Setting up a business in Monaco
The practice of a commercial, craft or industrial activity or a service sector activity requires an authorization from the Royal government. The authorization is granted or refused according to the guarantees furnished by the applicant and the interest that the project presents for the economy of Monaco. In order to obtain an authorization to set up a business in Monaco, the applicant must request an application form from the Direction de l'Expansion Economique, and duly return the dossier to the same service.
Legal structures possible for businesses
There are a variety of different legal forms possible for setting up an economic activity in the Principality. For commercial enterprises, the following structures are available :
- General Partnership (S.N.C.)
- Limited Partnership (S.C.S.)
- Limited Partnership with Shares (S.C.A.)
- Monegasque Limited Company (S.A.M.)
- Société à Responsabilité Limitée (S.A.R.L)
Foreign companies may also locate a branch or administrative office in the Principality. Any person whose status so permits may create a Trust.
Exchange with foreign country
As specified in certain Franco-Monegasque agreements, regulations concerning customs and currency exchange are the same in Monaco as in France. The two States constitute a Customs Union and there is, thus, complete freedom of movement of capital between them. Although Monaco is tied to France within the framework of European Economic Community customs territory regulations, Monaco is not a member of the EEC.
Special exemptions for new companies and research
In order to encourage the creation of
companies and to develop the scientific and technical research sector, the
Royal government offers certain fiscal advantages. In fact, these firms
are eligible for tax breaks. A tax credit of up to 40 million French
francs may be granted. All firms created in the Principality and subject
to the company tax on profits are exempted from tax for the first two
years and partly exempted for the third year.
Any person or company wishing to hire
personnel must receive an authorization to hire and must register the
personel at the Social Service Compensation Fund (Caisse de Compensation
des Services Sociaux - CCSS ) and at the Independent Pension Scheme Fund
(Caisse Autonome des Retraites - CAR).
This registration gives the employee certain rights :
- family subsidies for dependant children,
- partial reimbursement of medical fees in case of illness
- as well as a retirement pension.
The following are the current social security contribution rates for employers :CCSS: 16% of the gross salary to be paid by the employer
CAR: 7,04% of the gross salary to be paid by the employer
6,15% of the gross salary to be paid by the employee. In certain cases, employers may be eligible for exemption.
Contributions identical to those paid by employers in France must be paid to various services for unemployment insurance coverage and additional retirement pensions for executive and non-executive employees.
The total employer's share of social security contributions on salaries represents an average rate of 33%.