Monaco update - November 2016 - Multi Family Offices and Tax information exchange


In the last session of November 2016 the Monaco National Council (the Conseil National) adopted key laws ensuring that Monaco is well placed to provide the tools needed for families to manage their wealth, from a jurisdiction that is compliant with the modern international requirements of tax transparency.

Multi Family Office in Monaco (Monaco MFO).

The Single Family Office is already common in Monaco, for a family to manage their entire patrimony;

Now the Monaco MFO entity will be able to provide a range of services to more than one family. It will be authorised to provide independent assistance to its client families across a range of areas, acting as a coordinator of professional services. It will not be able to undertake the administration of family entities such as trusts and companies, although it will be in a position to coordinate the work of such professions.

Subject to authorisation it will also be able to provide investment advisory services, although it will not be able to provide discretionary portfolio management, or fund management services.

After much negotiation the legislation has been agreed with the Government to ensure that the MFO structure in Monaco is the "best of breed", in that it provides protection for the MFO's clients by ensuring that it is free from conflict of interest with respect to the promotion of investment products, and is subject to strict rules of confidentiality.

The MFO will need to be in the form of an SAM, and cannot be majority owned by a Financial Institution.

Exchange of information in tax matters

In accordance with Monaco's policy to align its legislation to the international standards with respect to transparency the National Council approved 3 new laws:

1. The ratification of the Multilateral Competent Authority Agreement regarding the automatic exchange of information relating to financial accounts, insofar as this ratification results in a change of the existing legislative provisions.

This multilateral agreement sets out the practical procedures for exchanging automatic of information relating to financial accounts, and is, as such, an instrument of the Convention on mutual administrative assistance in tax matters, signed by the Principality of Monaco on October 13, 2014.

2. The ratification of the Convention on Mutual Administrative Assistance in Tax Matters.

This agreement prescribes the different forms of cooperation between States, whether it is for example the exchange on request or automatic exchange. It also covers the use and conservation of the information exchanged to strict rules, in particular in terms of confidentiality.

3. The ratification of the Protocol of modification of the Agreement between the Principality of Monaco and the European Community providing for measures equivalent to those that of the directive 2003/48/EC of the Council.

This agreement signed with the European Union provides for, from 2018, the automatic annual exchange between Monaco and each of the Member States, of the information collected and reported by Monaco financial institutions on the financial accounts of individuals and entities resident in each of those Member States. Information will be exchanged in the nine months following the end of the calendar year to which they relate, or before September 30 of each year.  Moreover, the Protocol will also allow Monaco and the Member States, to exchange information on request, in a similar way to that which is applied on the basis of the bilateral agreements in force on the O.E.C.D. model.

For advice on these subjects please make contact with your Rosemont advisor in Monaco.