How To Start A Business In Monaco

The Principality of Monaco is nestled along the French Riviera and spans a total of 2km. Despite its small size, the country is renowned for its wealth and luxury offerings. Home to massive casinos and the Formula 1 Grand Prix, Monaco offers a glamorous lifestyle like no other.

In addition to its prestige, the country is gaining momentum in its startup friendliness, attracting entrepreneurs from all over the world. Whether you’re after specific clientele or want to benefit from the tax advantages, starting a business here has limitless opportunities.

Why Is Monaco A Good Location For Startups?

Monaco has seen a steady growth in new startups over the last decade. Here are a couple of reasons why this is the case.

Tax advantages: The country is known for having corporate tax rates that are highly competitive compared to elsewhere in Europe. Additionally, residents do not need to pay any personal income tax.

Location: Monaco is located in Western Europe with easy access to other major cities like France and Italy.

Quality of living: The standard of living here is exceptional with world-class amenities, in addition to being safe and clean.

Wealthy customer base: Monaco has one of the highest GDP per capita in the world despite being the second smallest country, providing access to an affluent market for startups.

Best Industries To Consider Starting A Business In

Monaco is home to approximately 39,000 residents and while this may seem on the small side, there are plenty of niche industries to innovate in.

Luxury services: Aside from residents, the ultra-wealthy love to visit Monaco for vacation. This offers a range of opportunities in the bespoke travel and luxury goods sectors.

Real estate: As the country sees an increase in expats, the need for residential development and rentals continues to grow to accommodate them.

Yachting: This is a popular activity when visiting Monaco, so entrepreneurs could innovate in yacht charters and repairs.

Technology: Monaco is becoming a growing tech hub, specifically in clean tech and smart city innovations.

Tax Regulations In Monaco

While Monaco is known for its tax-friendly regulations, there are a couple of factors to keep in mind. Residents don’t need to pay any income personal tax except for French nationals.

Companies who earn more than 25% of their turnover outside of the country or work on the commercial and industrial sectors are required to pay a corporate tax rate of up to 25%. Those who have income generated within Monaco itself are generally exempt from this tax.

Due to Monaco being a part of the EU customs union, they have a standard Value Added Tax (VAT) rate of 20%.

Visa And Residency Requirements For Foreigners

Any individual who plans to stay in Monaco for more than three months of the year need to apply for a residency permit. To obtain this, proof of finances and accommodation will need to be made available. Startup founders are able to apply for residency by proving that they intend on starting a legitimate business.

EU nationals are not required to have a work permit but still need to apply for residency. For Non-EU nationals, a residence card and work authorisation is required.

Monaco doesn’t have a specific Golden Visa program however, its Residency by Investment Program is worth looking into.

Are There Any Challenges To Consider Starting A Business In Monaco?

Starting a business in any country will have its own potential challenges in addition to its opportunities. In Monaco specifically, there may be a few hurdles that you could encounter along the way.

Costly expenses: Buying property or even renting in Monaco is incredibly expensive which may be off-putting for entrepreneurs on a budget.

Small market size: The country’s population is much smaller than neighbouring countries so scaling a business could be challenging.

Language barrier: Monaco’s official language is French and most documentation will be in it too. For foreigners who can’t speak it, a translator may be needed for assistance.

Competition: Due to a smaller population, competition between businesses remains fierce especially in the luxury and services sectors.

How To Start A Business In Monaco

If you have decided that Monaco is the ideal destination for your business, here is a step-by-step guide on how you can get the process started.

Select A Legal Structure:

The two most common business structures in Monaco are:

Société à Responsabilité Limitée: This is a limited liability company with a minimum capital amount of €15,000 required.

Société Anonyme Monégasque: A public limited company with a minimum capital amount of €150,000 required.

Sole proprietorships or partnerships are also options to consider.

Reserve Your Company Name

You can submit your desired company name to the Department of Economic Expansion who will then approve or deny it depending on whether or not it is already in use.

Deposit Share Capital

The next step is to open a Monegasque bank account to deposit the required capital amount if applicable.

Submit The Business License Application

Every new business in Monaco needs approval from the government. You will need to submit a detailed file that includes your business plan, company statutes, proof of funding, a lease or title for your premises and relevant information about your directors and shareholders.

This approval process can take anywhere between 1 – 3 months.

Register The Business

Once your license has been approved, you can register the company with Monaco’s Trade and Industry Register as well as the tax and social security offices.

Should You Start A Business In Monaco?

Starting a business in Monaco can be a great opportunity especially for those who plan on offering high-end or niche products and services. The country’s low taxes and luxurious lifestyle have made it an incredibly attractive place for business owners, and it can certainly be a rewarding venture.

If you are able to navigate the potential challenges like language barriers and expensive costs of living, this Mediterranean gem may be the place for you.

Good luck!