Trusts and Monaco connections

Monaco and trusts: an evolving relationship

The Principality of Monaco, with its favourable tax environment and political stability, attracts many wealthy international families. Although Monaco lacks a legislative framework for trusts, the use of foreign trusts by Monegasque residents is an established and increasingly sophisticated practice.

The geographic proximity between Monaco and Geneva, combined with close economic and financial ties, makes the combination of a FINMA-licensed Swiss trustee with Monegasque beneficiaries or assets particularly compelling.

Profiles of families we serve

Families benefiting from our Monaco-related solutions typically fall into one of the following profiles:

• Monaco residents: families established in Monaco wishing to structure their global wealth through a trust administered in Switzerland. The absence of income tax in Monaco simplifies the taxation of distributions.
• Families with Monegasque assets: property owners in Monaco, holders of accounts with Principality banks or shareholders of Monegasque entities (SAM, Monegasque SCIs).
• Franco-Monegasque families: families with members residing in both France and Monaco, requiring structuring that accounts for the Franco-Monegasque tax convention and the complexities of French tax law.
• Expatriates in transition: families considering relocating to Monaco or leaving the Principality, requiring their trust structure to be adapted.

Issues specific to Monaco

Structuring trusts involving Monaco presents particularities that must be thoroughly understood:

• Trust recognition: in the absence of ratification of the Hague Convention, the recognition of a trust in Monaco relies on Monegasque private international law. The trust deed must be drafted with this specificity in mind to ensure its effectiveness.
• Monegasque real estate: property in Monaco is often held through Monegasque SCIs. Placing an SCI within a trust requires careful analysis of the legal and tax implications.
• Franco-Monegasque tax convention: French nationals residing in Monaco remain subject to French tax (1963 convention). Trust distributions to a French beneficiary residing in Monaco are therefore taxable in France.
• Regulatory compliance: Monaco has considerably strengthened its anti-money laundering framework and adopted the automatic exchange of information (CRS). The trustee must comply with these requirements.

The Geneva-Monaco axis

The relationship between Geneva and Monaco is naturally complementary in the trust field. Geneva brings FINMA regulatory rigour, banking infrastructure and trust administration expertise. Monaco offers an attractive tax environment for beneficiaries and an exceptional quality of life.

Swiss Trustee maintains close relationships with Monegasque banks, law firms in the Principality and local wealth advisers. This proximity allows us to coordinate trust administration effectively between the two jurisdictions, ensuring full compliance in each.

Our support

We support Monaco-connected families at every stage: initial analysis of the financial and family situation, selection of the trust jurisdiction, drafting of the trust deed in coordination with Monegasque lawyers, opening of bank accounts in the Principality and in Switzerland, and ongoing administration with tailored reporting. Our goal is to deliver an integrated service that capitalises on the respective strengths of Geneva and Monaco.