Acquisitions of real estate in Monaco by Foreign Companies

The Monegasque property market is renowned for its stability and international prestige, offering a secure and highly valued investment environment.

In Monaco, real estate may be acquired either in a personal capacity or through a corporate structure, whether incorporated in Monaco or abroad, as the Principality adopts a particularly open approach. Indeed, Monaco makes no distinction between Monegasque nationals and foreign purchasers with regard to property ownership.

This liberal policy forms part of the Principality’s desire to attract international investors, many of whom choose to establish corporate vehicles to meet asset-management, succession-planning, tax-optimisation and, in some cases, confidentiality objectives.

1. Why purchase real estate through a company rather than in one’s personal name?

As a preliminary point, it is important to recall that incorporating a company consists in creating a legal entity that is distinct from the natural person who establishes it. This entity, referred to as a legal person, has its own legal identity, assets, rights and obligations. It may therefore act, purchase, sell, enter into contracts and hold property in its own name, separately from that of its shareholder(s).

The Société Civile Immobilière (SCI) is a commonly used legal structure in Monaco for real estate investment, whether held by residents or non-residents (see our dedicated article via the following link: https://www.valeri-agency.com/en/monegasque-sci-the-reasons-for-continued-success.html.

A. Legal flexibility and asset management

Purchasing through a company enables ownership of the property not in direct freehold, but in the form of shareholding in the company, which offers several advantages:

Facilitated transfer: the transfer of shares is often simpler and less costly than transferring the property itself;
International asset-holding vehicle: the structure can form part of a broader asset portfolio or a family holding company managing various assets, which may be used by a family office to organise and structure the estate;
Streamlined co-ownership: several family members or partners may hold shares without creating a situation of joint ownership (indivision);
Flexibility upon resale: transferring the company’s shares may be more advantageous from a tax or treaty perspective than selling the property directly.

B. Enhanced confidentiality

In Monaco, the land registry is public, and every property owner is identifiable.

However, if the property is owned by a company, it is the name of the company that appears, rather than that of the ultimate beneficial owner.

This is particularly appealing to high-profile individuals—company executives, public figures, celebrities, athletes—seeking to protect their privacy, as well as to foreign investors who prefer their real estate holdings in Monaco not to be easily identifiable.

Nevertheless, this confidentiality is now relative: international regulations require the declaration of the ultimate beneficial owner, even if such information is not always made public; moreover, Monaco cooperates with other Western states in the exchange of information.

C. Legal protection of assets

Holding property through a company separates personal assets from real estate assets. This provides, on the one hand, enhanced protection of the property in the event of personal litigation, debts or personal insolvency, and on the other hand, limits financial risks to the company itself.

2. Acquisition of Real Estate by a Foreign Company

Monaco imposes no nationality-based restrictions on property ownership, whether the purchaser is an individual or a foreign company. Real estate may be acquired directly without any local registration, except where a professional activity is involved.

The most common reasons for acquiring property through a foreign company—in addition to those previously mentioned—include:

Tax alignment with the country of residence: if the investor is tax resident in another jurisdiction (e.g. Italy, France, Switzerland), purchasing via a company may facilitate tax management and reporting obligations in their home country;
Discretion: where the property is owned by a foreign company, the ultimate shareholder may be more difficult to identify publicly, particularly when the structure is “opaque”;
International estate planning: simplifying succession, transmission and share transfers;
Potential optimisation of capital gains taxation: in certain cases and depending on applicable tax treaties, capital gains realised on the transfer of company shares may be taxed differently (and sometimes more favourably) than a direct sale of Monegasque real estate.

Certain requirements nevertheless apply, including mandatory anti-money-laundering checks (source of funds, identification of the beneficial owner, banking compliance, reputation of the entity), the provision of complete corporate documentation (articles of association, certificate of incorporation, powers of attorney, certificate of good standing, apostilled documents), the signing of the notarial deed before a Monegasque notary, and payment via a Monegasque bank or notarial escrow.

However, the rules governing such acquisitions have recently evolved. Law no. 1.548 of 6 July 2023 introduced significant changes to the tax regime applicable to real estate transactions, strengthening the distinction between transparent structures and opaque companies, within a broader context of anti-money-laundering initiatives and increased transparency regarding beneficial ownership.

3. Transfer Duties and the Impact of Law no. 1.548

The tax reform introduced by Law no. 1.548 reinforces the framework already established by Law no. 1.381 of 29 June 2011 relating to registration duties payable on transfers of real property and real property rights, which remains the principal legal reference in this area.

This reform has a material impact on real estate transactions, increasing:

from 4.5% to 4.75% the registration duties applicable to transfers carried out in favour of a “transparent entity”, namely “a natural person or a civil company incorporated in Monaco, other than joint-stock or limited partnership companies, whose shareholders are exclusively natural persons acting on their own behalf and whose identities are known to the Tax Department, and whose assets include real property or real property rights located in the Principality”;
from 7.5% to 10% the registration duties applicable to transfers carried out in favour of a “non-transparent entity” (offshore or foreign companies), meaning any legal entity whose ultimate beneficial owners are not natural persons acting on their own behalf, or any legal person whose official documents do not allow the identification of its beneficial owners at the time of the transaction.

Pursuant to Law no. 1.381, the 7.5% rate continues to apply where the transfer is carried out through a Monegasque, offshore or foreign company represented by an accredited Monegasque tax agent. In the absence of such a declaration, the applicable rate is increased to 10%, in accordance with the new provisions introduced by Law no. 1.548.

Transfers carried out in favour of these entities are now taxed at twice the rate applied to transparent structures, thereby reducing the attractiveness of complex and opaque corporate arrangements.

These duties are in addition to notarial fees, which amount to 1.5% of the purchase price, and the estate agency commission, which—according to the scale set by the Monaco Real Estate Chamber—stands at 3.6% including VAT, payable by the purchaser.

4. Tax and Legal Implications

The acquisition of real estate abroad must often be declared to the tax authorities of the country in which the company is registered, or in which the beneficial owners are tax residents, and may be subject to wealth tax or equivalent taxes where the taxable net worth exceeds a certain threshold.

Furthermore, although Monaco does not levy income tax, foreign owners must nevertheless declare rental income in their country of tax residence.

Monaco offers an open framework for foreign investors, allowing real estate to be acquired either in one’s personal name or through local or foreign companies. While this form of ownership offers genuine advantages, it is no longer neutral: transparency obligations have increased, and Monaco’s tax system now clearly penalises opaque structures.

Purchasing via a foreign company can still be relevant, but only when the structure is coherent, transparent, duly declared and properly advised. To secure the transaction and optimise the acquisition structure in line with the investor’s country of residence and the specific situation of the foreign entity, it is therefore essential to rely on a Monegasque notary, an international tax adviser, and a real estate agent established in the Principality.

Barnes Valeri Agency works alongside Monaco’s leading experts in real estate and tax law and offers its clients access to its extensive professional network. Our agency will also be your trusted partner in creating, developing and enhancing your property portfolio.

Do not hesitate to get in touch with us.