Commercial Property in monaco For sale and rent

Business in Monaco may take various forms:

• an individual or sole trader (generally restricted to Monaco residents);
• an individual acting as a commercial agent (agent commercial). This applies to individuals who may wish to act as an agent for a number of companies, dealing with a range of products;
• a Société en Nom Collectif (SNC), a corporate body in which the participants have unlimited liability; or a Société en Commandite Simple (SCS) where there is a mix of limited and unlimited liability and an individual must act as “gérant” (manager);
• a branch of an overseas company. In practice the company must have existed for at least three years before the Monegasque authorities will consider an application to form a branch. In addition the authorities usually prefer that an individual resident in Monaco is endowed with full powers to represent the branch (agent responsable);
• a Société A Responsabilité Limitée (SARL) a limited liability company largely modelled on the French SARL, which was introduced in the Principality in January 2007. The SARL is suitable for smaller enterprises as it allows for greater flexibility and lower costs. An individual must act as “gérant” (manager);
• a Société Anonyme Monégasque (SAM) a limited liability company, suitable for a substantial business. Approval for the incorporation of a SAM will normally be granted only where it can be shown that the SAM will contribute to Monaco’s commercial development and employment market. Applications for the establishment of a SAM are prone to greater scrutiny from the Monegasque authorities than applications to establish, say, a SNC or a SCS.

It is common for foreign companies to set up a branch in Monaco which is not permitted to trade in its own right or earn income for its own account.

It simply acts as the administrative headquarters of an international group of companies and receives sufficient funds from its parent organisation to pay its local expenses. Its activity is limited to providing administrative services to its parent organisation in whose name it conducts its business.

From a tax point of view, provided the branch has no profits of its own, the usual profits tax rate of 33.33% will apply but the branch will be taxed on a notional profit calculated by applying a percentage to its total local expenses in the accounting year.

This percentage is usually agreed with the Monegasque tax authorities when the business is set up and can be renegotiated at any subsequent time.

Banking services

Banking activities are regulated both by the Monegasque authorities and by the Bank of France (Autorité de Contrôle Prudentiel) which means that consent from the Bank of France will be required before such an activity can be carried on in the Principality.

Certain capital requirements must also be met and the business must be carried on in the form of a limited liability company (SAM) or as a branch of a foreign bank. Subsequently, Monaco credit institutions are regulated by the Bank of France to ensure that banking activities enjoy top flight regulation.

Financial services | Activities: Founds

Monegasque laws of 2007, replacing legislation of 1997, provide that such activities must be carried on independently through a SAM. Minimum capital requirements must also be met.

Financial services activities are approved and subsequently regulated by a special Commission (the CCAF) distinct from the standard Monegasque Government licensing authority. Financial activities are also conducted by local credit institutions. In such a case a Monaco credit institution is regulated by the Bank of France (for banking operations) and by the CCAF (for its asset management activity).

Compliance is an important issue for the regulated investment services providers and credit institutions located in Monaco, In particular Monaco strengthened its anti-money laundering legislation in 2009 and reinforced the role of the governmental body in Monaco responsible for monitoring professionals in relation to the fight against money laundering, terrorist financing and corruption (the SICCFIN).

Also in 2009, a new law on Data Protection was passed, embracing international standards on Data Protection and creating a supervisory independent authority (the CCIN). The implementation of Monegasque legislation in this area has been widely applauded, reflecting Monaco’s desire to attract serious asset management, private equity and fund business to the Principality.

The regulation is real and serious but the regulator is approachable and the industry appreciates the form of regulation which operates.

Ship management

The Principality of Monaco has become known as a centre for privately owned shipping operations. This is recognised as a field for which Monaco provides an ideal base and the existence of many shipping family interests attests to Monaco’s role as an international ship management centre.

Entrepreneurs: Family and Private Offices

Successful businessmen and women may wish to continue an activity, either in an advisory or an investment role, once they become resident in Monaco. Such an activity if commercial, professional, industrial or artisanal will require a licence if carried out in the Principality.

But activity which is personal or passive, for the entrepreneur’s own account, will not require a business licence. It is important to raise an enquiry with the authorities to avoid misunderstanding. It may be appropriate for an individual entrepreneur to seek administrative office (bureau administratif) status; alternatively, it may be worthwhile seeking incorporation of a Société Anonyme Monégasque with civil status, as a Private or Family Office as a medium through which staff can be employed locally.

There are a number of Family or private offices in Monaco ranging from small offices with very limited staff, to larger offices employing greater numbers of people, the business form differing from office to office to suit the particular family concerned.

The authorities in Monaco are very keen to welcome private and family offices with the right profile.

LAW 887

Law 887 concerns houses that were built before 1st September 1947. If you buy an apartment in Monaco that is subject to Law 887, you have a right to lease it to the following individuals:

• relatives (or their conjoints) of the owner (or his husband/wife) in the line of ascent or descent
• citizens of Monaco; individuals residing in Monaco for more than five years and working in Monaco for more than six months
• individuals working in Monaco for more than five years

Lease contracts must be concluded for a period of 6 years. They can be terminated at the end of each year, solely at the leaseholder’s initiative. There is no ceiling on the rent paid and it can be fixed at the owners discretion. An additional clause about rent indexation can be included in the lease contract.

LAW 1291/1235

Law 1291 refers to houses that were built before 1st September 1947 and states that the rent is regulated and can only be fixed by the Housing Administration, which is authorized to lease this type of property to the following groups of people in the following order of priority:

• citizens of Monaco; individuals, born from Monegasque parents; conjoints, widowers/widows of Monegasque citizens;
• individuals, divorced from Monegasque citizens;
• parents of children, born from that union;
• individuals, born in Monaco and residing in Monaco since birth, providing that one of their parents was a resident in Monaco at the time of their birth. Individuals, meeting all the conditions, but born, by chance or because of medical reasons, as a rule, outside the Principality, may be exempted from the requirement to be born in Monaco;
• individuals, residing in Monaco without interruption not less than forty years;

According to the order of priority, a citizen of Monaco will have an advantage over a person residing in Monaco for more than 40 years. Thereby, citizens will have a preferential right to lease an apartment. Lease contracts must be concluded for a period of 6 years with the option of termination at the leaseholder’s initiative.

The lessor may give the leaseholder a term that is rent free if any of the following conditions apply:

Demolition of an old building in order to construct a new one with the same or superior living space and on the same site; erection of a superstructure in the building; reconstruction of the building for the extension of existing living space; work for improvement of living conditions (hygiene, health) and public safety. In the case where any of the last three conditions apply, the entirety of the premises occupied by the leaseholder will be deemed uninhabitable for the duration of the building works.

In the above mentioned cases, as well as the case whereby the entirety of the premises occupied by the leaseholder is deemed as uninhabitable for the duration of construction work, the regulations of Article 1.564 of Civil Code apply. Moreover, in the case where the building is subject to demolition according to the terms and conditions of existing legislation and regulations or in the case that the building is considered a public health or safety hazard, lease contracts currently in force are liable to termination.

An additional clause about rent indexation can also be included in the lease contract.

Nevertheless, the annual rent cannot exceed the average level of the Consumer Price Index (excluding tobacco goods), as calculated for the entirety of households in France for a period of a year and published by the French State Institute of Statistics and Economic Analysis.

An application for a long stay visa is generally lodged with the French Consulate in the territory where the individual resides and will take about three months to obtain. EEA and Swiss nationals do not need to apply for a French long stay visa, and they make an application for a residence card directly in Monaco. The process takes approximately one and a half months.

In order to obtain a long stay visa (where necessary) and/or a Monegasque residence card, the appropriate authorities will request various documents:

• Proof of civil status and identity (in the form of a birth certificate and passport)
• Documents relating to the type of accommodation to be occupied in Monaco (a lease, title deeds, or certificate of accommodation)
• Proof that the applicant has sufficient income to live in Monaco (for example a work contract or a Monaco bank attestation)
• Proof that the applicant has never been convicted of any criminal offence (by way of a certificate from a police authority) or been made bankrupt (for example, by way of declaration)

The first residence card (carte de résident) obtained is valid for one year and is renewed twice, after which it is replaced by a card valid for three years. This is also generally replaced twice at intervals of three years, after which a ten-year residence card is issued. If a person holds a one-year or a three-year residence card, they are expected to spend at least three months in each year in the Principality for the purpose of renewing their residence card.

Where a person seeks a ten-year residence card, they will have to show that their “usual and effective” place of residence is Monaco, which generally means six months’ residence a year is required.

It may be important for holders of a residence card to seek formal proof of residence (e.g. in discussions with a foreign revenue authority). For these purposes, a certificate of residence (certificate de résidence) may be available but care has to be taken within the original residence application at the outset if this certificate is to be available subsequently.

Anyone wishing to work in Monaco as an employee must obtain a work permit from the Monegasque authorities. Such permits are not difficult to obtain, provided the job in question is not one for which suitable staff could be recruited locally.

Directing or running a business in Monaco does not require a work permit; rather a business licence must be obtained. It should be stressed that obtaining a residence card in no way confers Monegasque nationality on the holder.

Only after ten years’ residence (and very exceptionally after five years), may a resident apply for Monegasque citizenship. This is a jealously guarded privilege and is bestowed only very rarely. It is not a right.

Where the individual does not yet wish to become a Monaco resident, they may stay in Monaco for up to three months without a break. There is nothing to prevent non-residents from buying or renting a property in Monaco nor are any consents required to do so and many non-residents have invested in real estate in the Principality.

One of Monaco’s foremost attractions is the level of security afforded to its residents due largely to the presence of a highly efficient police force.

Monaco’s sporting facilities and sporting calendar, which includes the Formula 1 Grand Prix, the Monte Carlo Tennis Open and the Monaco Yacht Show, are legendary. On the cultural plane, excellent museums, opera, dance, theatre, film, music, circus, exhibitions and other events are available throughout the year at a consistently high international level.

State of the art forms of communication and transport are taken for granted. Medicine and other professional services such as banking, accounting, law and investment enjoy a strong reputation.

Monaco also enjoys an envied reputation for being both a gastronomic and a health destination.