Opening a business in Monaco
Operating a business in the Principality of Monaco always involved extraordinary benefits and clear reasons, motivations. However in every case a Government authorization is required for any kind of business activity in the territory of the Principality of Monaco.
A Government authorization is required for any kind of business activity in the territory of the Principality of Monaco. The approval process takes usually between three to six months but it can be very lengthy, complex, and time consuming. The most common legal structure is a sole trader (société en nom personnel), which involves a bit easier process compared to the other possibilities.
Under Law no. 1144 of July 26, 1991, any economic activity pursued in the Principality of Monaco, regardless of its nature (i.e., whether commercial, industrial, crafts, or services, professional and non-professional alike) must have prior Government authorization.
Business and economic activity in Monaco is promoted by the Chamber of Economic Development (CDE), which can help start-ups with advice, contacts and administrative procedures. Its website is in both French and English, and it can supply English-language guides on request.
The other way for start-ups is to contact directly the Direction Expansion Economique (Economic Expansion Department), which is also called as Monaco Welcome & Business Office (MWBO).
The Direction Expansion Economique is normally the administrative agency that examines applications for permission to establish an economic activity in the Principality.
The Monaco Welcome & Business Office is the entry point to the privileged circle of Monégasque residents and businesses. With dedicated and attractive premises, the Office welcomes and assists individuals and entrepreneurs wishing to relocate to the Principality. It is a single contact point, providing support with administrative affairs and introductions to the key players in Monaco, whether public or private, to facilitate the relocation of individuals, their families and/or their businesses.
Any future resident and/or entrepreneur wishing to relocate to the Principality will find a range of tools, key contacts and useful information at the Monaco Welcome & Business Office to plan their new initiative within lead times that are compatible with the economic realities of our era.
If a business operational permit is granted, the authorization is usually very detailed about what is authorized, and the duration of the authorization – usually for several years – is normally renewable for similar periods. Renewal is not automatic and must be sought.
Typically, the authorization sets out the limits of the activities that may be performed. The authorization also specifies the premises where those activities may take place as well as any special conditions applicable to the performance of those activities.
The authorization is personal and non-transferable, except for the “leasing” of an entire business described below. Any material change in the authorized activities, the nature of holder of the authorization, or address or premises where the activity is conducted must be approved in advance. Any authorization may be suspended or revoked for misconduct as well as for the failure to maintain appropriate premises for conducting the activity, the absence of real activity, activities not in conformity with the authorization, etc.
Foreign companies that wish to set up an administrative office or branch in Monaco also require authorization.
The Monaco Government website or the Living in Monaco websites provides information in English on the different company structures.
Monaco offers various types of legal entity starting from the one person company.
The Principality offers multiple business formation possibilities from the one person sole-trader to a multi million Euro worth company. You can easily find a solution of every size of business, and the Monaco Welcome Office will gladly advice you for free regarding the possibilities and the involved benefits they offer.
What is very interesting is to see as the economic boost effect of the change, that since a few years now it is possible to create Limited Liability companies, which Monaco calls SARL (Société à Responsabilité Limitée). A SARL is formed between two or more people with limited liability to the amount of their capital investment. There is a fixed minimum capital investment, which must be released to an account at a Monaco bank opened for this purpose.
This was an important strategic step, since before the Société à Responsabilité Limitée existed you could only form corporate entities with full legal liability. Now days the SARL represents one of the greatest benefit for new businesses.
It is also considered as a great benefit that during the first two years you have the possibility to operate your business venture from your home apartment if your landlord accepts it. Usually these properties are labelled as Mixed Usage (Usage Mixte), which means that the landlord agrees and acknowledges that a company will be performing in the apartment. It is flexible and it ensures you to adjust your business to the local needs before you would invest into a new office. Therefore many family formed companies prefer this type of solution.
Legal entities in Monaco:
The fastest and easiest way to establish a business in Monaco is as a sole trader. Any individual, who must normally be a resident of Monaco may pursue a permitted activity as a sole proprietor. Anyone can register to carry out professional work, retailing, contracting or manufacturing as a sole trader with unlimited liability. Married sole traders should be aware that if the business fails, the spouse’s personal assets might be at risk.
The individual’s real and personal property is then subject to the claims of the creditors of the business to the extent specified in articles 1928 and 1929 of the Civil Code on Obligations. Personal status is important, since according to the matrimonial system and the activity of the spouse, the spouse’s property may also be affected by the sole proprietor’s business commitments. Anyone who regularly and customarily engages in commercial activities are normally considered merchants.
Société Anonyme Monégasque (SAM) / Partnership limited by shares (SCA)
A société anonyme monégasque (SAM) is a joint stock company and the company objects may be commercial or non-trading.
The professions may thus be incorporated in the form of a non- trading SAM.
Public limited companies and partnerships limited by shares must have notarized articles of association that are published in the Journal de Monaco and filed with the court registrar. There must be at least two shareholders, and the Board of Directors must also contain at least two shareholders. Share capital must be fully subscribed and each shareholder must pay at least a quarter of the nominal value of their shares for the incorporation to be valid. The first shareholders’ meeting must be held within three months of the license being granted. The company’s auditors must be based in Monaco.
Société à Responsabilité Limitée (SARL)
The société à responsabilité limitée is one of the most common legal forms. It limits the shareholders’ liability to the amount of their contributions.
It gives a family touch to the firm. It enables a firm to be set up with less capital. It can be managed by a third party.
A SARL is formed between two or more people with liability limited to the amount of their capital investment. There is a fixed minimum capital investment which must be released to an account at a Monaco bank, opened for this purpose. Proof of this is required when applying for registration with the Trade and Industry Register (Registre du Commerce et de l’Industrie, RCI).
General partnership (SNC)
General partnerships are established by two or more people operating under a company name. One of the owners should be resident of Monaco.
The articles of association of the company must be registered with the Tax Department and an excerpt of the incorporation certificate published in the Journal de Monaco (government gazette).
The general partners are jointly responsible for all partnership liabilities. The partnership agreement may limit the authority of certain partners to commit the partnership; otherwise, any single partner may commit the partnership.
Limited partnership (SCS)
Limited partnerships are established between one or more managing partners, and one or more financial backers. Managing partners have unlimited liability, whereas financial partners’ liability is limited to the amount invested. Financial partners may not play any role in managing the partnership, even by proxy. The articles of association of the company must be registered with the Tax Department and an excerpt of the incorporation certificate published in the Journal de Monaco.
Administrative offices and branches of foreign companies
Administrative offices are established by companies whose registered office is not in Monaco. Their sole purpose is for management, coordination or supervision. Licenses are granted for a limited period and must be renewed. Branches of foreign companies must obtain a license and register with the Trade and Industry Register (Registre du Commerce et de l’Industrie, RCI).
- A Government authorization is required for any kind of business activity in the territory of the Principality of Monaco.
- The approval process takes usually between 3 to 6 months but it can be very lengthy, complex, and time consuming.
- Foreign companies that wish to set up an administrative office or branch in Monaco also require authorization.
- If a business operational permit is granted, the authorization is usually very detailed about what is authorized, and the duration of the authorization.
- Renewal of the authorization is not automatic and must be sought.
- Any authorization may be suspended or revoked for misconduct as well as for the failure to maintain appropriate premises for conducting the activity, the absence of real activity, activities not in conformity with the authorization, etc.
- The authorization is personal and non-transferable.
Information request on business formation
Interested to learn more about the Principality of Monaco?
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