The Monegasque Real Estate Investment Company (SCI)

There are several types of civil companies under Monegasque law, including real estate investment companies (SCI), which focus specifically on real estate asset management. For simplicity, we will refer to them as “SCI.” These companies have a civil purpose and are not intended to engage in commercial activities. Below is an overview of their advantages, particularly in terms of taxation.

What are the benefits of creating an SCI in Monaco?

A Monegasque SCI allows multiple individuals to acquire real estate while avoiding the complexities often associated with co-ownership. The company’s statutes can define the manager’s powers, helping to prevent potential deadlocks among partners when making decisions.

It is also well suited for estate planning. In this case, it is the company shares that are transferred rather than the real estate itself, avoiding the complications of co-ownership and ensuring the preservation of the property assets.

From a tax perspective, Monegasque residents benefit from an exemption on inheritance tax in direct line (parents/children, spouses). However, French citizens may be subject to taxes ranging from 5% to 45%. Nevertheless, French residents can also benefit from this exemption if they inherit shares of a Monegasque company that owns property in France, provided that the property belonged to a Monegasque resident. This is based on a ruling by the French Supreme Court (Cour de cassation) dated October 2, 2015.

What are the conditions for creating an SCI in Monaco?

There are no nationality or residency requirements to establish a Monegasque company. Therefore, a French citizen or a resident of France can create an SCI in Monaco.

Unlike commercial companies, it is not necessary to obtain prior authorization from Monegasque authorities to set up a civil company.

An SCI must have at least two partners, and there is no minimum capital requirement imposed by law.

How to easily create an SCI in Monaco?

Civil companies in Monaco are governed by Articles 1670 to 1711 of the Monegasque Civil Code. The articles of association can be signed before a notary or under private agreement, with flexible drafting. For example, it is possible to limit the manager’s powers or set specific conditions for the transfer of shares.

The statutes must be registered with the relevant authorities, and the company must be listed in a special registry managed by the Business and Industry Registry (RCI Monaco).

Accounting obligations are simplified: it is only necessary to maintain a record of income and expenses at the company’s registered office.

Setting up an SCI in Monaco is an effective way to optimize the management and transfer of real estate assets. This option is accessible even if you are neither a Monegasque citizen nor a resident. Properties held by the SCI can also be located in other territories, such as France. Depending on your situation, different options are available. It is advisable to consult a professional beforehand to tailor your wealth management strategy.

3 key points to remember:

• The possibility of creating a Monegasque civil company with no nationality or residency conditions and no requirement for prior authorization from Monegasque authorities.
• A strategic tool for asset transfer, with potential inheritance tax exemption, including for properties located in France.
• A flexible legal framework with simplified formalities and accounting requirements.

Sources:

1 – Éditions Francis Lefebvre: “Succession of a Monegasque Resident: SCI Shares Are Not Considered Real Estate!” (French Supreme Court, Ass. Plén., 2-10-2015, No. 14-14.256) Link.
2 – LÉGIMONACO, Monegasque laws and codes. Link.