The 30th of September was the last day to hand to Monaco tax authority the annual mandataire agréé declaration for foreign entities which own real estate in Monaco.
Created fourteen years ago by the law n°1.381 of the 29th of June 2011, the scopes of this regulation at the time were mainly two :
- Creating a tool to control any change of beneficial owner and consequently get the registry tax paid for every real estate transaction and not only in case of direct sale of the property itself or shares of Monaco Société Civile owning real estate in Monaco,
- Bringing more transparency to the Monaco land registry, which is public as too many people still ignore by promoting direct personal ownership or ownership trough Monaco société civile with only individuals as shareholder.
The first scope has been achieved very efficiently and some entities which may have forgotten to appoint a mandataire agréé or were late with the handing of the declaration have faced penalties, which in some cases were quite expensive due the commercial value of Monaco blooming real estate market.
Regarding the second scope, we can consider that it has been partially achieved. We have all seen the liquidation of some foreign entities and the transfer of the ownership to the beneficial owner himself. We have also noticed that there is no more interest for investors to buy existing foreign entities with Monaco real estate.
Nevertheless, in the past few months, we have also noticed that the needs of family wealth planning are taking over. It’s true that there is an extra registry cost to consider but the preservation of the family assets, most of the time in an international environment with existing structure, implies to use more complex legal tools.
The activity of the mandataire agréé becomes as well more complex as he would then be the local responsible for the due diligence of the structure put in place up to the beneficial owner and its annual control.