One exception to this rule applies to French nationals residing in the Principality who are subject to French income tax under the 1963 Bilateral Convention between France and Monaco.

See Question 1.

Savings income in the form of interest payments made in Monaco to beneficial owners residing in a Member State of the European Union are subject to a withholding tax at a rate of 35% levied by paying agents established on the territory of the Principality of Monaco.

This withholding tax can be avoided when the beneficial owner authorizes his paying agent established in Monaco to disclose interest payments to the competent authority of the Principality of Monaco which in turn forwards the information to the competent authority of the Member State of the European Union where the beneficial owner is a resident.

The scenarios in which an individual would be taxed both in Monaco and in another jurisdiction are marginal given the limited number of taxes levied by the Principality of Monaco against individuals.

Accordingly, the tax on profits applicable to commercial income of individuals or corporations is the only tax concerned.

This being said, Monaco entered into several bilateral international conventions aiming at eliminating double taxations for individuals who reside in Monaco and/or the foreign country which signed the said international convention.

Monaco entered into international conventions relating to double taxation with France, Guernsey, Liechtenstein, Luxembourg, Mali, Malta, Mauritius, Montenegro, Qatar, Saint Kitts and Nevis, Seychelles.

The Principality of Monaco is also party to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. This Convention entered into force on 1 May 2019 pursuant to Sovereign Ordinance n°7.343 of 15 February 2019. Monaco submitted its list of notifications and reservations along with its instrument of ratification on 10 January 2019.

There is no wealth tax in Monaco.

Both gift tax and inheritance tax are only applicable to assets located in Monaco. Other factors, such as nationality, or the place of domicile / residence, are irrelevant.

Gift tax is applicable to gifts evidenced in writing and/or a notarized deed that must be recorded.

The donee pays the gift tax (unless agreed otherwise) whereas the heir pays the inheritance tax.

The rates of taxation are the same for the two taxes and depend on the degree of relationship between the testator (or donor) and the heir (or donee):

• direct line between parents and children or between spouses: 0%;
• between persons bound by a civil partnership contract: 4%;
• between brothers and sisters: 8%;
• between uncles, aunts, nephews and nieces: 10%;
• between relatives other than the above: 13%;
• between unrelated persons: 16%.

There is no tax on gifts between parents and children or between spouses.

Gifts between individuals bound by a civil partnership are subject to a reduced taxation rate of 4%.

The municipality of Monaco, public hospitals and charitable institutions do not pay taxes on gifts they receive.

There is no tax in Monaco for properties owned by an individual.

Legal entities that hold real property rights to one or more real properties located within Monaco, irrespective of the headquarters’ location or of the law by which they are governed, must make an annual declaration regarding the change of or the absence of change of the beneficial owner or of one of the beneficial owners of these rights. Some entities are exempt from making this declaration. A local representative duly accredited by the Monegasque tax authorities must be appointed to accomplish such filing.

In the event of a change, a transfer tax equal to 4.5% or 7.5% of the entire value of the real property located in Monaco is owed. This is not applicable if the change is the result of a gift between spouses or to a direct lineal relative.

Sale of real estate located in Monaco also triggers the transfer tax of 4.5% or 7.5% depending on whether the beneficiary meets the criteria of transparency laid down by law.

No specific rules regarding digital assets.

Leases are subject to a registration duty, the leasehold duty, which is paid by the tenant. The leasehold duty is calculated at a rate of 1% of the rent and costs corresponding to the entire period for which the tenant occupies the property. The leasehold duty must be paid when registering the lease. Registration must occur under financial penalty within three months of the contract’s signature.

There is not any income tax or capital gains tax for Monegasque nationals and for Monaco residents that reside for at least 6 months of the year in Monaco.

One exception to this rule applies to French nationals residing in the Principality who are subject to French income tax under the 1963 Bilateral Convention between France and Monaco.

Only Monegasque nationals have the automatic right to permanently reside in Monaco.

Foreign nationals aged over 16 who wish to remain in Monaco for a period exceeding three months, or to establish residence in Monaco, must be in possession of a residence permit issued by the Monegasque authorities.

The residence application process depends on whether the applicant is a national of a country Party to the European Union (EU) / European Economic Area (EEA) or not. Individuals coming from outside the EU or the EEA need to obtain a long stay visa from the French authorities first.

Anyone applying for residence in Monaco must evidence accommodation in Monaco, sufficient financial resources, and good moral character (e.g. clean criminal record).

Monegasque law has rules for both testate and intestate successions. Heirs can freely refuse to be part of the succession.

Monegasque law does provide for forced heirship rules to the benefit of children or, in the absence of children, to the benefit of ascendants in each paternal and maternal lines. The surviving spouse is not entitled to a reserved portion of the estate nor is the surviving civil partner. Accordingly, individuals are not entirely free to dispose of their estate.

The available portion of the estate depends on the number of children:

• 1 child: 1/2 of the estate;
• 2 children: 1/3 of the estate;
• 3 children or more: 1/4 of the estate.

In the event that the deceased leaves no child and only ascendants remains, the available portion of the estate depends on whether ascendants on both parental lines are alive or not:

• Both paternal and maternal ascendants are left alive: 1/2 of the estate.
• Only maternal or paternal ascendants are left alive: 3/4 of the estate.

In the event that Monegasque forced heirship rules would not be complied with, the heirs who benefit from these rules, and only them, can file a lawsuit in order to recover the part infringing upon their reserved portion of the estate.

In Monaco, the legal matrimonial property regime is the separation of property. Married couples can also select to be subject to the community of property regime, or sign a prenuptial agreement before a notary to choose any other sui generis regime which is not contrary to public policy, and make a declaration of their regime at the city hall at the time of the marriage.

The matrimonial property regime needs to be liquidated before the succession, so it will impact both the extent of the estate as well as the heirs’ rights.

Since the surviving spouse is not entitled to forced heirship rights, he or she only receives from the available portion of the estate after the matrimonial regime has been liquidated.

Each civil partner’s assets are owned individually. However, if none of the partners can prove that an asset belongs individually to him, this asset is considered to be jointly owned by the two partners.

The relevant factors under Monegasque law are the deceased’s last domicile or nationality.

According to the new Code of Private International law (Law n°1448 of 28 June 2017) which entered into force on 8 July 2017, Monegasque law applies to the succession when the deceased’s last domicile is located within the Principality. Concurrently, the law of the country of which the deceased is a national can govern the succession provided that such law was chosen by the deceased during his lifetime in a will.

A person’s domicile can broadly be defined as the place where he/she has settled and has his/her center of his/her main interests. The domicile is defined according to both objective and subjective criteria. Monegasque nationals and residents are presumed to be domiciled in Monaco.

Monegasque conflict of laws rules detailed in Question 15 may lead to the application of Monegasque law or of a foreign law.

The law applicable to the succession is the substantive law of the designated country. Hence, there is no “renvoi” and Monegasque courts will not apply the conflict of laws rules of the said country.

Besides, the applicable law cannot prevent the application of forced heirship rules when the law of the country of which the deceased is a national at the time of death provides for such kind of rules. Nor can it lead to the application of forced heirship rules when the law of the country of which the deceased is a national at the time of death does not provide for them.

Dying without a will leads to the application of the rules of intestate succession which determine the persons entitled to inherit from the decedent, their order, and their respective shares. Accordingly, a person wishing to avoid the statutory rules of intestate succession should make a will.

Moreover, a will allows to choose the applicable law in case of an international succession, that is when several jurisdictions are involved because of the contacts of the decedent with them or because of property located within their boundaries.

Monegasque notaries will enforce foreign wills in the absence of contestation from the heirs and unless the notaries anticipate difficulties related to Monegasque international public policy. Accordingly, there is no particular need to draft a Monegasque will only because an individual owns real estate in Monaco.

A will is a great estate-planning tool that can help avoid litigation regarding the determination of the applicable law, the designation of the heirs, and their respective shares which would otherwise delay the succession.

Monegasque law recognizes three forms of wills: holographic wills, wills by notary deed, mystic wills.

Holographic wills need to be fully handwritten, dated and signed by the testator.

Wills by notary deed need to be received by two notaries in the presence of two witnesses or by one notary in the presence of four witnesses. The will is drafted by a notary and is read to the testator who signs the will except if he cannot or does not know how to do it. Beneficiaries of the will or their parents up until the third degree cannot act as witnesses for this type of will, nor can the notary’s employees.

Mystic wills can be written by the testator or someone else on his/her behalf and need to be signed by the testator on each page or at the end of the documents depending on who drafted it. Mystic wills are required to be sealed and received by a notary in the presence of four witnesses.

Besides, it is possible to create a testamentary trust by a will in accordance with Law n°214 of 27 February 1936 on trusts – see Question 20 below.

The heirs administer the decedent’s estate; they are also its joint owners. It is also possible to designate one or more executors in a will.

The heirs or the executor are responsible for collecting the assets and distributing them to the beneficiaries with the assistance of a notary.

Only the heirs are liable for the debts and expenses of the estate. They contribute proportionally to what they receive from it.

In the event that there is no heir, or when there is no known heir, or when the known heirs have refused to be part of the succession, a judicial administrator may be appointed by the court to administer the estate.

Trusts, private foundations, civil companies, and family offices are common practice in Monaco.

Trusts can be created in accordance with Law n°214 of 27 February 1936 which allows nationals from jurisdictions where trusts exist to set up inter-vivos and testamentary trusts governed by their own national law.

Foundations are used for philanthropic purposes, see Question 27 below.

Civil companies can be used to manage and invest personal assets. They offer the advantage to conceal the identity of their shareholders and beneficiaries which is only known by authorities listed by law.

Single family offices are not specifically regulated. Their regime will depend on the form they choose to take.

Multi-family offices are subject to Law n°1439 of 2 December 2016 and are growing in number.

Trusts made in accordance with Law n°214 can only be created by nationals from countries where trusts legislation exists. Under this Law, testamentary trusts must respect the formalities set out for wills by notary deed or mystic wills (see Question 17 above) whereas inter-vivos trusts must respect the formalities of lifetime gifts. Also, a certificate of compliance with the substantive foreign law under which the trust is created must be provided by a practitioner approved by the Court of appeal of Monaco.

Only corporations listed by the Court of appeal of Monaco can act as trustees for a Monaco trust. Individuals can act as co-trustee or as local representative but also need to be on this list. Trustees not established in the Principality must designate a local representative. Exceptionally, the co-trustee can be freely chosen provided that he or she only acts for a single trust.

The trustee has to be in possession of and must communicate information related to the identity of: the settlors, the trustee(s), the protector, the beneficiaries or the categories of beneficiaries, any individual with effective control over the trust. This information is only available to specific authorities listed by law (tax, judiciary and financial).

For foundations see Question 29 below.

Single family offices must be incorporated as a “Société Anonyme Monégasque” (SAM) under Monegasque government policy. It is also possible to manage and invest personal assets through a “Société à Responsabilité Limitée” (SARL) or a “Société Civile Particulière” (SCP) but these types of companies do not allow to offer all the services usually provided by family offices.

Multi-family offices must be incorporated as an SAM. They are subject to prior authorization by ministerial order and approval by the Financial Activities Supervisory Commission (CCAF). This kind of company is subject to a duty of confidentiality, the violation of which is punished by criminal sanctions.

A SAM requires a minimum share capital of EUR 150,000.00 euros and only general corporate information is publicly available, the identity of the families is kept confidential.

It is generally considered that only families owning assets of at least EUR 100 million have an interest in creating a single family office. Whereas a multi-family office generally attracts families owning more than EUR 20 million each.

The beneficial owners of companies must be registered. This information is accessible to authorities listed by law (tax, judiciary and financial). Attorneys, notaries, and bailiffs can also access it in the context of their reporting obligations regarding money laundering, financing of terrorism, and corruption.

No information is available to the public with respect to trusts made in accordance with Law n°214.

For a commercial company such as a SARL, it is possible to obtain an E-BIS extract from the trade registry containing information pertaining to the name of the company, its headquarters, its share capital, the name of the manager(s), and its purpose.

The same E-BIS extract is publicly available for an SAM (instead of the information would regard managers directors and the CEO). In addition, the initial by-laws as well as subsequent changes related to the information contained in the E-BIS extract are published in the Official Gazette of Monaco.

For civil companies, only information related to the name of the company as well as its headquarters is publicly available.

Trusts made in accordance with Law n°214 are subject to a specific tax regime.

All property, wherever it may be, that is put in the trust is subject to the following duty arising on the creation or transfer of the trust in the Principality:

• 1 beneficiary: 1.30%;
• 2 beneficiaries: 1.50%;
• 3 or more beneficiaries: 1.70%.

There is a possibility to opt for an annual tax of 0.20% and Monegasque securities are subject to a reduced duty of: 0.05%; 0.25%; or 0.45%.

For foreign trusts holding property in Monaco, the tax regime at the time of transfer will be as follows:

• 1 beneficiary: 0.05%;
• 2 beneficiaries: 0.25%;
• 3 or more beneficiaries: 0.45%.

Foundations can be exempt from paying gift and estate taxes.

Single or multi-family offices can become subject to tax on profits in the event that they carry out commercial or industrial activities generating more than 25% of their turnover outside Monaco.

The tax on profits is levied on the basis of 25% for fiscal years commencing on or after 1 January 2022.

There is no other specific tax regime.

Foreign trusts are recognized and enforced according to the provisions of The Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition.

See above.

Monegasque law provides that acts made by a debtor which diminish its assets with the intent of defrauding creditors are considered void as against those creditors.

Creditors have to prove that the act was made with malicious intent. Moreover, the bad faith of the third party must be established when the act was made against payment.

However, lack of case law applying this rule to trusts or foundations raises uncertainty on its application and effects.

In the event that assets are located abroad, the decisions of Monegasque courts would have to be enforced according to the laws of the foreign jurisdiction’s courts and will have to respect the public policy applicable to trusts, foundations, or other entities in that jurisdiction.

Also, transferring assets to a third party (a trust, foundation, etc.) in order to prevent creditors to recover their claim could be considered a criminal offense under the new Law n°1.494 of 8 July 2020 on the fraudulent organization of insolvency.

The parents are in principle the legal administrators of a minor’s assets. When parental authority only belongs to one parent, he or she is the legal administrator. This administration can be placed under the control of a judge. A guardian can also be appointed to this end in the most serious situations (e.g. when both parents are deceased or deprived of parental authority).

Lifetime or testamentary gifts to a minor (by will or trust) can provide for administration by a third- party. In the event that the powers of the administrator are not defined, they will be those of a legal administrator under the control of a judge.

Monaco is a Party to The Hague Convention of 13 January 2000 on the International Protection of Adults.

Furthermore, Law n°1474 of 2 July 2019 has amended the legislation regarding the protection of adults with incapacity. There are now 4 regimes of guardianship depending on the circumstances.

Under this new Law, individuals can anticipate their incapacity by signing a lasting power of attorney (“mandat de protection future”), which must be prepared by a notary and designate an agent to act as guardian for them and their children during the principal’s incapacity.

Foundations and associations are the most common charitable / philanthropic structures in Monaco. Foundations require administrative approval and also a declaration of intent before a notary.

In order to be approved, a foundation must comply with public policy, morality, as well as national security; have a goal of general interest; and have sufficient funds to fulfil its purpose.

It is also possible to create an association, which is a legal entity gathering persons with common interests around a specific project or activity, without seeking to make a profit. It is a not-for-profit entity, formed by a contract between at least two people who decide to pool their resources to achieve a common goal. It can be set up for a variety of reasons: social, cultural, charitable, etc.

A declaration of creation, together with a number of other documents, must be sent to the Secretary General of the Government.

The Principality of Monaco has committed with both the EU and the OECD to proceed with automatic exchange of information regarding accounts held in Monaco.

As of 1 January 2021, Monaco automatically exchanges information with 66 countries: South Africa, Germany, Andorra, Anguilla, Saudi Arabia, Argentina, Australia, Austria, Azerbaijan, Belgium, Brazil, Bulgaria, Canada, Chile, China, Cyprus, Colombia, South Korea, Croatia, Curacao, Denmark, Spain, Estonia, Finland, France, Gibraltar, Greece, Greenland, Guernsey, Hungary, Isle of Man, Mauritius, Faeroe Islands, India, Indonesia, Ireland, Island, Israel, Italy, Japan, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Norway, New Zealand, Panama, Netherlands, Poland, Portugal, Czech Republic, Romania, Russian Federation, United-Kingdom, San Marino, Seychelles, Singapore, Slovakia, Slovenia, Sweden, Switzerland.

This list is updated yearly.

Other countries not listed above provide information to Monaco but do not require that information be provided in return from Monaco.

Current major projects include:

The fight against money laundering:

For many years, the Principality has pursued an active policy in the fight against money laundering and terrorist financing.

In 2023 alone, four laws were passed to amend the existing provisions.

Monaco has adopted an anti-money laundering legal framework in line with the international standards recommended by the « Groupe d’Action financière » – GAFI.

To this end, since the first anti-money laundering law was passed in 1993, Monaco’s legal and regulatory framework has been regularly amended and, on several occasions, strengthened to take into account the best practices.

The legal framework is now based on law no. 1.362 of 3 August 2009, which completely overhauled the provisions that were previously scattered across a number of different pieces of legislation and updated the standards in line with the GAFI recommendations.

To oversee the implementation of these measures, the Principality has set up the « Service d’Information et de Contrôle sur les Circuits Financiers »-SICCFIN.

With its extensive investigative powers, SICCFIN has a dual mission:

– to analyze and process suspicious transaction reports filed by economic actors subject to the provisions of Act 1.362 and its implementing regulations,

– to check that these economic actors are complying with their legal obligations, by carrying out on-site visits.

Since joining the Council of Europe in 2004, Monaco has regularly participated in the work of the MONEYVAL Committee of Experts.

The purpose of this Committee is to ensure that Member States have put in place an effective system to counter money laundering and the financing of terrorism, and that they comply with the relevant international standards in this area.

Through its legislative reforms and international commitments, the Monegasque Government’s anti-money laundering action is contributing to the development and modernization of its banking and financial sector.

Monaco thus intends to guarantee monetary and financial transactions a level of legal security in line with the standards of a modern and attractive banking center.

At the request of Moneyval and the GAFI new measures are in the process of being implemented.

Data Protection:

Bill No 1054 dated 20 December 2021 is intended to replace Law No 1.165 of 23 December 1993, on the protection of personal data.

The goal is to integrate into domestic law the new international standards resulting from Convention 108+ of the Council of Europe and the GDPR.

This bill is also inspired by the principles resulting from Directive (EU) 2016/680.

The bill is divided into ten chapters and contains 114 articles (instead of the 26 articles present in the current law),in addition to the accompanying explanatory statement.

Its main contributions are the disappearance of a certain number of prior formalities applicable to data controllers, the introduction of the office of Data Protection Officer, and new obligations such as the realization of impact analysis, or the keeping of a directory of processing.

Another novelty concerns the strengthening of the sanctioning powers of the future Personal Data Protection Authority (PDPA), which will replace the current commission (CCIN).

At this stage, a rapporteur has been appointed within the National Council (Parliament) in order to analyse the bill and present possible amendment proposals in view of a vote by the parliament.

There is no foreseeable date of entry into force of the new law in Monaco.

Intellectual Property:

The protection of literary and artistic works is currently the subject of an in-depth legislative reform.

A bill is currently being discussed in Parliament in order to harmonize the Monegasque copyright regime as much as possible with the one in force in neighboring countries, and to establish a legal regime for intellectual property issues left unresolved by the current legislative and regulatory framework.

Recently, the regime and the amount of the resale right have been reformed in the light of the provisions of Directive 2001/84/EC of the European Parliament and of the Council of 27 September 2001 on the resale right for the benefit of the author of an original work of art.