SCIs in Monaco: Why are they interesting?
The project of an SCI in Monaco represents undeniable advantages in the management of your assets, especially in terms of inheritance tax. Discover our file to create a Real Estate Civil Company in Monaco.
What is an SCI in Monaco?
Basic principles of the Monegasque SCI
An SCI is a Real Estate Civil Company whose purpose consists in carrying out civil operations such as the management of real estate assets. It has the ability to buy real estate and put it under management. However, these properties must not be rented in furnished. Moreover, it may not carry on activities specific to merchants of goods. If it wanted to trade in real estate, it would have to evolve towards the legal form of the Limited Liability Company: SARL.
To exist legally, this type of company must meet the following requirements:
- It consists of at least two partners, with the status of natural persons or legal persons enjoying legal personality.
- The partners have unlimited and non-joint and several liability.
- A manager is appointed from the group of partners.
- No minimum share capital is predefined.
- The nationality of the partners is not necessarily Monegasque nor the place of residence
In the event of a debt, the liability of the partners is subsidiary. That is to say, a partner will not be able to settle the share of a debt of another partner. Each of them is obliged to settle the debts of the Company according to the number of shares he owns within the share capital.
The Monegasque legislative framework
For the operation of a Real Estate Civil Company, the legislative framework is as follows:
- Articles 1670 to 1711 of the Civil Code
- Law No. 797 of 18 February 1966 on Civil Societies
- Law no. 1,385 dated December 15, 2011
- Ministerial Order 2012-182 of 5 April 2012, pursuant to Law No. 1,385
What are the advantages of an SCI in Monaco?
It is advantageous for partners to set up as a Real Estate Civil Company in order to invest in offices, business premises or housing on the territory of the Principality. Indeed, the price per square meter in Monaco continues to grow: + 70% over 10 years. It is a very popular place for real estate investors. In question, the flamboyant setting of the place, but also the dynamism of the sector. Even if goods are scarce, the market remains constantly evolving to adapt to growing demands.
The second advantage is Monaco's tax policy. In direct filiation, the SCI offers the advantage of a rate applicable to 0% in case of legacy. The other rates applicable to inheritance or transfer vary between 8 and 16 per cent depending on the relationship between the deceased and his heir. Overall, taxation is more interesting in the Principality. To learn more, you can read our article on tax in Monaco.
As we will discuss below, tenants and the general public only have access to information relating to the location of the Société Civile Immobilière. The anonymity of the partners is preserved on Monegasque soil.
Agreements between the two States (France and Monaco)
These tax advantages in relation to the settlement of successions come from an agreement signed between the France and Monaco on 1 April 1950.
Judgment of the Court of Cassation of 2 October 2015
In a judgment dated 2 October 2015, the Court of Cassation decreed that the shares of Monegasque companies, owners of buildings in France, whose owners are Monegasque residents who died in France and whose heirs are residents French cannot be taxed according to the duties applicable within France.
This judgment of the Court of Cassation thus benefits all residents of different nationalities according to the principle of non-discrimination. However, there is a reservation. The deceased must have been a resident of the Principality for at least five years.
Order of the French Council of State of 11 June 2003
A decree of the French Council of State dated 11 June 2003 allows persons residing in Monaco and whose nationality is neither French nor Monegasque not to be subject to flat-rate taxation.
Advantages in all cases
These principles nevertheless remain subject to each tax treaty concluded between the France and the State of the Monegasque resident's nationality. In the event that the said tax treaty is not advantageous for the resident, it remains profitable for the latter to own a property in France through a Monegasque Real Estate Company.
Why create an SCI rather than owning a property?
Creating an SCI is interesting when it comes to a real estate purchase project between several people. This legal form makes it possible to overcome the difficulties that could be linked to a joint real estate purchase.
The manager is able to make decisions even if disagreements exist between the partners. It will therefore be able to continue to operate despite these inconveniences. Nevertheless, it is essential to properly define the decision-making powers of the managing partner. Poor management would imply the responsibility of all partners.
This is still a very good option when you want to ensure an estate with several beneficiaries. The bequeathed property that is linked to this type of Company may not undergo any joint inheritance. The legatee thus avoids the pitfalls that could result from a legacy. In our case, the shares held by the partner are the object of the bequest and not the real estate.
What are the formalities for investing in an SCI?
The drafting of the statutes of the Société Civile Immobilière
Before creating a Real Estate Civil Company, it is necessary to draft the statutes that embody the bases of its operation. They may be drawn up either by notarial deed or by private deed. Future partners enjoy a certain freedom in the drafting of these statutes. Some essential data must be included:
- Majority rules for voting in assemblies
- The limits of the manager's mandate
- The rules to be applied when selling or exchanging shares
- Approvals in case of entry or exit within the Company
All partners are obliged to sign these statutes which must be registered within one month in private signature and under fortnight under deed before a notary of Monaco. After registration, it will be necessary to pay to the Trade and Industry Register fees in connection with their file:
- A total sum of 65 €
- 5 € per certificate of registration
When the SCI is thus created, it must be registered in the Special Directory of Civil Societies within two months.
During its financial year, all accounting operations must be recorded in a file showing the statement of revenue and expenditure. This must be kept at the address of the registered office, together with any other supporting document. Five-year bank account statements will also need to be archived there. The Monegasque authorities must be able to consult freely the various documents in this accounting file.
Petrini Exclusive accompanies you in your project in Monaco
Our agency Petrini Exclusive Real Estate Monaco works daily with Monegasque consulting firms and can help you choose the right formula. Each situation is unique it is for this raion that we invite you to contact us so that we can give you the best advice for the constitution of your new SCI. We accompany you in all your stages of purchase of goods in the Principality of Monaco. Our team is at your disposal. We have developed an extensive network of local and international relationships thanks to , which benefit our customers. Our customers deserve personalized service and exclusive attention.