1 Legislative framework

1.1 Which legislative provisions govern private client matters in your jurisdiction?

Private client matters are governed in Monaco by many legislative provisions, such as:

  • the Civil Code;
  • the Civil Procedure Code;
  • the Code of Private International Law;
  • Law 1.155 of 18 December 1992 on Nationality, supplemented by Law 1.276 of 22 December 2003 amending Law 1.155 of 18 December 1992 on Nationality;
  • Law 1.512 of 3 December 2021 on the Acquisition of Nationality by Marriage;
  • Law 1.481 of 17 December 2019 on Civil Solidarity Contracts;
  • Law 1474 of 2 July 2019 on Maintenance of Justice, Tutelage, Legal Guardianship, the Enduring Power of Attorney and the Exercise of the Activity of Judicial Representative for the Protection of Persons;
  • Law 1.506 of 2 July 2021 Recognising the Children of the Contribution to the Development of the Principality of Monaco;
  • Law 56 of 29 January 1922 on Foundations;
  • Law 214 of 27 February 1936 reviewing Law 207 of 12 July 1935 on Trusts;
  • Law 1.492 of 8 July 2020 on the Implementation of a Right to an Account;
  • Law 1.529 of 29 July 2022, containing various economic and legal provisions;
  • Law 1.362/2009 of 3 August 2009 on the Fight against Money Laundering, Terrorist Financing and Corruption, supplemented by:
    • Law 1.503 of 23 December 2020 Strengthening Measures to Combat Money Laundering, Terrorist Financing and Corruption;
    • Law 1.521 of 11 February 2022 Introducing Various Criminal Measures to Combat Money Laundering, Fraud and Counterfeiting of Non-cash Means of Payment; and
    • Law 1.537 of 9 December 2022 on Preliminary Investigations and Alternative Measures to Prosecution;
  • Law 1.549 of 6 July 2023 on the Fight against Money Laundering, Terrorist Financing and Corruption (Part I: Central Preventive System);
  • Law 1.549 of 6 July 2023 on the Fight against Money Laundering, Terrorist Financing and Corruption (Part II: Transparency of Legal Entities);
  • Bill of Law 1.080 of 26 July 2023 on the Fight against Money Laundering, Terrorist Financing and Corruption (Part III: Repressive Aspects), which was voted on on 28 November 2023; and
  • Bill of Law 1.084 of 8 November 2023 on the Fight against Money Laundering, Terrorist Financing and Corruption (Part IV: Law Provisions), which was received by the National Council on 17 November 2023 and should be voted on early in 2024.

There are also ordinances, such as:

  • Ordinance 3.153 of 19 March 1964 on the Conditions of Entry and Stay of Foreigners in the Principality; and
  • Ordinance 8.566 of 28 March 1986 on the Certificate of Residence.

Regarding tax matters, the relevant provisions are as follows:

  • the Ordinance of 29 April 1828 on Registration, Stamp and Court Registry Fees and Mortgages, covering in particular free transfer rights (inheritance tax and gift tax matters), supplemented by Law 1.247 of 21 December 2001, which adapted amounts expressed in francs in certain legislative texts to the euro;
  • Law 580 of 29 July 1953 on Registration and Mortgage Duties, covering in particular free transfer rights (inheritance tax and gift tax matters);
  • Law 1.381 of 29 June 2011 on Registration Duties Payable on Transfers of Real Estate and Real Estate Rights;
  • Law 1.548 of 6 July 2023, containing various tax provisions;
  • the Monegasque Revenue Tax Code for value added tax;
  • the Double Tax Treaty covering income tax signed between France and Monaco and dated 18 May 1963; and
  • the Double Tax Treaty covering inheritance tax signed between France and Monaco and dated 1 April 1950.

Regarding tax matters related to art, the relevant provisions are as follows:

  • Sovereign Order 5.501 of 9 January 1975, which made the Bern Convention of 9 September 1886 for the protection of literary and artistic works enforceable in Monaco;
  • Bill 491 of 24 November 1948 on the protection of literary and artistic works;
  • Bill 1.526 of 1 July 2022 on the artist' resale right; and
  • Sovereign Order 10.300 of 22 December 2023, setting the terms and conditions for the application of Act 1.526 of 1 July 2022 on Resale Rights.

1.2 Do any special regimes apply to specific individuals (eg, foreign nationals; temporary residents)?

Special regimes apply to specific individuals.

Monegasque citizens benefit from a special regime. Monegasque nationality can be acquired in one of the following ways:

  • filiation by the father or the mother under certain conditions;
  • adoption;
  • marriage; or
  • naturalisation.

Residence or birth in Monaco does not allow one to acquire Monegasque nationality, except in the case of a child born of unknown parents in Monaco. Only children born to a Monegasque father or to a Monegasque mother under specific conditions acquire nationality by birth. The same conditions apply to children adopted by legitimate adoption.

One can also obtain Monegasque nationality by declaration after being married to and living with a Monegasque citizen for 20 years from the date of the marriage. The necessary time period used to be 10 years but was recently increased to 20 years for marriages celebrated after 1 July 2022 (Law 1.512 of 3 December 2021 on the Acquisition of Nationality by Marriage). Couples married before this date remain subject to the 10-year time limit.

Monegasque nationality by naturalisation is granted at the full discretion of the prince. Normally, to be considered for naturalisation, an applicant must have been a resident in Monaco for at least 10 years (accumulated after the age of 18). However, this condition can be removed at the discretion of the prince. In order to be naturalised in Monaco, one must surrender one's nationality of origin. Although naturalisation is at the full discretion of the prince, the criteria which can be taken into account include:

  • having family attachments within the Monegasque community;
  • being integrated well socially, culturally and economically within the principality; and
  • being considered worthy by the prince.

Monegasque nationals have various privileges compared to foreigners, particularly in terms of access to housing and employment.

Any foreigner who wishes to work in Monaco must be granted a work permit. For employment available in Monaco, priority is given to jobseekers who are:

  • Monegasque nationals;
  • children or spouses of Monegasque nationals;
  • Monegasque residents; or
  • residents of nearby French towns.

However, the granting of a work permit and access to employment is decided based on the skills of the person needed for a particular role. With regard to housing, properties are divided into different categories, to which access is regulated:

  • Properties in the 'free' category can be rented freely to foreigners;
  • Properties in the 'domanial' category belong to the Monegasque principality and are reserved and attributed to Monegasque nationals; and
  • Properties in the 'regulated' category include two sub-categories of properties reserved to:
    • 'protected' residents; and
    • residents who have lived and/or worked in Monaco for a certain period.

Any person of foreign nationality born in Monaco (or adopted in Monaco during his or her minority) who has resided there continuously since birth or adoption is recognised as a 'child of the country'. The public authorities are seeking to introduce this term into the internal legal order to highlight these persons' special ties with Monaco through official recognition, with the aim of preserving the stable social fabric of the Monegasque territory. For now, however, neither a specific regime nor collective rights have been granted to the 'children of the country'.

Regarding residency, any foreigner over the age of 16 who wishes to stay continuously in Monaco for more than three months or to settle there must apply to the Monegasque authorities for a residence permit. Before applying for this permit, non-European Economic Area nationals must apply for a long-stay visa for Monaco through the French consulate closest to their most recent place of residence.

A Monegasque residence permit authorises the holder to move freely within the Schengen area. A residence card is not issued for minors under the age of 16 but they can be issued with a travel document for foreign minors to facilitate their movement within the Schengen area.

There are four categories of residence permits, which can be delivered as follows:

  • Temporary: This can be issued with no minimum requirement period for residency in Monaco and is valid for one year. It is the card issued for first-time residents in Monaco.
  • Ordinary: This is issued to residents who have accumulated three years of residency in Monaco and is valid for three years.
  • Privileged: This is issued to residents who have accumulated 10 years of residence in Monaco and is valid for 10 years. In certain cases, residents who have only lived in Monaco for one year can be issued with this type of permit.
  • Spouse of Monegasque national: This can be issued to any foreigner who is a spouse of a Monegasque national and who has lived in the principality for at least one year. It is valid for five years.

Other specific laws may apply to certain nationals, depending on the international treaties and conventions signed by Monaco – for instance, treaties regarding the tax and/or social security position of individuals signed with France and Italy.

Finally, Monaco does not levy personal income tax on its residents. However, French Monegasque residents are liable to pay French personal income tax as per the 1963 Double Tax Treaty covering income tax signed between France and Monaco (see question 2.1).

1.3 Which bilateral, multilateral and supranational instruments in effect in your jurisdiction are of relevance in the private client sphere?

Many international instruments are in effect in Monaco and of relevance in the private client sphere. They include the following:

  • the Hague Convention of 12 April 1930 on Certain Questions relating to the Conflict of Nationality Laws;
  • the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (Apostille Convention) of 5 October 1961;
  • the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters of 15 November 1965;
  • the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters of 18 March 1970;
  • the Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduction;
  • the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition;
  • the Hague Convention of 29 May 1993 on Protection of Children and Cooperation in Respect of Intercountry Adoption;
  • the Hague Convention of 19 October 1996 on Jurisdiction, Applicable Law, Recognition, Enforcement and Cooperation in Respect of Parental Responsibility and Measures for the Protection of Children;
  • the Hague Convention of 13 January 2000 on the International Protection of Adults;
  • the New York Convention of 20 June 1956 on the Recovery Abroad of Maintenance;
  • the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958;
  • the New York Convention of 20 November 1989 on the Rights of the Child;
  • the Geneva Convention of 28 July 1951 on the Status of Refugees;
  • the European Convention for the Protection of Human Rights and Fundamental Freedoms of 10 June 1958; and
  • the European Convention on Mutual Assistance in Criminal Matters of 20 April 1959.

Monaco is also active in various international tax initiatives that have an impact on the private client sphere, including the following:

  • Monaco is committed to the Organisation for Economic Co-operation and Development's Base Erosion and Profit Shifting (BEPS) project. In this context, on 7 June 2017 Monaco signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS.
  • Monaco has signed international agreements and conventions implementing the exchange of information – in particular:
    • the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, on 13 October 2014;
    • the Multilateral Competent Authority Agreement for the Automatic Exchange of Financial Account Information, on 15 December 2015; and
    • a specific agreement with the EU member states (Agreement between the European Community and the Principality of Monaco providing equivalent measures to those of EU Directive 2003/48/EC, as amended by the 2016 Protocol).
  • As per the Multilateral Competent Authority Agreement for the Automatic Exchange of Financial Account Information, Monaco has been subject to the Common Reporting Standard (CRS) since 2017. Within the framework of the CRS, Monegasque financial institutions must collect information on their clients annually and report information on non-residents' accounts.
  • Monaco has signed 35 tax information exchange agreements/tax assistance agreements/double tax treaties, of which 33 are in force.
  • Monaco has also signed one tax treaty (with France) as regards inheritance tax. It is the only treaty of this nature signed by Monaco.

Furthermore, the principality of Monaco has recently undertaken legislative reforms aimed at confirming its commitment to compliance with international standards and reinforcing the effectiveness of its measures to combat money laundering, the financing of terrorism and the proliferation of weapons of mass destruction, following those carried out in 2022 and previous years.

In particular, the purpose of the reforms is to take into account the recommendations of the Mutual Evaluation Report of the Fifth Cycle of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, known as the MONEYVAL Committee, adopted on 8 December 2022 and published on 23 January 2023.

This report assesses the measures implemented by the principality of Monaco on the basis of information provided by the Monegasque authorities and information obtained by the evaluation team.

It analyses:

  • the level of compliance with the 40 recommendations of the Financial Action Task Force; and
  • the level of effectiveness of Monaco's measures to combat money laundering and terrorist financing.

As a result, the report makes specific recommendations to consolidate the Monegasque arsenal in this area.

Four bills have been drafted to adapt Monegasque legislation to the recommendations of the MONEYVAL Committee's report:\

  • Bill 1077 (Part I);
  • Bill 1078 (Part II);
  • Bill 1080 (Part III); and
  • Bill 1084 (Part IV).

Bill 1077 was adopted on 29 June 2023. In particular, the relevant law, dated 6 July 2023:

  • adjusts certain obligations of reporting entities;
  • transforms the current Service d'Information et de Contrôle sur les Circuits Financiers, created in 1993, into the independent Monegasque Financial Security Authority, with extended powers;
  • creates an obligation for associations and foundations to declare their beneficial owners;
  • adapts the regime for monitoring beneficial owners during the lifetime of reporting entities; and
  • adapts the system of sanctions applicable to reporting entities.

Bill 1078 was adopted on 31 July 2023. The relevant law, dated 10 August 2023, amends the laws governing the trade and industry register, civil companies, foundations and associations, with the aim of increasing the transparency of legal entities in the principality. This law has two main components:

  • The first is to give the competent Monegasque authorities greater and more extensive access to satisfactory, accurate and up-to-date 'basic information' on beneficial owners and the control of legal entities.
  • The second provides for the establishment of a legal framework adapted to the new measures that may be taken to keep up to date the 'basic information' that legal entities must obtain, keep, make available to the competent authorities and transmit for entry in the registers held by the Economic Development Department and the Department of the Interior.

Bill 1080 was voted on on 28 November 2023 and was adopted on 7 December 2023. It is intended to supplement and amend both the Criminal Code and the Code of Criminal Procedure, as well as Law 1.222 of 28 December 1999 on extradition, with a twofold objective.

The first is to make criminal proceedings more efficient by:

  • implementing preventive checks requested by the public prosecutor outside any investigation;
  • strengthening the criminal provisions relating to seizures, reducing procedural deadlines and better guaranteeing the enforcement of court rulings;
  • extending the jurisdiction of the principality's courts;
  • enhancing the supervision and reinforcement of the binding nature of judicial supervision measures and requisitions issued by the prosecuting authorities; and
  • strengthening special investigative techniques through undercover operations and controlled deliveries.

With regard to developments in extradition procedure, the bill provides in particular for the stages of this procedure to be defined under ordinary law, creating a simplified extradition procedure and adapting national provisions to the principality's international commitments.

The second objective of the bill is to reinforce the dissuasive nature of the criminal justice system by introducing new requirements in order to:

  • specify the regime and effects of the arrest warrant; and
  • expand the provisions relating to the obstruction of justice and residence bans in the Monegasque territory.

The bill also:

  • clarifies the scope of offences relating to:
    • money laundering;
    • terrorist financing;
    • the proliferation of weapons of mass destruction; and
    • the circumvention of asset freezing measures; and
  • significantly increases the related penalties.

The bill also makes substantial changes to:

  • the definition of 'organised crime'; and
  • the bulletin that must be filed in the criminal record.

Finally, Bill 1.084 of 8 November 2023 was received by the National Council on 17 November 2023 and should be voted on in early 2024. This bill mainly deals with matters that could not be covered by the previous sections, such as:

  • the professional secrecy of agents of the Directorate of Tax Services; and
  • the law relating to trusts.

In addition, it strengthens Monaco's criminal law system through the introduction of new provisions.

2 Taxation

2.1 On what basis are individuals subject to tax in your jurisdiction (eg, residence/domicile/nationality)? How is this determined?

One of the major attractions of Monaco for private individuals is its favourable taxation regime. Monaco does not levy personal income tax on its residents. There is also no tax on wealth in Monaco (eg, as opposed to France).

However, French nationals are subject to French income tax, even if they reside in Monaco (save for rare exceptions).

The criteria for tax residence in Monaco are set out in the legislation that stipulates the conditions to obtain a tax residence certificate (Ordinance 8.566 of 28 March 1986, amended by Ordinance 8.372 of 26 November 2020). An individual is deemed to be tax resident in Monaco if:

  • he or she has his or her main place of residence, or his or her home, in the territory of the principality; or
  • he or she has his or her main centre of activities in the principality, subject to bilateral tax treaty provisions.

As per the 1963 Double Tax Treaty covering income tax signed between France and Monaco, French nationals living in Monaco are subject to French personal income tax on their worldwide income, except for:

  • those who can prove more than five years of habitual residence in Monaco as of 13 October 1962; and
  • those who have been Monegasque residents continuously since birth.

French nationals who do not benefit from the exemption are deemed to be tax resident in France and are therefore subject to income tax in France on their worldwide income (subject to any double taxation agreement signed by France).

As regards inheritance and gift taxes, the criterion for taxation is the location of the assets: inheritance and gift taxes apply to property (ie, movable and immovable assets) located in the territory of the principality, regardless of the domicile, residence or nationality of the deceased/donor and the heirs/donees. This is subject to the tax treaty between Monaco and France, which aims to avoid double taxation regarding inheritance tax.

2.2 When does the personal tax year start and end in your jurisdiction?

Not applicable in the absence of personal income tax.

2.3 With regard to income: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?

(a) What taxes are levied and what are the applicable rates?

Monaco law does not levy any personal income tax on individuals acting within the scope of their private activities.

Nevertheless, and as specified in question 2.1, French nationals who reside in Monaco are liable to French personal income tax as per the 1963 Double Tax Treaty covering income tax signed between France and Monaco, save for rare exceptions

As per Ordinance 3.152 of 19 March 1964, an individual may be taxed on the profits of industrial and commercial activities (including capital gains) when subject to the Monegasque business profit tax. This covers sole trader enterprises.

(b) How is the taxable base determined?

Not applicable for personal income tax.

Monegasque business profit tax is applied to commercial and industrial activities that generate more than 25% of their turnover outside Monaco.

(c) What are the relevant tax return requirements?

Not applicable for personal income tax.

Monegasque business profit tax compliance obligations take the form of an annual tax return.

(d) What exemptions, deductions and other forms of relief are available?

Not applicable for personal income tax.

There are several exemptions/deductions/relief schemes within the Monegasque business profit tax legislation – in particular:

  • the research and development tax incentive scheme; and
  • the scheme for newly established legal entities.

2.4 With regard to capital gains: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?

(a) What taxes are levied and what are the applicable rates?

Monaco does not levy capital gains tax for individuals.

(b) How is the taxable base determined?

Not applicable.

(c) What are the relevant tax return requirements?

Not applicable.

(d) What exemptions, deductions and other forms of relief are available?

Not applicable.

2.5 With regard to inheritances: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?

(a) What taxes are levied and what are the applicable rates?

Inheritance tax applies only to assets that are situated in Monaco, regardless of the domicile, residence or nationality of the deceased and the heirs.

There is no inheritance tax between ascendants and descendants in direct line and between spouses. The rates are otherwise as follows:

  • 4% between partners under a 'living together' contract. In such case, the benefit of the 4% duty is negated if the living together contract is terminated less than 10 years after its conclusion for a reason other than the marriage of the partners or the death of one of them. In this situation, the partners will be subject retroactively to the 16% duty;
  • 8% between siblings;
  • 10% between uncles or aunts, nephews or nieces;
  • 13% between other collateral relatives; and
  • 16% between unrelated persons or for legal entities.

Notary fees are also payable.

Registration duties are also levied on the formalities to register transfers or civil or judicial acts (eg, notarial acts, judicial documents, extrajudicial documents, declarations of inheritance and some private agreements).

Registration fees are levied at either a fixed rate or a proportional rate, depending on the nature of the document. The fixed-rate fee, which was usually €10, has increased to €50 in accordance with Law 1.548 of 6 July 2023 containing various tax provisions.

(b) How is the taxable base determined?

Inheritance tax applies to the net value of the deceased's assets at the time of his or her death (qualifying liabilities are determined as per Law 42 of 3 January 1921 on the Deductibility of Liabilities for Inheritance Tax Purposes).

(c) What are the relevant tax return requirements?

An inheritance tax form must be submitted to the Monegasque tax authorities, together with the payment of the inheritance tax, if any.

This form must be submitted:

  • within six months of the date of death where the deceased died in Monaco;
  • within eight months of the date of death where the deceased died in Europe (but outside Monaco);
  • within one year of the date of death where the deceased died in America; or
  • within two years of the date of death where the deceased died in Africa or Asia.

(d) What exemptions, deductions and other forms of relief are available?

There is no inheritance tax between ascendants and descendants in direct line and between spouses.

As per Law 241 of 6 June 1938 Exempting Local Authorities, Public Hospitals and Charitable Institutions from Duties on Gifts and Bequests, amended by Law 809 of 15 December 1966 supplementing and amending Law 241 of 6 June 1938 with regard to Foundations, bequests of Monaco-based assets to the municipality, public hospitals or public charities and specific private foundations (those whose disinterested goal is the intellectual, moral or social improvement of the members of the Monegasque community and are approved as such) are exempt.

2.6 With regard to investment income: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?

(a) What taxes are levied and what are the applicable rates?

Not applicable for individuals.

(b) How is the taxable base determined?

Not applicable for individuals.

(c) What are the relevant tax return requirements?

Not applicable for individuals.

(d) What exemptions, deductions and other forms of relief are available?

Not applicable for individuals.

2.7 With regard to real estate: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?

(a) What taxes are levied and what are the applicable rates?

Monaco does not levy any wealth tax or local taxes on real estate.

Registration duties at a rate of 10% are levied upon the transfer for consideration of Monegasque real estate properties. This rate is decreased to 4.75% for transfers carried out to the benefit of:

  • individuals; and
  • Monegasque civil companies (general partnerships), other than public limited companies or limited liability partnerships:
  • whose share capital is exclusively held by individuals, provided that their identity is disclosed to the Monegasque tax services; and
  • whose assets include real property or rights relating to real estate situated in Monaco.

In addition, the sale of shares in Monegasque civil companies (general partnerships), other than public limited companies or limited liability partnerships that hold, directly or through one or more other civil companies, real estate property or rights relating to real estate situated in Monaco, is subject to a registration duty of 10%. This rate is reduced to 4.75% where the purchaser is an individual or a Monegasque civil company with the characteristics defined in the second bullet point above.

The deeds of contribution of real estate property or rights relating to real estate that is situated in Monaco to the benefit of certain legal entities are subject to a registration duty of 10%.

Notary fees are also payable on the above transfers.

Where they give rise to the creation of a new legal entity and/or to a change in the beneficial owner(s) within the meaning of Law 1.381/2011 (amended by Act 1.548 of 6 July 2023), acts that entail, in particular, a change in the nationality or legal form of legal entities holding rights on real estate situated in Monaco are subject to a registration duty of 10%, irrespective of the location of their registered office or the law applicable to them.

Law 1.381 of 29 June 2011 on Registration Duties Payable on Transfers of Real Estate and Real Estate Rights 2011 (amended by Act 1.548 of 6 July 2023 on various tax provisions) provides for an annual reporting obligation for foreign companies, trusts and other such entities holding real estate in Monaco, which must appoint a local tax agent whose duty is to file an annual declaration regarding the change or absence of change in beneficial ownership. Subject to certain exemptions, if there has been a change in beneficial ownership, a duty of 4.75% of the value of the property is due. If the change in beneficial ownership is the result of a lifetime gift or a transfer upon death in favour of the spouse, or the ascendants or the descendants in direct line of the donor or the deceased, the 4.75% duty does not apply.

Value added tax (VAT) applies to certain transactions relating to real estate under specific rules.

Law 1.548 of 6 July 2023 containing various tax provisions will have an impact on property transactions and operations affecting real estate located in the principality. This major reform applies to deeds registered from 1 October 2023. Pursuant to Article 70 of the Constitution, which lays down the principle of the legality of taxation, this reform relating to direct and indirect tax contributions has been enacted by law.

This tax reform will have an impact on property transfers by:

  • increasing from 4.5% to 4.75% the registration fees applicable to property and property rights transfer made in favour of a 'transparent' entity – that is, "a natural person or a civil company registered in Monaco, other than those in the form of a limited company or a limited partnership, whose partners are exclusively natural persons acting on their own behalf when their identity is known to the Directorate of Tax Services, and whose corporate assets include real estate or real rights on real estate located in the Principality"; and
  • increasing from 7.5% to 10% the registration fees applicable to property and property rights transfers made in favour of a so-called 'non-transparent' entity – that is, a legal entity whose beneficial owners are not natural persons acting on their own behalf or legal entities whose official documents make it possible to ascertain the identity of the beneficial owners on the day the transaction is carried out.

This measure significantly increases the advantages of transparent entities over non-transparent entities. Transfers made to the latter are now taxed twice as heavily as those made to the former, thereby reducing the incentive to use complex and opaque structures.

(b) How is the taxable base determined?

The tax base is the market value of the real estate or rights.

As regards the sale of shares in Monegasque civil companies that hold, directly or through one or more other civil companies, real property or rights relating to real estate situated in Monaco, the registration duty of 10% is calculated on the portion of the transfer price (or market value if higher) attributable to such property or rights.

(c) What are the relevant tax return requirements?

Transfer deeds are registered with the Monegasque tax services.

See question 2.7(a) as regards the reporting of a change or the absence of change in the beneficial ownership of Monegasque real estate.

(d) What exemptions, deductions and other forms of relief are available?

See question 2.7(a).

2.8 With regard to any other direct taxes levied in your jurisdiction: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?

(a) What are they and what are the applicable rates?

Tax on lifetime gifts is payable at the same rates as inheritance tax and also applies to assets that are situated in Monaco.

Stamp duty is levied on certain legal and administrative documents.

(b) How is the taxable base determined?

Tax on lifetime gifts applies to the value of the assets gifted (located in Monaco), as indicated in the relevant deed.

(c) What are the relevant tax return requirements?

The gift deed must be prepared by a Monegasque notary.

(d) What exemptions, deductions and other forms of relief are available?

There is no tax on lifetime gifts between ascendants and descendants in direct line and between spouses.

As per Law 241, gifts of Monaco-based assets to the municipality, public hospitals or public charities and specific private foundations (those whose disinterested goal is the intellectual, moral or social improvement of members of the Monegasque community and are approved as such) are tax exempt under Monaco law.

2.9 With regard to any indirect taxes levied in your jurisdiction: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?

(a) What are they and what are the applicable rates?

Monaco has a customs union with France. French customs law is therefore applicable in Monaco and VAT is levied in Monaco under the same rates and basis as in France.

An individual may have to register for VAT in Monaco if he or she is considered as a VAT taxable person carrying out a VAT taxable economic activity (supply of goods and services). The standard VAT rate is 20%.

(b) How is the taxable base determined?

French and more generally EU VAT rules apply in Monaco; thus, the taxable base is determined by deducting input VAT on output VAT.

(c) What are the relevant tax return requirements?

Every person liable for VAT must file a monthly declaration to the Monegasque tax services. When the amount of VAT payable annually is less than €4,000, taxpayers can file their declarations quarterly.

(d) What exemptions, deductions and other forms of relief are available?

French and more generally EU VAT rules apply in Monaco, apart from certain Monegasque specificities.

3 Succession

3.1 What laws govern succession in your jurisdiction? Can succession be governed by the laws of another jurisdiction?

The laws that govern succession in Monaco are:

  • the Civil Code;
  • the Code of Civil Procedure; and
  • the Code of Private International Law.

Pursuant to the Code of Private International Law, which was instituted by Law 1.448 of 28 June 2018 on Private International Law and came into force on 8 July 2017, successions opened after that date are in principle governed by the law of the state where the deceased was domiciled at the time of his or her death.

However, according to the code, in order to settle his or her succession, a person may elect the law of a state of which he or she is a national at the time the election is made. The choice of law must be expressly stated in writing in a declaration taking the form of a document used to dispose of property upon death. The existence and validity of consent in respect of the choice of law will be governed by the chosen law. The modification or revocation of the choice of law must satisfy the formal conditions for the modification or revocation of a document used to dispose of property upon death dictated by the chosen law.

3.2 How is any conflict of laws resolved?

Conflicts of law are resolved by the Code of Private International Law, which came into force on 8 July 2017. It applies to successions opened after the entry into force of the code (see question 3.1). Clarification on the application of the code was provided by Law 1.529 of 29 July 2022 containing various economic and legal provisions, which introduced a new Article 7-1 to the code confirming that it is applicable only to successions opened after the entry into force of Law 1.448 on Private International Law.

The law applicable to succession according to the code will govern the succession as a whole, from commencement until the final transfer of assets to the beneficiaries. However, it cannot:

  • deprive an heir of the reserved portion guaranteed to him or her by the forced heirship rules dictated by law of the state of which the deceased was a national at the time of his or her death; and
  • have the effect of enforcing forced heirship rules to the succession of a deceased if the law of the state of which he or she was a national at the time of his or her death did not have that regime.

Prior to 8 July 2017, the rules of private international law that applied in Monaco were based solely on case law and international succession matters were subject to a dualist system in which conflicts of law were resolved according to the following principles:

  • The law applicable to movable assets was the national law of the deceased; and
  • The law applicable to immovable assets was the law of the state in which those assets were situated.

3.3 Do rules of forced heirship apply in your jurisdiction?

Rules of forced heirship apply under Monaco law regarding descendants and, under certain circumstances, ascendants. However, the surviving spouse does not benefit from forced heirship rules under Monegasque law.

3.4 Do the rules of succession rules apply if the deceased is intestate?

If Monegasque law applies to the succession and the deceased has died intestate, the Civil Code provides for rules of devolution to the legal heirs.

These rules also apply in the case of a will which does not cover all of the estate. For example, in the case of a will which mentions only a particular legacy (eg, relating to one particular asset), the assets not covered will devolve to the legal heirs – that is, the heirs designated by the provisions of the Civil Code.

The determination of the legal heirs under Monegasque law is addressed in question 4.9.

3.5 Can the rules of succession be challenged? If so, how?

The rules of succession can always be challenged before the Monegasque courts (provided that the jurisdictional criteria are met) by someone with an interest in the proceedings.

The challenge may concern issues such as:

  • the validity of a will;
  • the law applicable to an estate;
  • the choice of law made in a will;
  • the treatment and effect of lifetime gifts;
  • the treatment and effect of transfers made into trusts;
  • the identity of the heirs;
  • the composition or value of the estate;
  • the amount of the shares allocated to each heir;
  • the calculation of the amount of the forced heirship; or
  • the effect of forced heirship rules;

In order to avoid any challenges and better plan ahead, specialist legal advice should be obtained when considering estate planning – in particular, for international estates where legal concepts from different countries may conflict.

All actions relating to the challenge of rules of succession are subject to a limitation period, which differs according to their type.

4 Wills and probate

4.1 What laws govern wills in your jurisdiction? Can a will be governed by the laws of another jurisdiction?

The laws that govern wills in Monaco are:

  • the Civil Code;
  • the Code of Civil Procedure; and
  • the Code of Private International Law.

In application of conflict rules (see question 4.2), a will can be governed by the laws of another jurisdiction.

4.2 How is any conflict of laws resolved?

The Code of Private International Law states that a testamentary disposition will be valid as to form if it is in line with the requirements of one of the following laws:

  • the law of the state of the place where the testator made his or her disposition;
  • the law of the state of which the testator was a national either when he or she made his or her disposition or at the time of his or her death;
  • the law of the state in whose territory the testator had his or her domicile, either when he or she made his or her disposition or at the time of his or her death;
  • the law of the state in whose territory the testator had his or her habitual residence, either when he or she made his or her disposition or at the time of his or her death; and
  • for immovable property, the law of the state in which it is situated.

The question of whether the testator has his or her domicile in a given place in the territory of a state will be governed by the law of that state.

However, the substantial validity of dispositions of property mortis causa will be governed by the law applicable to the succession (see questions 3.1 and 3.2).

4.3 Are foreign wills recognised in your jurisdiction? If so, what process is followed in this regard?

Foreign wills are recognised in Monaco if they comply with the conditions imposed by the law(s) applicable to them (see question 4.2).

In practice, if a foreign non-authentic will (see question 4.5) is discovered in Monaco, it will be presented to the president of the Court of First Instance, who will draw up a report on the presentation, opening and condition of the will, which he or she will order be deposited in the hands of the notary appointed by him or her.

However, if the will has been discovered abroad, it will be recognised as valid in Monaco if it complies with the formalities for its execution in that jurisdiction (eg, grant of probate) without the need for any formalities in Monaco.

4.4 Beyond issues of succession discussed in question 3, are there any other limitations to testamentary freedom?

The main limitation to testamentary freedom is forced heirship (see question 3.3).

The mechanism of public policy may also be relevant in this regard. Thus, if a provision of the will is declared contrary to Monegasque public policy, it may have no effect.

Furthermore, under Monegasque law, the testator must be of sound body and mind to be able to make a will.

4.5 What formal requirements must be observed when drafting a will?

Three forms are provided for ordinary wills, as follows:

  • Holographic: A holographic will must be written, dated and signed by the hand of the testator, failing which it will be null and void.
  • Authentic: An authentic will must be received by two notaries in the uninterrupted presence of two witnesses or by a single notary in the presence of four witnesses. It is drawn up by one of the notaries, who records the wills expressed by the testator. It must be read to the testator before it is signed.
  • Mystical: A mystical will may be written by the testator or by another person. The testator must sign at the end of the provisions if these have been written by him or her; otherwise, he or she must sign each page. The testator, in the presence of four witnesses, will hand the closed and sealed envelope to the notary or have it closed and sealed in his or her presence. The notary will write the act of delivery on the envelope. A testator who cannot read may not make a sealed will.

Exceptional forms of wills include:

  • wills made in times of plague or other contagious diseases;
  • wills made during a sea voyage; and
  • wills made abroad.

An addendum can be made to a will. This is called a codicil. To be valid, it must comply with the same formal requirements as the main will.

4.6 What best practices should be observed when drafting a will to ensure its validity?

The establishment of an authentic will is the safest way to ensure the validity of a will, since the liability of the notary, as a public officer, is engaged in the event of invalidity.

Furthermore, to ensure that the will's provisions are effective, we would advise that a Monegasque legal specialist be consulted, particularly if there are issues of private international law to be addressed.

4.7 Can a will be amended after the death of the testator?

No, a will cannot be amended after the death of the testator.

However, it may be annulled or, if any of its provisions are unclear, it may be subject to interpretation by the court.

4.8 How are wills challenged in your jurisdiction?

The only way to challenge a will is to apply to the court.

4.9 What intestacy rules apply in your jurisdiction? Can these rules be challenged?

Under Monegasque law, the only relationships taken into account to determine legal heirs are those of kinship and marriage.

Thus, the legal heirs of the deceased are his or her descendants, ascendants, collateral relatives and spouse. In the absence of heirs, the estate belongs to the state.

The share of each legal heir will depend on the existence of other heirs. For example, if there is a descendant, the ascendant has no rights in the estate.

In addition, several mechanisms change the legal order of succession. For example, if a father leaves two children, one of whom is predeceased, it is accepted that the children of the predeceased child come in representation of their father in their grandfather's succession.

Finally, Monegasque law protects two categories of heirs by granting them forced heirship rights: ascendants and descendants. In the absence of descendants only, ascendants benefit from forced heirship rights of up to half of the estate.

Descendants always have a forced heirship, the proportion of which depends on the number of children. Thus, the overall forced heirship is:

  • one-half of the deceased's assets if there is one child;
  • one-third of the deceased's assets if there are two children; and
  • one-quarter of the deceased's assets if there are three or more children.

The intestacy rules can be challenged, as there are also conditions that must be met in order to be a legal heir:

  • The heir must exist on the day the succession is opened (excluding children not yet born or born non-viable); and
  • The heir must not be unworthy. The following heirs are unworthy:
    • anyone who has voluntarily given or attempted to cause the death of the deceased;
    • anyone who has made a capital charge against the deceased which is deemed to be slanderous; and
    • an heir of full age who, having been informed of the murder of the deceased, does not denounce it to the law.

5 Trusts

5.1 What laws govern trusts or equivalent instruments in your jurisdiction? Can trusts be governed by the laws of another jurisdiction?

Monaco has no substantive trust law. However, Monaco has enacted special legislation (Law 214) designed to allow residents whose national law incorporates trust law to create trusts (both inter vivos and testamentary trusts) in Monaco, under their national (foreign) law.

Monaco has also acceded to the Hague Convention on the Law Applicable to Trusts and on their Recognition, which entered into force in 2008. Therefore, trusts that are valid under the law designated by the convention are recognised by the Monegasque courts.

The Code on Private International Law contains provisions on the law applicable to trusts and on their recognition, which are in line with the Hague Trust Convention.

5.2 How is any conflict of laws resolved?

Conflicts of law concerning trusts are resolved in accordance with the Hague Trust Convention and the Code on Private International Law.

The Code on Private International Law states that the applicable law to a trust is determined exclusively in accordance with Articles 6 and 7 of the Hague Trust Convention. It also confirms that the applicable law determined as per the Hague Trust Convention applies to all matters referred to under Article 8 of the convention.

5.3 What different types of structures are available and what are the advantages and disadvantages of each, from the private client perspective?

Although Monaco does not have a substantive trust law, Law 214 allows foreign nationals who are resident in Monaco to take advantage of their national law which enables them to create trusts in Monaco either during their lifetime or by a will. This special legislation is designed to allow foreign nationals who are Monegasque residents and whose national law incorporates trust law to create trusts in Monaco under their national law.

The Code on Private International Law, as stated above, confirms that:

  • the applicable law is determined in accordance with the Hague Convention on Trusts; and
  • the areas to which this law applies are those listed in the convention.

The use of trusts under Law 214 is therefore reserved to those persons whose national law provides for the possibility of settling one's estate in a trust. Foreign residents who qualify may thus create a Monaco-based trust according to their national (foreign) law. For example, an English national who is resident in Monaco may establish an inter vivos trust or a testamentary trust in Monaco, pursuant to Law 214, governed by English law. However, such a trust will be subject to the jurisdiction of the Monaco courts.

Trusts created under Law 214 are subject to very strict formal requirements.

See question 5.7 in relation to the tax regime applicable to trusts created pursuant to Law 214.

5.4 Are foreign trusts recognised in your jurisdiction? If so, what process is followed in this regard?

The legal recognition of foreign trusts and their effects in Monaco has been established since the entry into force of the Hague Trust Convention and was recently enshrined in the Code on Private International Law.

Monaco applies the Hague Trust Convention. The concept of trust is therefore recognised in Monegasque law under the conditions set out by the convention. Furthermore, the Code on Private International Law confirms the recognition of foreign trusts in accordance with the Hague Trust Convention. Foreign trusts are therefore recognised in Monaco.

The recognition of foreign trusts under the Hague Trust Convention implies that if a trust is valid under the law designated by the conflict of law rules set out in the convention, it should be recognised and effective in the contracting states.

Generally, a foreign trust that has been validly created under a foreign law should be recognised by the Monaco courts, subject to public policy considerations. In particular, upon the settlor's deaths, there can be questions relating to the potential conflict between trust provisions and forced heirship rules.

However, at this stage there is little Monegasque case law on trusts and there is some uncertainty as to the treatment of trust property by the Monaco courts. Therefore, this remains a question open for debate in the Monegasque courts.

5.5 How are trusts created and administered in your jurisdiction?

Trusts settled in accordance with Law 214 must be created by an authentic instrument made before a Monegasque notary public and comply with strict formal requirements. A legal certificate stating that the trust instrument complies with the substantive requirements of the applicable foreign law must be provided by a qualified lawyer whose name appears on a special list held by the Monaco Court of Appeal. A Monaco-based corporate trustee must be appointed from the list of trustees kept by the Court of Appeal. A co-trustee may be freely appointed by the settlor.

Law 214 (as amended) sets out specific due diligence, reporting and accounting obligations for the trustees. See question 5.8.

5.6 What are the legal duties of trustees in your jurisdiction?

Pursuant to Article 8 of the Hague Trust Convention, the duties of trustees are governed by the law applicable to the trust.

See questions 5.3, 5.5 and 5.8.

Trusts created pursuant to Law 214 must report on their beneficial owners, as well as other information such as:

  • the settlor(s)'s identity;
  • the trustee(s)'s identity; and
  • the ownership and control structure.

Such information must be communicated by the trustee together with supporting documentation and is included in the Monegasque trusts register.

5.7 What tax regime applies to trusts in your jurisdiction? What implications does this have for settlors, trustees and beneficiaries?

Trusts created pursuant to Law 214 are subject to proportional registration duties that are payable as a percentage of the total value of the assets placed in trust. Registration duties vary depending on the number of beneficiaries, as follows:

  • One beneficiary: 1.3%;
  • Two beneficiaries: 1.5%; and
  • More than two beneficiaries: 1.7%.

Alternatively, at the parties' request, an annual tax of 0.2% of the value of the trust assets may be paid. This tax is levied to the exclusion of any gift or succession tax.

There are reduced rates for Monegasque securities.

For trusts other than those subject to Law 214 (ie, foreign trusts), tax is due in Monaco when a transfer of property, assets or rights situated in Monaco is made to a beneficiary. The value taken into account to calculate the tax is the net value of the property, assets or rights in question at the date of the transfer. The Monegasque tax services used to apply the highest tax rate of 16% which is the rate applied between persons with no family relations.

However, the Monegasque tax authorities have departed from this policy and in practice, they will take into account the relationship between the settlor and the beneficiary to work out the applicable tax rate (which could be more advantageous). This practice was not confirmed by law until 12 August 2022.

Since 12 August 2022 and the entry into force of Law 1.529 of 29 July 2022 modifying Law 580 of 29 July 1953, the position for the taxation of foreign trusts has been confirmed. The tax rate is the same as that used for lifetime gifts in Monegasque law and depends on the relationship between the settlor and the beneficiary receiving the transfer. This relationship is defined in accordance with the law which governs the trust. The tax rates are set out under Law 580 as follows:

  • 8% for transfers between siblings;
  • 10% for transfers between uncles, aunts, nephews or nieces;
  • 13% for transfers between other collateral relatives; and
  • 16% for persons with no kinship (persons with no family relations).

There is no tax for transfers between spouses (Law 704 of 5 June 1961 amending the Tax Regime of Free Transfers between Spouses).

5.8 What reporting requirements apply to trusts in your jurisdiction?

See question 2.7(a) for the reporting obligations for trusts that hold real estate in Monaco.

Law 214, as amended by Law 1.503 of 23 December 2020 Strengthening Measures to Combat Money Laundering, Terrorist Financing and Corruption, sets out the following reporting requirements:

  • The trustee and any person holding an equivalent position in legal arrangements similar to trusts must declare their status and provide, in due time, to the bodies and persons referred to in Articles 1 and 2 of Law 1.362 of 3 August 2009 on the Fight against Money Laundering, Terrorist Financing and Corruption, as amended, the information referred to in Article 6-1 of that law when, acting on behalf of a trust or similar legal arrangement, they establish a business relationship or occasionally carry out a transaction which reaches or exceeds the amount of €15,000.
  • Furthermore, in the following cases, the trustee must register with the department in charge of the register of trusts in the principality within one month of the creation, modification or termination of a trust or any equivalent legal arrangement or of the acquisition of the property or the establishment of the business relationship in the principality:
    • where a trustee established or domiciled in the principality administers a trust established or transferred in the principality; or
    • where a trustee and any person who occupies an equivalent function in legal arrangements similar to trusts, established or domiciled outside the European Union, acquires real estate or establishes a business relationship in the principality.
  • Where trustees or persons holding equivalent positions in a similar legal arrangement are established or domiciled in more than one EU member state, or where the trustee or person holding an equivalent position in a similar legal arrangement establishes multiple business relationships on behalf of the trust or legal arrangement in more than one of these states, the registration requirement is satisfied by providing the minister of state with a certificate proving registration with the register of one of these states or an extract from the information on beneficial owners held in the register of one of these states.

5.9 What best practices should be observed in relation to the creation and administration of trusts?

See questions 5.5, 5.6 and 5.8.

6 Trends and predictions

6.1 How would you describe the current private client landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

Monaco is becoming increasingly globalised, as the number of foreign residents continues to rise. In 1982, Monaco had about 27,000 foreign residents; by 2016, this figure had soared to over 37,000, according to statistics provided by the Institut Monégasque de la Statistique et des Études Économiques. (On 31 December 2021, the population was estimated at 39,150, according to Ministerial Order 2022-201 of 19 April 2022; and on 31 December 2022, the population was estimated at 39,050, according to Ministerial Order 2023-220 of 21 April 2023.) In 2016, only 8,378 residents of Monegasque nationality were counted. In the same 2016 census, 139 nationalities were listed among the residents living in Monaco.

The growing number of foreign nationals looking to set up in Monaco led the Monegasque Supreme Court, in a decision of 12 July 2022, to clarify one of the criteria for Monegasque residency – in particular, for residents looking to renew their resident permits. It confirmed that persons looking to set up in Monaco must apply for a resident permit if they remain in the principality for over three months. It is not a strict requirement for residents looking to renew their permit to have been effectively living in Monaco for a minimum of three months during the year prior to their renewal request. However, when considering whether to renew a resident's permit, the authorities can take into account the necessity of the permit and whether the applicant is likely to remain for at least a minimum of three months in the principality in the coming year (if not, the resident permit may be deemed unnecessary and the authorities could refuse to issue it). In doing so, the authorities can consider whether a resident applying for renewal lived effectively in the principality for at least three months in the past year.

The demand for Monegasque residency is also reflected in its buoyant property market. This is why a proposal for a new law on the regulation of the profession of real estate property traders (Law Proposal 252), whose activity involves purchasing, renovating and reselling real estate property for a profit, was adopted on 10 May 2021. The new law aims to regulate the exercise of that profession and ensure that profits made by property traders are appropriately taxed.

Thus, aware of the positive effects that the proposed provisions could have in terms of budgetary revenue and limiting the risk of speculation in the principality, the government, in accordance with Article 67 of the Constitution, informed the National Council, in a letter dated 22nd October 2021, of its decision to transform this proposal into a bill, thus attesting, with the Assembly, to the interest of regulating the activity of property dealers in the principality. This bill was studied by the National Council on 9 May 2023 and the amendments were approved.

The growing recognition of the importance of gender equality and LGBTQ+ rights worldwide has also had an impact on Monegasque law, which is being modernised in this regard. In an unprecedented decision issued on 4 July 2022, the Monegasque First Instance Tribunal legally recognised the change in gender of a transsexual French-Monegasque dual national. In a recent decision dated 28 September 2023, the Appeal Court also confirmed a first-instance judgment granting recognition in Monaco of a same-sex marriage concluded abroad. However, there is still progress to be made regarding the recognition in Monaco of the rights of same-sex couples married abroad, who do not enjoy the same rights as heterosexual couples – specifically concerning inheritance tax or reversionary pension.

Law 1.523 of 16 May 2022 regarding the promotion and protection of women's rights has already had a major impact on the law. Indeed, many legal texts – including articles of the Civil Code – were reviewed to remove any references and laws deemed sexist. For instance, the 'waiting period' which was required of divorced and widowed women before they could legally remarry has been scrapped.

Finally, in order to promote the attractiveness of the Monegasque art market, Bill 1.526 of 1 July 2022 and Sovereign Order 10.300 of 22 December 2023 has updated the rules previously applicable to the artists' resale right. This text broadens the scope of works covered (plastic, artistic, literary, scientific, audiovisual and digital works) to include works created by the artist themselves or under their responsibility in limited quantities, such as bronzes, signed photographs and original manuscripts of writers and composers.

Law 1.526 has increased the duration of the protection of the resale right on behalf of artists post-mortem from 50 to 70 years, thus standardising the Monegasque duration of protection with the duration of protection in force in the European Union under the Artist Resale Right Directive (2001/84/EC).

Artists have also been given the opportunity to transfer their resale right for payment or free of charge, by will or bequest, within the limits of the respect of the reserved portion awarded by law to their heirs, allowing artists to dispose of this economic right within the framework of their estate planning.

The current private client landscape in Monaco is inherently international due to the high percentage of foreign residents in Monaco (75%). It will be interesting to see how these societal and cultural changes continue to shape the private client landscape and Monegasque private international law.

7 Tips and traps

7.1 What are your top tips for effective private client wealth management in your jurisdiction and what potential sticking points would you highlight?

The codification of the conflict of law and jurisdiction rules following the enactment of the Code on Private International Law has introduced major changes to all areas of private law. The new provisions allow for better matrimonial and estate planning and anticipation, which are of major importance in the international context.

New legislation has also been introduced to allow individuals to make advance arrangements for their care, representation or both in the event of incapacity. This possibility – introduced by Law 1474 of 2 July 2019 on the Maintenance of Justice, Tutelage, Legal Guardianship, the Enduring Power of Attorney and the Exercise of the Activity of Judicial Representative for the Protection of Persons to Prepare an Emergency Planning by Drafting with the Assistance of a Lawyer and a Public Notary an Enduring Power of Attorney (EPOA) on His/Her Behalf, as well as on Behalf of His/Her Children – is a highly appreciated new asset management tool, as demonstrated by the ongoing development of its use. This is a protection system of a conventional nature, allowing anyone to designate, in advance, by power of attorney, one or more persons to represent them or to ensure the protection of their personal or property interests in the event of an alteration to their mental or physical faculties making them unable to look after their own interests. The establishment of an EPOA also meets the need to take into account the will of the protected person, allowing him or her to feel confident with his or her attorney(s) and ensure full cooperation from the principal in the latter's mission.

The Code on Private International Law came into force on 8 July 2017, but the case law is still scarce and some uncertainty remains regarding its interpretation by the courts. Clarification has been provided on the application of the code by Law 1.529 of 29 July 2022 (see question 3.2).

Due consideration should be given to estate and matrimonial planning, as well as to planning for incapacity, to ensure robust wealth protection in the event of unforeseen circumstances and life events which may affect private clients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.