Did you know? Commercial premises in Monaco

The Principality of Monaco benefits from a strong economic attractiveness due to the stability of the country, attracting many Monegasque residents and foreigners to start their professional activities here. Today, there is still a lot of confusion among the different options that the Principality has to offer entrepreneurs in terms of commercial premises and the way in which their activities are run.

We propose here to review the different options available to them.



Does the commercial lease entail the granting of commercial property to the tenant ?

The lease for industrial or artisanal commercial use is governed by the law No. 490 of November 24th, 1948, modified and completed by the law No. 1.287 of July 15th, 2004. It is signed for a 3, 6, 9 year term.

A tenant who has been managing business assets for at least three consecutive years is entitled to the renewal of his/her lease or, if appropriate, to payment of an eviction allowance to compensate for the damage caused by the non-renewal. Commercial property is therefore a mechanism that protects the trader to allow him/her to remain in the premises at the end of his/her lease. Stability is indeed essential for a business, as the clientele generally constitutes the main element of the business. In the event of disagreement between the manager and the lessor and after an attempt at conciliation has failed, the Arbitration Commission for Commercial Leases (ACCL) will rule.

 

Is it compulsory to enter into a commercial lease to carry out a commercial activity?

This is not compulsory, and several solutions are available to traders, craftsmen and professionals:

  • to conclude a lease at will for a maximum period of 35 months to avoid the application of commercial leases status resulting from law No.490 of November 24th, 1948. Some owners also wish to do this in order to have at their disposal their premises without having to pay any compensation to their tenants.
  • to conclude a management lease granted by the owner of business assets to a natural or legal person so that the latter can operate it in return for the payment of rent. This contract is for a fixed term and may not be tacitly renewed; renewal is by deed or private agreement.
  • to conclude an office use lease subject, or not, to the law No. 1 433 of November 8th, 2016.

 

Whether it is a lease at will or a commercial lease, commercial property is not awarded to the tenant.

 

Why renting offices subject to law No.1433?

This Monegasque particularity makes it possible, when the parties have so decided, to rent premises allocated to the exercise of intellectual work, as well as to that of the administrative services related to it, and thus to secure relations between lessors and commercial companies for their offices of an administrative nature.

Choosing this legal system makes law No. 490 inapplicable: the lessor cannot require payment of a key money when the premises are made available, while the tenant cannot claim payment of an indemnity when he/she does not renew his/her lease.

The tenant may receive customers in the rented premises where, in addition, no goods are delivered or stored, and where no commercial, industrial or craft activity is carried out. If the tenant is a legal entity under Monegasque law (including a commercial company), it may establish its headquarters there.

This lease must be concluded for a period of at least 5 years, renewable by tacit agreement for an equivalent period in the absence of a notice period of 6 months. However, the tenant may terminate the lease at any time at the end of the one-year period from the date the lease comes into force, subject to six months' notice.

Where the parties have decided not to subject the office use lease to this law, the conditions relating to price, duration and notice are unregulated.

 

Can a professional activity be registered in a dwelling?

Premises which are used by a tenant or owner as a principal residence may also be used for business purposes under the following terms and conditions:

  • there is no legislative, regulatory or contractual provision opposed thereto;
  • the activity does not involve reception of customers or the storage or display of merchandise;
  • no employees are hired.

However, the terms and conditions differ according to the legal form of the company:

  • If it is a sole trading/proprietorship, there are no restrictions imposed by the regulations on the time or duration of the domiciliation. The duration of the domiciliation in the private sector corresponds to the duration of the lease. In the state-owned housing, it is agreed that the duration of the domiciliation cannot exceed one year.
  • In the case of a commercial activity carried out within the framework of a limited liability company, the settlement of the registered office at home is only allowed at the start of the activity and for a limited period: one year, renewable once.

In both cases, the operator or the manager must be the leaseholder, his/her spouse or hosted by him/her, it is specified here that if the operator is hosted by the leaseholder, he/she must be of Monegasque nationality.

 

All members of the Valeri Agency team, with its extensive knowledge of business and commercial real estate in the Principality, is at your disposal to offer you premises compatible with your situation.

Do not hesitate to contact us!

 

31 January 2022