Company registration in Monaco

Company registration in the Principality of Monaco

 Company (SARL) (société à responsabilité limitée – Limited Liability Company) can be registered in Monaco and provided with a legal address.The position of the director can be hold by a resident of Monaco or by the person living in a radius of 30 km from Monaco.
Foreign citizen may alternatively hold a position of a second director.What considers taxation – everything will depend on the specific situation.

Income tax

The general principle of Monacan tax system is the complete absence of any direct taxes. However, there are some exceptions from this rule:

1. The tax on income from business activities shall be paid by companies registered in Monaco, whose income from foreign operations is not less than 25% of the turnover, as well as the companies that receive income from the sale of patents, trademarks, technologies, etc. Foreign operations refer to the sale of goods or provision of services outside of Monaco, as well as to the export operations.
   The income of foreign companies is taxed if they operate in Monaco through a permanent representation and, if the income from foreign operations is not less than 25% of annual turnover.
   The tax rate is 33.33%.
2. Natural personsof Frenchnationality,who don’t havea five-year termstay on the territoryof Monacoas the permanentresidentforeigners from 10/31/1962, shall pay the income taxin France.

Tax at source

• Tax at source on dividends, interest payments and royalties paid to the company, will not be charged.

VAT

• Monaco applies the French tax regime in respect to VAT (except some modifications).
• The standard rate is 20%. It is possible that reduced rates on certain goods and essential services, medicines, printed editions, etc will be applied.

Taxation of individual income

• Individual income tax (resident) is not specified in Monaco. However, in respect to interest payments in favor of non-residents of Monaco (but EU residents) the tax at source is specified. The tax is not levied if the state, whose resident is the recipient of payment, has signed an Agreement with Monaco.

There is a possible optimization of taxation, taking into account every specific situation.

The costs for maintaining the company of SARL (société à responsabilité limitée – Limited Liability Company) organizational and legal form in the Principality of Monaco:

1. Non-recurring costs for the registration of company in Monaco1.1. 8.000 EUR – servisec of the 5 Stars Europe
   1.2. 700 EUR – registration fee
   The authorized capital in the case of monetary contribution shall be vested in the amount of at least 15.000 EUR. The capital can be vested in the form of tangible assets. In future the Client on his own discretion can use these funds.
2. Minimum costs for maintaining the company:2.1. about 5000 EUR per year – payment of social and pension’s contributions
   2.2. about 500-1000 EUR per year – accounting costs
   2.3. office expenses (the price will depend on the office, which is rented).

At least for the first year it will cost from 700 EUR per month.