Overview of law n° 214 dated 27th of February 1936
Setting-up a trust in Monaco comprising European funds
According to law n°214 dated 27th of February 1936, the persons whom, in virtue of their personal statute, bear the faculty to settle the destination and fate of their estate during their living hood or subsequently to their deaths, following a trust regime, may have recourse to such within the territory of the Principality.
Legal
The constitution of a trust is operated through notarial deed, to the visa of a conformity attestation to the act with the laws governing the country in virtue of which the trust is constituted.
Such attestation is provided by a jurisconsult qualified registered on a list versed by the first president of the Monaco Court of Appeals.
Are of right eligible on such list:
- For the United-States, any attorney at law.
Tax
The only rights to which give birth creation, transfer and functioning of a Trust are registration fees:
Creation or transfer of a trust are submitted to a proportional right of registration that is variable depending the number of successive beneficiaries of the trust and fixed as follow:
- One beneficiary …………… 1.30 %;
- Two beneficiaries………….. 1.50 %;
- More than two beneficiaries …… 1.70 %;
This tax is replaced with an annual taxation of 0.20 % if parties are providing such request into the act of constitution of trust.
In a nutshell
Foreign nationals residing in Monaco may constitute a trust to administer their property and transfer it during their lifetime or at death, provided their country of nationality allows the foundation of such a trust. A trust formed abroad may also be transferred to Monaco.
The formation or transfer of a trust is subject to registration duties at varying rates depending on the number of beneficiaries: 1.3 % for one beneficiary, 1.5 % for two beneficiaries and 1.7 % for more than two beneficiaries. These rates may be replaced by an annual tax of 0.2 % if the parties so request at the formation.
The taxable base for the registration duty and the annual tax is the aggregate value invested in the trust, with the exception of Monegasque securities which are subject to the registration duties at 0.05 % (one beneficiary), 0.25 % (two beneficiaries) or 0.45 % (more than two beneficiaries).
The registration duty or the annual tax entirely satisfy the tax liability and inheritance and gift taxes are no longer applicable.
