Buying a company in Monaco

18 December 2019


In most jurisdictions, purchasing a company can be tricky, costly and lengthy; Monaco is no exception.

Besides the due diligence the acquirer must go through (preferably with an advisor), there are three crucial elements to look at in Monaco :

Buying a business in Monaco means applying for a business permit (just like setting up a business, act 1.144). Monaco Wealth Management provided some information with this regards in a recent article.

However, this rule does not apply to SAMs, the shareholders (exception made for the founders) being anonymous (Société Anonyme Monégasque). This is the only form of company allowing an acquisition of the shares without an application process (unless the acquirer also become a managing director, then a business permit is required).

The purpose (or objet social in French) defines the activity that a company can perform.

Since Monaco is a highly regulated place, the Government is very cautious with the authorisations to be delivered. They tend to allow companies with a narrow company’s purpose. In some rare cases, there are some companies (usually companies established in the previous century) have a broad range of services or activities.

The acquirer needs to assess the compatibility between their project and the company’s purpose, which might require an amendment, when acceptable (SAMs cannot change much their purpose).

The company’s purpose makes the company part of a certain sector. In order to guarantee the safety and the stability of the economy, the Government makes countless efforts to avoid “overcrowding” some sectors. In fact, there are several areas in which it is not possible to obtain a business permit anymore, such as real estate agencies, legal advisory services, transportation, to name a few.

Since purchasing a company implies a business permit process, when it comes to these oversupplied areas, the purchase may well be rejected by the Government. Rules always have an exception ; the 10-year principle. In these same oversupplied areas, the purchase can be accepted and the permit granted if the company to be bought is more than 10 years old.

More than an administrative process, buying a company in Monaco is a real challenge.