Monaco is strategically situated in the center of Europe, easily reachable, and enjoys a favorable year-round climate. The French and Monegasque territories form one customs union, including their territorial waters and French customs legislation is directly relevant in the Principality of Monaco.
Monaco is clean, for residents, visitors, and companies. It has an education system centered on personal growth and achievement, and medical services at the forefront of modern technology. It is the region’s cultural hub, with world-class concerts, ballets, nightlife, galleries, food, fashion, and sport.
|Benefits of Doing Business in Monaco||The Drawbacks of Doing Business in Monaco|
|Large Business Market||Difficult to Trade Across Borders|
|Productive and Skilled Workforce||Tax Payments|
|Infrastructure is Good||Insolvency|
|Business Prospects are Good||Cultural Barriers|
Advantages of Doing Business in Monaco
1. Planned Business Strategies is Applicable
In Monaco, there are over 5,000 companies operating in a broad variety of sectors like foreign trade, banking and finance, other services, tourism, retail, real estate and building, shipping, and sailing among many others. The companies profit from a balanced level of taxation. If 75 percent or more of their turnover is made in the Principality, there is no tax on profit for corporations.
With over 30,000 residents and a workforce of 47,000 (43,000 in the private sector) – with less than 4 percent unemployment – Monaco is the best place to pursue your work career.
Foreigners may take up a personal salaried role in Monaco on the condition that they have a work permit for the post they have obtained. After review of the business plan and evaluation of the persons working on the project and the particular business areas in which the company may work, approval is granted for new companies.
2. Business Structure is Good
Taking ownership, jobs, taxation, and other business issues into consideration, we will help you choose the right structure among the existing forms. We will advise about the tax regime in place. Depending on the corporate tax of 33.33 percent of the operation, it may be payable on usually measured income.
A business that does not surpass 25 percent of its gross turnover outside the Principality is excluded from corporate tax. Great limitations exist for the remuneration of deductible executives.
3. Dynamic Economy
The traditional tourism sector, which has greatly contributed to the Principality’s worldwide fame due to the moderate climate of Monaco, its history, casinos, and world-famous events such as the Monaco Grand Prix, the Monte-Carlo Rolex Masters or the Monaco Yacht Show, remains relevant.
4. Favorable Business Environment
While not a member of the EU, the Principality of Monaco belongs to the euro area and has formed permanent ties with the EU and accredited an ambassador to Brussels in 1999.
Furthermore, its customs regulations comply with French regulations since both countries have been part of a customs union since 1968 which allows capital to move between Monaco and France without restrictions and leads to the Principality being part of the EU customs zone.
5. Good Prospects for Business Opportunities
The Principality of Monaco made a recent move towards promoting and supporting new technology through a project that involved the State of Monaco and Monaco Telecom, the service provider of the Principality, which resulted in MONACOTECH, a start-up incubator run by Monaco Telecom on behalf of the State of Monaco, being established and opened in November 2017.
This incubator currently hosts 14 startups and aims to facilitate the creation and development of creative companies in Monaco, by selecting and accompanying project promoters, especially in terms of business management strategy.
Disadvantages of Doing Business in Monaco
1. Operating the Business is not Easy
According to the World Bank’s ease of doing business survey, France ranks 25th in the world for starting a business. The establishment involves five procedures and three and a half days, including registering with the Center de Formalités des Entreprises (CFE) and having company books signed and initiated by the commercial court clerk.
2. Strict Labour Laws
With a new uniform dismissal letter template drafted and released on the government website, France’s dismissal process has been eased. In the example, the justification for the dismissal can be summarised easily. Until the employee may be fired, there are still steps to be taken but this is a change.
Last but not least, the latest labor legislation has also restricted termination benefits based on a number of years of seniority, making laws more straightforward and reducing risks associated with business instability.
The redundancy process has also improved, with redundancy plans no longer having to weigh the financial health of other units of the same company outside of France; making it easier for French plants to shut down. Important ‘voluntary departure’ arrangements would also be promoted during restructuring plans in order to prevent mass layoffs.
Various other improvements are under consideration so it is important to have local expertise and resources in this region.
3. Electricity Constraints
Connecting to a source of electricity can be an arduous process in France, it takes about 70 days to complete, and five procedures. The application on its own requires 20 days to receive a certificate of approval, another 20.
4. Registration of Property is not Easy
Because of the historic existence of most French towns and neighborhoods, registering a property can be long-winded and difficult, but it can get even more of an internet link! A private person can get a connexion in less than a week but it takes more than two months for companies to get ADSL or Fiber. For VPN, lengthier yet. Keeping in mind our hyper-connected world, this is a challenge indeed.
5. Getting Loans is Difficult
Access to credit is one of the most critical business expansion criteria but is a notoriously difficult thing to accomplish. France has a strong and contemporary financial system but ranks 90th in the world for ease of accessing credit, stressing the value of providing local assistance when linking with banks.
More specifically, opening a bank account is a challenge for businesses due to the very complex procedures concerning French banks’ KYC systems, including the AML and anti-terrorism financing regulations.