US Tax Reality: A Monaco company provides NO tax benefits to US citizens. CFC rules, GILTI, and Subpart F mean you'll pay US tax on business profits regardless of where the company is located. Monaco corporate structures are useful for local operations and privacy, not tax avoidance.
Business Environment Overview
Monaco attracts businesses in specific sectors: finance, luxury retail, yachting, events, and professional services. The tiny market (40,000 residents) means most successful Monaco businesses serve international clients or the local ultra-HNW community.
Key Characteristics
- No personal income tax: Attracts entrepreneurs (but not Americans—US taxes worldwide)
- Corporate tax: 25% on businesses with 75%+ foreign revenue
- 0% corporate tax: For businesses with 75%+ Monaco revenue
- Small market: Limited domestic customer base
- High costs: Real estate and labor are expensive
- Exclusive clientele: Access to ultra-HNW market
Business Entity Types
| Entity Type |
Min. Capital |
Best For |
SAM
Société Anonyme Monégasque |
€150,000
(~$162,000 USD) |
Larger operations, multiple shareholders |
SARL
Société à Responsabilité Limitée |
€15,000
(~$16,200 USD) |
Small-medium businesses |
SCS
Société en Commandite Simple |
No minimum |
Family offices, partnerships |
SNC
Société en Nom Collectif |
No minimum |
Professional partnerships |
| Branch Office |
None |
Extension of foreign company |
SAM (Société Anonyme Monégasque)
The most common structure for substantial businesses:
- Minimum capital: €150,000 (~$162,000 USD), 50% paid up
- Minimum 2 shareholders (can be individuals or companies)
- Board of directors required (minimum 3 members)
- Annual audit required
- Bearer shares prohibited since 2021
SARL (Société à Responsabilité Limitée)
Limited liability company for smaller operations:
- Minimum capital: €15,000 (~$16,200 USD)
- 2-50 partners (associates)
- Managed by one or more gérants
- Simpler structure than SAM
- Partners' liability limited to contributions
SCS (Société en Commandite Simple)
Popular for family office and investment structures:
- No minimum capital
- General partner(s) with unlimited liability
- Limited partner(s) with limited liability
- Flexible management structure
- Often used for holding assets
Formation Process
Steps to Establish a Company
- Business plan approval: Submit detailed business plan to government
- Authorization request: Formal application to Direction du Développement Économique
- Background checks: Criminal record and financial due diligence
- Capital deposit: Deposit minimum capital in Monaco bank
- Draft statutes: Prepare articles of association
- Government approval: Ministerial order authorizing the company
- Notarial deed: Execute formation documents before Monaco notary
- Registration: Register with Commercial Registry (RCI)
Timeline
Expect 3-6 months from initial application to full registration. Government approval is discretionary—not all applications are approved.
Required Documentation
- Detailed business plan
- Criminal record certificates for all shareholders/directors
- Proof of financial means
- CVs of key personnel
- Proof of office space (lease agreement)
- Bank reference letters
- Passport copies and proof of residence
US Tax Obligations for Monaco Businesses
American shareholders in Monaco companies face significant US tax compliance:
- Form 5471: Required if you own 10%+ of a foreign corporation
- CFC Rules: US shareholders taxed on their share of certain income
- GILTI: Global Intangible Low-Taxed Income subject to US tax
- Subpart F: Passive income taxed currently to US shareholders
- PFIC: If company is passive, punitive US tax treatment applies
Bottom line: Monaco's 0% or 25% rate is irrelevant—you'll pay US tax regardless.
Corporate Taxation
| Situation |
Corporate Tax Rate |
| 75%+ revenue from Monaco operations |
0% |
| 25%+ revenue from outside Monaco |
25% on foreign-source profits |
| Holding companies (on foreign income) |
25% |
| Dividends to individuals |
0% (no withholding) |
Other Business Taxes
- VAT: 20% (aligned with France)
- Registration duty: 1% on capital at formation
- Annual license fee: Varies by activity
- Property transfer: 4.5% on business real estate
Employment Considerations
Hiring in Monaco
- Work permits: Required for non-Monaco residents
- Priority hiring: Monegasques first, then Monaco residents, then French residents
- Labor law: Based on French law with Monaco modifications
- Social charges: ~40% on top of gross salary
- Minimum wage: ~€2,000/month (~$2,160 USD) gross
Typical Salary Costs
| Position |
Annual Cost to Employer |
| Administrative assistant |
€40,000-60,000 (~$43,200-64,800 USD) |
| Mid-level professional |
€70,000-120,000 (~$75,600-129,600 USD) |
| Senior manager |
€150,000-300,000+ (~$162,000-324,000+ USD) |
Office Space Reality: Commercial rents in Monaco are among the world's highest. Expect €800-2,000/m²/year (~$864-2,160 USD) for office space. A small office (50m²) costs €40,000-100,000/year (~$43,200-108,000 USD) before fit-out.
Regulated Activities
Certain activities require specific licenses:
Financial Services
- Banking, insurance, asset management require CCAF authorization
- Stringent capital and compliance requirements
- Regular audits and reporting
Other Regulated Sectors
- Real estate: Agent licensing required
- Legal/accounting: Professional qualifications required
- Gaming: Société des Bains de Mer monopoly on most gaming
- Yacht services: Various maritime certifications
Popular Business Types
Family Offices
Monaco is popular for single-family offices managing ultra-HNW wealth:
- SCS structure commonly used
- Investment management, coordination of advisors
- Privacy and discretion valued
- US families must still report all assets to IRS
Yachting Industry
- Yacht management companies
- Charter operations
- Brokerage
- Marine services
Luxury Services
- High-end retail (requires government approval)
- Event planning and concierge
- Art advisory
- Luxury real estate services
Formation Costs
| Item |
Cost (SAM) |
Cost (SARL) |
| Minimum capital |
€150,000 (~$162,000 USD) |
€15,000 (~$16,200 USD) |
| Registration duty (1%) |
€1,500 (~$1,620 USD) |
€150 (~$162 USD) |
| Legal fees |
€15,000-30,000 (~$16,200-32,400 USD) |
€8,000-15,000 (~$8,640-16,200 USD) |
| Notary fees |
€3,000-5,000 (~$3,240-5,400 USD) |
€2,000-3,000 (~$2,160-3,240 USD) |
| Government fees |
€2,000-3,000 (~$2,160-3,240 USD) |
€1,500-2,000 (~$1,620-2,160 USD) |
| Total (excl. capital) |
€20,000-40,000 (~$21,600-43,200 USD) |
€12,000-20,000 (~$12,960-21,600 USD) |
Ongoing Compliance
- Annual accounts: Must be filed with government
- Audit: Required for SAM companies
- Tax returns: Annual corporate tax filing if applicable
- VAT returns: Monthly or quarterly
- Social charges: Monthly declarations and payments
- US filings: Form 5471 and related for American owners
Accounting Costs
Annual accounting and compliance costs typically range from €10,000-30,000 (~$10,800-32,400 USD) for small companies, more for complex operations.
Disclaimer: Business formation requirements are complex and subject to government discretion. This is educational information only. Consult Monaco legal and accounting professionals before proceeding. US citizens should also consult US tax counsel. Information current as of January 2026.