Register.
Limited partners benefit from greater confidentiality with no requirement for disclosure of information to third parties or the Trade and Industry Register.
The Monaco Foreign Administrative Office (bureau administratif Monegasque)
A Monaco foreign administrative office carries duties, including: i) administration; ii) management; iii) coordination and iv) supervision. This entity does not require a minimum capital for registration and cannot perform any commercial activities. It is subject to corporate tax on its annual expenses at a rate of 2.66%.
The Monaco Branch (succursale)
Branch offices in Monaco must be licensed as well in order to commence operations. This structure requires to provide sufficient evidence to support the license application, including i) evidence of sufficient funds and ii) audited accounts for the parent company for three years back. Licenses are issued for a period of only three years and are not renewed automatically.
The Monaco Foundation (foundation de droit Monegasque)
A better alternative to a Monaco trust, the Monaco foundation is a suitable option to hold private assets or pursue charitable activities. It requires the appointment of a resident administrator and it can take months before the authorities accept its registration.
Table of comparison between different Monaco entities
|Locally known as:||SAM||SARL||succursale||Bureau administratif|
|How long to set the company up?||4 weeks||8 weeks||8 weeks||6 weeks|
|How long to open company bank account?||4 weeks||4 weeks||4 weeks||4 weeks|
|Do you visit Monaco to complete engagement?||No||No||No||No|
|Issued share capital required?||€15,000||€150,000||N/A||N/A|
|Type of business permitted?||Commercial||Commercial||Commercial||Non-trading|
|Allowed to sign contracts with Monaco Clients?||Yes||Yes||Yes||No|
|Allowed to invoice Monaco Clients?||Yes||Yes||Yes||No|
|Corporate tax if sales outside of Monaco are below 25% of total sales?||0%||0%||0%||N/A (2.6%)|
|Corporate tax if sales outside of Monaco are above 25% of total sales?||33.3%||33.3%||33.3%||N/A (2.6%)|
|Corporate bank account||HSBC Monaco||ING Bank||Credit Suisse Monaco||EFG Bank|
|Can rent office premises in Monaco?||Yes||Yes||Yes||Yes|
|Allowed to import raw materials?||Yes||Yes||Yes||No|
|Allows exporting goods?||Yes||Yes||Yes||No|
|Can the entity hire expatriate staff in Monaco?||Yes||Yes||Yes||Yes|
|Resident director required?||No||No||No||No|
|Resident shareholder required?||No||No||No||No|
|Minimum number of directors||2||2||1||2|
|Minimum number of shareholders||2||2||1||2|
|Registered office premises required?||Yes||Yes||Yes||Yes|
|Resident company secretary required?||No||No||No||No|
|Tax registration certificate required||Yes||Yes||Yes||Yes|
|Corporate shareholders allowed||Yes||Yes||Yes||No|
|Corporate director(s) allowed||Yes||No||No||No|
|Public register of shareholders and directors||Yes||Yes||Yes||Yes|
|How long to get work permit approved||3 months||3 months||3 months||3 months|
|Statutory audit required||No||No||Yes||Yes|
|Annual tax return to be submitted||Yes||Yes||Yes||Yes|
|Access to Monaco’s double taxation treaties||Yes||Yes||Yes||No|
|Total Monaco business setup costs in year 1||€19,900||€23,700||€23,600||€23,250|
|Subsequent annual costs (incl. accounting and tax fee)||€2,600||€2,600||€2,600||€9,000|
|Sample Engagement Invoice|