Relocation to Monaco, an attractive location for individuals, families and private businesses

Relocation to Monaco, an attractive location

Monaco is strengthening its business model, which makes it an attractive and pragmatic option to relocate individuals, families and international businesses.

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City with ocean

Despite its size, the Principality of Monaco has become over the past fifteen years an attractive and pragmatic option to relocate individuals, families and international businesses. Monaco has converted its size constraint in opportunity and is organized like a medium size company in order to offer tailor-made solutions to its business community. With an increasing number of activities incorporated every year in many sectors as finance, fund management, e-commerce, shipping, health, corporate services, family office, Monaco is strengthening its business model. Monaco's most recognized assets (geographic situation, security of people and goods, cosmopolitan work force, political stability, quality of life) support the permanent focus of local Authorities to provide a first-class regulations, tax and business environment framework.

Monaco Residence, an option for all

Families, Entrepreneurs, Individuals retiring from businesses, coming from ail around the world - they represent more than 125 different nationalities.

The place

Whether love at first sight or for more down to earth reasons, each person who chooses to come to live and work in Monaco has a different story to tell about their first encounter with the Principality. Ten good reasons for choosing Monaco:

  1. A Sovereign State that is neutral and independent, with stable institutions
  2. An accessible location and exceptional quality of life in the heart of Europe, bordering the Mediterranean sea
  3. A united, welcoming and multicultural community (more than 125 nationalities living in harmony) in which English is widely spoken
  4. A leisure destination with hotel and nautical infrastructures in the best traditions
  5. A unique economic and social model where the absence of debt and structural budgetary balance is a long-term guarantee for the future
  6. Sports, culture and festivities as part of everyday life, as well as numerous international events
  7. Exemplary domestic security, both for residents and vlsitors, which forms one of the Government's priorities, together with outstanding schools , social services and health care
  8. A diversified and forward-looking economy, with a well-adapted taxation policy, and with a dynamic employment and consumer market that also Impacts French and Italian neighbouring areas
  9. An accessible, open and attentive Administration for both businesses and the public
  10. A long-standing commitment to eco-responsible and sustainable development.

Its’ Status

Monaco is net a member of the European Union. However, this does not prevent it from playing a full part in the development of Europe and forging close links with many other European countries. The principle of free movement exists between France and Monaco. Monaco is registered as an external border of the Schengen Area.

The Ministry of Foreign Affairs was created in 2005. Since then, it has worked unceasingly to promote the spread of influence and the evolution of Monaco's image in the world by implementing the policies of H.S.H. the Sovereign Prince. Monaco's diplomatic presence has been enhanced by the nomination of several ambassadors, membership of numerous international bodies and the signature of many bilateral conventions with countries with which Monaco enjoys close relations.

The Principality has been a Member State of the United Nations Organization since 1993. It has forged links with most of the leading international organizations. This has enabled it to broaden the scope of its activities, despite the limited size of its territory.

Monaco, an attractive tax environment for individuals and companies

For more than 150 years, no personal income tax is levied by the Principality of Monaco. Neither Investment Income nor capital gains and directors' remunerations are taxed in Monaco. The taxable basis for companies tends to be narrower than those prevailing for the most competitive jurisdictions. There is no withholding tax on dividends and interests. Monaco has a low social security contribution for employees and employers with a high standard national insurance for employees. This situation is further supported by Monaco's small size which allows the government and its services to be very accessible and proactive through constructive and swift dialogue. In addition, for the purpose of VAT, Monaco is part of the European Union. Monaco is also expanding its DTTs network, on top of TlEAs.

Becoming a Monaco Resident

For any individual who wants to spend more than 3 months in The Principality, a Residency Card is required (carte de séjour). To obtain the permit of residence, it depends on the nationality of the individual. A European Economic Area national, including Liechtenstein, Norway, Iceland and Switzerland, makes an application directly with the authorities in Monaco. The process takes approximately 6 weeks. A non-EEA national has first to obtain a long term visa from the French authorities before making an application in Monaco with the Police Department. The application for a long term visa is usually filed with the French Embassy in the territory where the individual resides. The process would take around 4 months. Limited exceptions are accepted and the long term visa might be filed with the French Embassy in Monaco.

In order to obtain the long term visa or to file directly for the Monaco residency card, the authority will require:

  • a proof of identity and civil status
  • documents relating to the accommodation in Monaco (lease contract, title deeds or certificate of accommodation with a third party) - the accommodation must be appropriate
  • proof of sufficient income to live In Monaco (work engagement accepted by the appropriate authority or a Monaco bank attestation, where the amount required will change from one bank to the another
  • proof that the applicant has never been convicted of any criminal offence or been made personally bankrupt.

Having an established residency in Monaco does not protect individuals from being taxed in other jurisdiction which increase the interest of bringing in Monaco part of its economical centre.

Inheritance tax

Monaco inheritance and donation laws apply to properties and possessions located in the Principality, regardless of the residence or the nationality of the deceased or donor. Various taxation rates are applied and are paid by the recipient:

  • Nil between parents and children or between spouses
  • 8% between brothers and sisters
  • 10% between uncles, aunts, nephews and nieces
  • 13% between collateral relatives other than siblings, aunts and uncles, nephews or nieces
  • between non-relations 16%

In addition, Monaco law is applicable to the Inheritance of immovable and movable properties, if the national law of a deceased foreigner refers issues of succession back to Monaco. It is in the interest of foreigners with assets in Monaco to find out if their national law refers to foreign law. An individual’s assets on death consist of the reserved portion {reserve légale) and the disposable portion {quotité disponible). The reserved portion goes to the protected or forced heirs (surviving children of the deceased) regardless of what is written in a will. When a person sets up a will in Monaco, the reserved rights of the children are protected, and cannot be overridden. The execution of a will can override the rights of other family members. Monaco recognizes authentic, holographic and secret wills.

Individuals and Estate Planning

Monaco is a civil law jurisdiction. Individuals from common law countries living in Monaco use in general trusts, in order to avoid Monaco forced heirship law, and thereby have the same flexibility to dispose of immovable property on death as exists in their national jurisdictions. Monaco legislation allows such individuals to transfer trusts to Monaco. Law 214 allows foreign residents in Monaco to set up trusts governed by their own national law, and to permit trusts registered in a foreign jurisdiction to be administered in Monaco, according to the following rules; French language, registrations, trustee approved by the Govemment,...

Monaco adhered to the Hague Convention in 2008 on the Law Applicable to Trusts. This reinforced the recognition of Trusts in Monaco even if there is no local trust law and therefore no Monaco Trust.

Single Family Office

The favourable tax, economic and social environment has led a number of individuals to set up a Single Family Office in the Principality. There are many forms and organization available to create a family office: corporate, branch, civil company, etc.

As VAT is the main source of revenue for the Principality, the state is enhancing the possibility for families to relocate in Monaco, as individual but aIso their center of investments decisions. A SFO without the presence of a family member might be possible but rare.

Tax regime, required licenses or not, forms, organization, employment, etc. All options are available when an individual is planning on setting up a "management team" in Monaco. The only restriction will then be when certain family offices suddenly wish to group or share investment strategy with other families. Anyone who wants to provide Investments advises or strategy has to be regulated. They would be subjected to controls by the local Regulators (CCAF) and Anti Money Laundering (SICCFIN).

Most of the SFO created in Monaco are not holding their investments directly within the organization set-up in Monaco but though Special Purpose Vehicles which depends upon the type of investment. its location, etc. The investment decision and its management is made out of Monaco.

How can we help

Whether you are a business, an individual or a family, we have a large experienced team of 80 employees and 6 partners who can answer any of your questions related to Tax, corporate law, Payroll, Accounting and Regulatory matters. Being into business in Monaco for more than 45 years with close relations with all local players and authorities and an access to additional resources across KPMG's global network of membership, we can be of any assistance from thinking of Monaco as an option, to relocation and permanent presence.

Our multilingual team operates within all Industry, giving you access to advisors or auditors understanding your specific needs.

Bettlna RagazzonI
Partner, Monaco
T: +377 97777700
E: bragazzoni@kpmg.mc

Tony Guillemot
Partner, Monaco
T: +377 97777700
E: tguiiiemot@kpmg.mc

Stéphane Garino
Partner, Monaco
T: +377 97777700
E: sgarino@kpmg.mc

Gérard de Gregori
Partner, Monaco
T: +377 97777700
E: gdegregori@kpmg.mc

Bernard Squecco
Partner, Monaco
T: +377 97777700
E: bsquecco@kpmg.mc

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