MONACO: An Introduction to General Business Law: Law Firms - Avocats-Défenseurs
General Presentation
The Principality of Monaco, a sovereign microstate with about 38,000 inhabitants (of whom 9,500 are Monegasque nationals), is a strategic location for business at the heart of Europe and the Mediterranean basin and at the gateway to the French and Italian Riviera.
Monaco is a hereditary and constitutional monarchy, headed by His Serene Highness Prince Albert II (part of the 700-year-old Grimaldi dynasty), which enshrines the separation of executive, legislative and judicial powers, and asserts the rule of law over all institutions.
Monaco is a member state of the United Nations and the Council of Europe. Although it is a third state to the EU, given its privileged relations with France, Monaco belongs to the EU customs territory and the eurozone and is included in the Schengen area.
Monaco is an attractive place for investors, thanks to its political stability, the safety of people and their property, its multicultural community (139 different nationalities) where the English language is commonly spoken (with French being the official language), an administration of proximity, an original economic and social model without budgetary deficit, an adapted tax system, and its dynamic employment and consumption pools.
The leading sectors in Monaco are real estate and construction, wealth management, luxury, yachting, sport, and business tourism. The digital sector is booming (sales have increased by 41.1% during the past decade).
Monaco’s GDP for 2022 was EUR8.34 billion (average annual growth rate of 4.6% during the past decade). GDP per capita was EUR91.353 (8.2% increase from 2021) and GDP per employee was EUR137.831 (6.8% increase).
Authorisation Prior to Business
Non-Monegasque nationals wishing to carry out any economic activity must first be authorised by the Minister of State.
Specific rules apply to regulated activities such as banking, financial, insurance, real estate and construction activities (experience, corporate structure, amount of capital, etc).
Business Forms and Opening of a Bank Account
Persons wishing to set up a business in Monaco may apply individually or create a company, in the form of a Monegasque limited company (société anonyme monégasque, or SAM), a limited liability company (société à responsabilité limitée, or SARL), a limited partnership (société en commandite simple, or SCS) or a private company (société en nom collectif, or SNC). The current reform of company law envisages the creation of the single-member limited liability company (société unipersonnelle à responsabilité limitée, or SURL).
Since 2020, companies have been obliged to open an account with a credit institution in Monaco.
Flexibility and contractual freedom characterise Monaco corporate law.
Taxation and International Tax Compliance
Businesses carrying out a commercial or industrial activity and generating more than 25% of their turnover outside Monaco, as well as any income received from patents and copyright by a company, are subject to corporate income tax (at a rate of 25%).
As the French and Monegasque territories form a customs union, French customs regulations apply directly in Monaco, and VAT is levied on the same basis and at the same rate as in France (usually 20%).
Sales of building land and buildings occurring within five years of their completion are subject to VAT on property transactions (at a rate of 20%). Other transactions on real estate are subject to registration duties (at a rate of 4.75% when the acquisition is made by an individual or a transparent vehicle and 10% failing that).
There is no tax on capital gain.
Monaco complies with OECD standards. It is a party to the Convention on Mutual Administrative Assistance in Tax Matters, the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information, and the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting.
Private Sector Employment
In 2023, Monaco had 58,326 employees in the private sector (a 5.1% increase from 2022), including 85% in the service sector and 14.6% in the manufacturing sector. More than 130 nationalities are represented in the private sector (1.7% Monegasque, 60.8% French, 15.3% Italians, 7.2% Portuguese, and 1.2% British). Nearly 90% of private sector employees live outside Monaco – mostly in the French neighbouring cities.
Labour law in Monaco is very specific. Work permit requirements and the hiring priority system – but also flexibility – are important characteristics that apply to Monegasque employment contracts. Monaco has legislation on teleworking ( and has 5,690 teleworkers).
Real Estate and Construction Activities
With a mean price per square metre of EU51,418 in 2023 (an increase of 60% over the past decade), Monaco has one of the most expensive real estate markets in the world. It is a reliable source of rental income and capital gains on resale.
New constructions and evolving infrastructures are integrated into the government’s policy of sustainable development – for example, the eco-district, an offshore extension that houses 60,000 square metres of highly luxurious accommodation.
The profession of property trader was reformed in 2024 to be more regulated.
Banking and Financial Activities
In 2023, Monaco had 25 banking institutions and 65 asset management companies (totalling 3,125 employees) – the resources of which resources amounted to EUR158 billion, including EUR85.6 billion of assets managed and/or advised from Monaco (an increase of 15.4%).
Asset management companies are authorised by the Commission de Contrôle des Activités Financières (CCAF), which is an ordinary member of the International Organization of Securities Commissions (IOSCO). Their discretionary management and advisory services for foreign funds and portfolios have seen a strong increase in activity.
Banking institutions are authorised by the French Autorité de Contrôle Prudentiel et de Résolution (ACPR) and the Monaco CCAF as regards their financial activities. Their asset management activities are increasing.
The regulatory and prudential organisation of banks is governed by the French Monetary and Financial Code, in accordance with treaties that were entered into with France, and a monetary treaty that was entered into with the EU. By contrast, relations between the banks and their clients are governed by Monegasque law.
E-commerce and Digital Activities
Monegasque legislation relating to e-commerce, online service platforms (such as search engines, price comparators, marketplaces, classified ad sites, and social networks), providers of online advice from consumers, and technical service providers (eg, trust services such as e-signature, hosting, cryptology) has been reshaped in the light of EU standards to ensure interconnectivity.
Blockchain is legally recognised and Monaco has adopted a legal framework regulating the activities of digital asset and crypto-asset service providers, including fundraising using this technology (initial coin offerings and security token offerings) to attract innovative and ethical companies.
Monaco is fully 5G and fibre covered and focuses on the internet of things (IoT) and the technologies of the future – such as metaverse (legally recognised) – in leading sectors (real estate, wealth management, luxury, yachting, sport, and business tourism) via the creation of financing structures or the setting-up of dedicated start-ups through the “MonacoTech” business incubator.
The “Extended Monaco” programme is dedicated to the digital transformation of Monaco (e-government, smart city, health, etc).
AML/CFT and Anti-Corruption Laws
Monaco’s AML/CFT legal provisions follow the Financial Action Task Force (FATF)/MONEYVAL recommendations and are equivalent to those of the EU. (Monaco implements the AML/CFT Directives in accordance with its obligations under the monetary treaty with the EU.)
According to the standards of the Council of Europe, Monaco penalises corruption (bribery or trading in influence) by civil servants, members of government and Parliament, international and foreign public officials, and employees in the private sector, as well as by magistrates, arbitrators and jurors.
Personal Data Protection Law
Monaco complies with the standards of the Council of Europe (Convention 108+) and reformed its legislation in 2024, adopting EU standards (ie, the General Data Protection Regulation) to facilitate cross-border flows of personal data.