Societe Anonymes Monégasques (SAM)

In contrast with many other jurisdictions, the objects clause of a SAM is drawn tightly and it is not possible to insert all-embracing clauses. The minimum issued share capital is EURO 150,000 which in practice must be paid up at the date of formation. Shares may also be issued in exchange for contributions in kind. There must be at least two shareholders and shares must be issued in registered form. There must be at least two directors, one of whom should be a resident of Monaco with full powers to manage the company. There are no restrictions regarding the nationality of shareholders or directors. It is necessary to file annual audited accounts.

Each SAM must have its own registered office and be either the owner or the tenant of the premises from which it operates. It cannot share the same premises with other companies and only certain premises are authorised by the Government for commercial or industrial use. Before granting authorisation, the Government will wish to be satisfied as to the adequacy and suitability of the premises selected. Each SAM must also be adequately staffed in order to carry out its business operations; there are no written rules on this, each case being treated on its own merits, but the Government prefers to see a minimum of four staff at least by the end of the first year of operation. Clearly “paper SAMs” cannot be formed and the Government looks for substance of operation.

Branch of a Foreign Corporation (BFC)

Before establishing a business operation in Monaco, a BFC must obtain permission from the Monegasque authorities. A standard application form is filed with the Minister of State by the person designated by the foreign corporation to act as the local branch manager (“agent responsable”). The application form is accompanied by the foreign company’s statutes and certificate of incorporation, relevant board minutes, the last three years’ audited financial statements, a copy of the lease of premises at which it is intended to conduct the branch operation and a business plan.

The “agent responsable” must be a resident of Monaco and have full powers to conduct the local branch operation. There are no minimum capital requirements for establishing a BFC however the local authorities would expect the BFC to be capitalised sufficiently to cover local set-up costs.

It is difficult to obtain authorisation for the branch of a foreign corporation which has been in existence for less than three years. However, there are no fixed rules and each case is judged on its own merits. A BFC is normally initially granted a two, three of five year licence, renewable on the same basis.

Smaller enterprises tend to operate under the form of general or limited partnerships or sole proprietorships. There are no minimum share capital requirements for these smaller enterprises and the reporting requirements are less onerous.