Single Family Offices in the Principality of Monaco

 

Monaco has a long tradition of welcoming Families of many nationalities to live here.  Families move to Monaco to enjoy the benefits of excellent Health Care, Schools, Safety and Security of the person. Monaco’s geographical position in Europe, on the Mediterranean Sea, boasting a beautiful Port dedicated to Yachting and an iconic Yacht Club, with the Alps behind, immediately next to the French and Italian Rivieras makes it a sporting paradise. The Euro as its currency, regulation by the Bank of France, Monaco’s Political Security having been reigned over by the Grimaldi family for more than 700 years, its Climate and Culture, and desire for Confidentiality, its proximity to world class Road and Air networks, make Monaco one of the most attractive places in the world in which to live and work.

 

So Families have thought to set up their own Private Office or Single Family Office in Monaco to manage some or all of their private affairs (whether financial, educational, charitable, generational, business, succession, or asset based).

 

On moving to Monaco the Family will tend to keep any existing asset holding structure intact (for example they may have set up Trusts or Foundations in other territories to own assets such as works of art, boats and planes, investments, or businesses) and these will most likely remain unchanged. The role of the Monaco Single Family Office will be to control and manage some part of the Family’s affairs and assets; it will not be to own those assets.

 

Monaco has adhered to the Hague Trust Convention for example, to demonstrate that it supports the institution of a Trust for asset holding purposes.

 

The Directors and Employees of a Monaco Single Family Office, not just the Family members, enjoy the pleasures and advantages of living in this region too, so Monaco becomes a place in which staff retention and loyalty can thrive.

 

These Monaco Single Family Offices can take many forms and can be set up for different purposes.

 

Provided the Single Family Office exists to service the same family members it does not require any business licence to exist. To the extent anyone is employed in such a Single Family Office Monaco’s Immigration/Employment regulations will need to be complied with.

 

Possibly the Family will choose to set up an entity in which to employ its Single Family Office staff, if a Family member does not want to employ staff personally in Monaco … depending upon the form of that entity it may be necessary to seek approval for incorporation from the Monaco Government.

 

For example no consent will be required to employ individuals through a Monaco Société Civile (such a Société Civile does not need Monaco Government consent in order to be formed). However if the chosen entity were, say, a Monaco Société à Responsabilité Limitée/SARL (a Monaco Limited Liability Partnership) or a Société Anonyme Monégasque/SAM (a Monaco Limited Liability Company), or perhaps the Monaco branch of a Company incorporated abroad, it will be necessary to obtain Monaco Government consent to form the Monaco entities or open a branch (succursale) in the Principality.

 

A Single Family Office set up in Monaco in any of the forms described can employ as many or as few people as desired, provided Monaco Immigration and Monaco Employment laws are respected. Since Monaco is not a Member State of the EU Monaco has its own legislation to deal with these issues.

 

Because a Single Family Office is likely to carry out an activity which is civil in nature (this means that it will not trade) then no Monaco Profits Tax will arise (that is because Monaco Profits Tax only arises on a commercial or an industrial activity). Managing one’s own assets in Monaco does not constitute a commercial activity.

 

If it is desired to set up a Single Family Office with commercial/trading status (this has been the route taken by certain ship owning families for example) this is possible too, in which case the fiscal status and Monaco Profits Tax implications need to be analysed. There may be Monaco Profits Tax and Monaco VAT implications.

 

Single Family Offices are not subject to regulation in Monaco, such as Anti-Money Laundering or Financial Services Regulation, because they are essentially private operations although they will still need to heed Data Protection legislation.

 

But there is a trend for some Families to set up a Monaco office to co-invest with other Families … in this way they do then submit to Monaco’s regulatory environment, and are then required to set up as a SAM and respect capital and other requirements, but this enables such a Family Office to boast that it is regulated in Monaco by the SICCFIN, the CCIN, and the CCAF (respectively Monaco’s Anti-Money Laundering, Data Protection, and Financial Services Regulatory bodies)  which can be advantageous in the context of international investing.

 

Certain Families have chosen to do both …. set up a Single Family Office for their purely private family affairs (unregulated) and separately to set up a regulated entity (a SAM) the purpose of which is to work with other Families on common investment projects. This might give rise to setting up a dedicated Monaco Fund which is easily done.

 

Tempest Legal Services Monaco can help with all the formalities and introductions required, whether to other professionals, Monaco Government or Monaco Regulators in order to set up a Family Office in the Principality of Monaco.

 

 

 

 

(August 2014)

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