October 31, 2023
Monaco Legislature considers draft legislation to allow single-shareholder limited liability companies and innovation companies limited by shares; two new Double Tax Treaties signed
Proposed legislation being considered in Monaco would make changes to the Commercial Code (promulgated on 5 November 1867 and declared executive from 1 January 1878) to allow the creation of two new types of companies.
Legislative proposal No. 256
Legislative proposal No. 256 aims to modify the provisions of the Commercial Code, adding article 35 bis, to create a "Limited Liability company with sole shareholder" (SURL), composed of a single member whose liability is limited to the amount of his contributions.
The rules regarding a "Société à Responsibilitée Limitée" (SARL) apply to SURLs.
The minimum share capital of SURLs is €5,000 if the sole shareholder is a natural person and €15,000 if the sole shareholder is a legal person.
The company is managed by one or more agents, whether partners or not, paid or acting free of charge, to the exclusion of any legal entity.
The transformation of the SURL into a SARL is not subject to the sole shareholder's release of a new declaration or administrative authorization to operate. The transformation of a sole proprietorship into a SURL is not subject to the issuing a new declaration or administrative authorization to operate.
This is an innovation that will allow greater flexibility in choosing the type of company to establish, permitting a sole shareholder (SURL) rather than a minimum of two shareholders (in the case of SARL), potentially resulting greater stability in management by avoiding conflicts between shareholders.
As this is a bill, updates will be posted as developments occur.
Legislative proposal No. 257
Legislative proposal No. 257, introducing article 44 bis to the Commercial Code, aims to create a "Company of Monegasque Innovation by Actions" (SIMA for "Société d'Innovation Monégasque par Actions"), allowing the development of innovative projects using a specific regime meeting the needs of both startup creators and investors.
The creation of the new SIMA companies will make it possible to develop and sustain their activity.
The main features of a SIMA company include:
As this is a draft law, updates will be published in the event of developments.
New Double Tax Treaties signed with Monaco
At the end of 2022 and in the first months of 2023, the Principality of Monaco signed the following bilateral conventions against double taxation:
These conventions are in addition to those already in force with Monaco and initialed in previous years, specifically: France, Guernsey, Liechtenstein, Luxembourg, Mali, Malta, Mauritius, Qatar, Saint Kitts and Nevis, Seychelles, United Arab Emirates (not yet in force).
For additional information with respect to this Alert, please contact the following:
Ernst & Young Société d'Avocats, Paris
Ernst & Young Audit Conseil & Associés, Monaco
Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor