Rosemont Consulting, a Monaco based company who constantly seeks ways to provide you with the best assistance to help you meet your tax and regulatory obligations recently published an updated on the changes of the Private Law in the Principality of Monaco.
Law n° 1.448 was voted on 28 June and has for purpose to recast the international private law in Monaco. Its scope of application is large since the law deals with family law as well as obligation rights or more general rules of judicial competences. This innovative law aims to simplify and unify the international private law.
This reform also allows Monaco to offer a stable and modern legal framework conform to the increasing internationalisation of families and their assets. It is now an important aspect of the attractiveness of the Principality.
The main innovations of this law regarding family law are:
The law established that a single succession law should apply to the entire succession regardless of the nature of the assets and their situation.
The conflict of law rules are the following:
The succession is governed by the law of the state in which the deceased had their domicile at the time of death (art56). It is important to note that these same criteria were adopted in the European Succession Regulation (aka Brussels IV) which harmonises certain conflict of law issues. So Monaco will apply the same rules as the EU member states which have adopted Brussels IV;
The deceased may choose the law applicable to their succession. This choice is limited to the law of a state of which the deceased has the nationality at the time of the choice (art57). This profession juris is a real innovation in Monaco. It will be necessary to consider case by case whether the professio juris will be recognized by other states that could be involved in the settlement of the succession (for example the state where the estate would be opened or the states where a property will be located);
“ le renvoi” is excluded under article 24;
The limits to the application of a foreign law are, violation of Monegasque public policy and primacy of police rules (art27/28). One could the question for example whether a professio juris which will designate a Sharia law could be considered as partly contrary to Monaco public order.
The law also states the conflict of law rules applicable to determine the applicable marital law in an international situation.
In the absence of choice of law by the spouses, the matrimonial regime is governed by (art38):
The law of the state of the household of the spouse, since it is considered that it is on this state that the spouses establish their centre of life;
In absence of matrimonial home, the law of the state of which the two spouses hold the nationality at the time of the wedding;
Monegasque law, in absence of matrimonial home and common nationality or in case of multiple common nationalities; and
In an international situation the spouses have the possibility to choose the applicable law to their matrimonial regime among the following laws:
The law of the state of their first matrimonial household;
The law of a state of which one of the two spouses hold the nationality (if one of the spouse have multiple nationalities he might choose the law of one or the other of the states of which he has the nationality);
The law of the state on which one of the spouses has their home;
The law of the state in which the marriage was celebrated;
The law applicable to the matrimonial regime governs the entire patrimony of the spouses regardless of the nature of the assets and wherever they are.
Rules for judicial competence
The law also indicates new conflict of law rules to determine the Courts competence. Those rules allow a simplification of conflicts in terms of international private law.
Thus, in terms of succession article 6.4 specifies that Monegasque courts are competent regardless of the domicile of the defendant when the succession is opened in the principality or when the succession includes immovable property located in Monaco.
The law provides for the possibility for the parties to a dispute to establish “ une élection de for”, which means they can choose the jurisdiction which will be competent to resolve the dispute.
The scope of this law and its consequences on inbound investment in Monaco and for all Monaco residents are very wide. It is recommended to all Monaco residents to review their estate planning taking into account these new rules, especially regarding the use of foreign trusts or the so called Monaco 214 trust.
Finally it is important to have an international approach of these issues taking into account these new conflict of law rules and the ones existing in other jurisdictions which could be involved. A comparative analysis only would be able to best secure the client.
For any questions relating to this reform and its potential impacts on you and your family Rosemont Consulting would be pleased to assist you.
Originally published at Rosemont Consulting