Monaco: An Overview
General Presentation
The Principality of Monaco is a small and highly attractive state located on the French Riviera. It is headed by the Grimaldi family, a dynasty that has ruled for over 700 years, and is currently led by His Serene Highness Prince Albert II, renowned globally for his dedication to sustainable development. While Monaco joined the Council of Europe in 2004, it remains outside both the European Union (EU) and the European Economic Area (EEA).
Monaco is home to a cosmopolitan population of nearly 40,000 residents representing 120 nationalities, including approximately 9,500 Monegasques, 10,000 French, 5,000 Italians and 2,000 British citizens. Its private sector employs more than 58,000 individuals, most of whom commute daily from neighbouring French and Italian towns.
In 2024, Monaco’s GDP reached EUR10.3 billion. A significant portion of the Principality’s income comes from its share of French VAT. Three key sectors account for nearly half of its economic output:
- scientific and technical activities, administrative and support services (23.5%);
- financial and insurance services (17.6%); and
- wholesale trade (8.6%).
In 2025, the legal and regulatory landscape continued to evolve in line with the trends observed in 2024, with significant legislative developments in anti-money laundering (AML) and corporate law. In 2024, Monaco was placed on the grey list of the Financial Action Task Force (FATF). Since then, the authorities have undertaken significant efforts to address the identified shortcomings, with the government, supervisory bodies and market participants working towards the shared objective of securing Monaco’s removal from the grey list. In this context, a number of legislative, regulatory and sanctions have already been introduced, and the legal framework continues to evolve in order to align with FATF recommendations and strengthen the jurisdiction’s AML/combatting the financing of terrorism (CFT) regime.
The significant milestone of the Mareterra district, a luxurious offshore extension into the Mediterranean Sea, has continued its expansion with the opening of new restaurants and boutiques. DL Corporate & Regulatory is proud to have supported restaurants opened in early 2025 as part of this ambitious project.
Monaco’s real estate market remains one of the most expensive globally, with average property prices exceeding EUR57,569 per square meter. Several major development projects are either underway or nearing completion, further shaping the Principality’s skyline and infrastructure.
Monaco continues its "Extended Monaco" programme, focused on digital transformation and big data management. This initiative aims to enhance living standards and public services through innovations such as:
- comprehensive 5G coverage;
- a sovereign cloud infrastructure;
- high-performance mobility solutions;
- advanced medical technologies and coding education; and
- cleantech innovations.
In addition to improving quality of life for residents, the programme seeks to position Monaco as a premier global business hub. In seeking to enhance attractiveness and the development of sustainable infrastructure projects, the state of Monaco, through various SPVs, has invested in diversified ventures outside of Monaco, such as the Nice airport and the Ventimiglia port and marina, and is considering further investment in transportation, energy and telecoms.
Legal And Regulatory Background
The Principality of Monaco, as a sovereign state, maintains its own legal system, which encompasses its laws, regulations, court system and regulatory authorities.
Although Monaco is not a member of the EU, it shares specific ties, including a customs union with France, placing Monaco within the EU customs territory. These ties also include membership of the Eurozone and alignment of the VAT system with that of France (applying the same rates).
The Principality is focused on protecting its nationals and preserving their living, working and housing conditions, with priority rules in a number of areas such as housing and employment. The preservation of these characteristics has led to the suspension of the negotiation between Monaco and the European Commission for an Association Agreement to enable participation in the EU’s internal market.
Business activities requiring prior authorisation – corporate law
In Monaco, business activities conducted by non-Monegasque individuals are subjected to prior authorisation from the authorities. Certain regulated sectors, such as banking, insurance and financial services, are subject to additional requirements, including specific legal structures, minimum capital thresholds, qualified management and adequate infrastructure and staffing.
In 2025, Monaco has implemented significant reforms to its corporate law framework, reflecting the intention to modernise corporate governance, enhance legal certainty and strengthen the Principality’s attractiveness as a business and investment hub.
Banking and financial activities
Monaco's financial sector consists of 24 banking institutions and 68 asset management companies employing approximately 4,000 individuals and managing assets of nearly EUR100 billion. The sector continues to experience a trend of consolidation through mergers and acquisitions, with DL Corporate & Regulatory continuing to serve as the leading adviser for these transactions.
The banking and financial regulatory framework in Monaco is characterised by a complex institutional structure. As the Principality is not a member of the EEA, EU passporting rules do not apply. Nevertheless, through a number of agreements concluded with the EU, several EU regulatory instruments – including the Capital Requirements Regulation (CRR), Capital Requirements Directive IV (CRD IV), Payment Services Directive (PSD) and European Market Infrastructure Regulation (EMIR) – are applicable within the jurisdiction.
Pursuant to the 1945 monetary and banking arrangements concluded with France, certain French banking regulations apply directly in Monaco. Banking licences are granted by the French Autorité de Contrôle Prudentiel et de Résolution (ACPR), in collaboration with the Monegasque authorities – notably the Direction du Budget et du Trésor (DBT), a department of the Ministry of State.
Portfolio and investment management activities carried out on a habitual or professional basis may only be performed by entities authorised and supervised by the Commission de Contrôle des Activités Financières (CCAF). In recent years, Monaco’s financial activities framework has undergone significant reform, strengthening the regulatory obligations applicable to licensed entities while introducing a general prohibition on the active solicitation of investors in Monaco by non-authorised firms.
Privacy and data protection
The Principality of Monaco ratified the Council of Europe Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data, along with its additional protocol, in 2008.
In 2024, Monaco reached a pivotal milestone in its data protection regime with the adoption of Law No 1.565 of 3 December 2024. This legislation aligns the Principality’s framework with the EU General Data Protection Regulation (GDPR), thereby establishing Monaco as a jurisdiction recognised for an adequate level of privacy protection. The year 2025 has been marked by a focus on supporting businesses and organisations in achieving compliance with these new obligations. Authorities and professional advisers have worked closely with data controllers and processors to implement the internal policies, procedures and safeguards necessary to meet Monaco’s GDPR-aligned requirements, reflecting a concerted effort to operationalise the legislative reforms.
AML and anti-corruption measures
Monaco enforces one of the world’s strictest AML regimes, with robust administrative and criminal sanctions in place. As a member of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), the Council of Europe’s permanent AML monitoring body, the Principality implemented the EU 5th AML Directive on 23 December 2020.
Monaco’s anti-bribery legislation addresses the giving or receiving of gifts, commissions or other advantages in connection with acts or omissions by recipients – including civil servants, international or foreign public officials, private sector employees, magistrates or jurors – in the course of their duties. These rules are currently under review concerning magistrates, in line with Group of States against Corruption (GRECO) recommendations.
Monaco continues its effort to bolster its legislative arsenal to combat money laundering and reinforce compliance with international standards.
E-commerce, e-signatures and digital innovation
Monaco is connected to the Europe-India-Gateway and was one of the first countries in the world to be fully 5G-covered, with high-quality internet connection for computers, mobile phones and all other connected objects (connected cars, etc).
Monaco has adopted token offering regulations by the Monaco Parliament. This legislation, along with its implementing Sovereign Ordinances, established a legal framework for token offerings, creating an innovative funding mechanism for Monaco-based companies. The framework aims to enhance Monaco’s reputation as an attractive financial hub while safeguarding investor interests and the Principality’s credibility.
Since August 2011, when Monaco introduced its first law dedicated to digital activities, the Principality has consistently updated its regulations to support e-commerce, e-signatures and emerging technologies like blockchain.
As part of the "Extended Monaco" programme, the Principality achieved another milestone in its digital transformation in 2022 by launching an online service for obtaining registration extracts from the Monaco Trade and Industry Registry.
Monaco’s unique legal specificities
Efforts to simplify Monaco’s historically strict corporate rules have been successful, including abandonment of the prohibition on sole-shareholder companies and the requirement for directors to hold shares. These changes provide investors with greater flexibility and simplify the Principality’s legal environment, reflecting ongoing efforts to enhance the business framework while maintaining the necessary regulatory safeguards.
Monaco’s regulators continue to take a strict approach to the sales of shares and businesses, which are subject to certain registration requirements and fees – including the requirement for narrow corporate objects clauses, regardless of activity type.
Employment law has formal requirements such as a priority order in hiring and firing practices. Additionally, foreign investment regulations influenced by changes in French law have introduced complexities in regulatory filings for sensitive industries.
These legal specificities call for meticulous planning in corporate and M&A transactions involving Monaco entities.
The legal landscape in Monaco underwent significant transformations in 2025, particularly in corporate, employment and AML. These developments, alongside ongoing modernisation efforts, reflect Monaco’s commitment to aligning its regulatory framework with international standards while preserving its unique identity.