Monaco corporate tax - guide for international expansion

Monaco presents a unique corporate tax landscape that often surprises international businesses. While the principality is renowned for having no personal income tax, it does impose corporate income tax under specific circumstances that companies must understand.

Navigating Monaco's corporate tax requirements is crucial for businesses looking to establish operations in this prestigious jurisdiction. Wise Business can help streamline your financial operations in Monaco, making it easier to manage payments and compliance in euros while expanding your business internationally.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Monaco Corporate Tax Rate in 2026

Monaco's standard corporate income tax rate is 25% as of 2025. This rate applies to companies that generate more than 25% of their revenue from outside the principality. Companies that earn 75% or more of their revenue within Monaco are exempt from corporate income tax entirely.1

The corporate tax, known as "impôt sur les bénéfices," has been reduced from the previous rate of 33.33% to the current 25% rate. This reduction makes Monaco more competitive with other European jurisdictions while maintaining its attractive tax environment for local businesses.1

New companies benefit from significant exemptions during their initial years of operation. Newly formed companies can enjoy 0% corporate tax for the first two years, followed by a graduated increase: 6.25% in the third year, 12.5% in the fourth year, and 18.75% in the fifth year, before reaching the full 25% rate from the sixth year onwards.1

How to Pay Corporate Tax in Monaco

Corporate tax payments in Monaco are made in euros, and companies subject to corporate income tax must file their returns within 3 months of their financial year-end, or before April 1st for companies following the calendar year.1

The payment system operates on an installment basis throughout the year. Companies must make four corporate tax installments in February, May, August, and November, with each installment representing 20% of the corporate tax paid in the previous financial year. The outstanding balance is paid when filing the annual corporate tax return.2

Companies must maintain proper accounting records for at least 10 years if they are subject to corporate tax, or 5 years if they are not subject to corporate tax. Failure to file returns on time can result in penalties and interest charges.1

Monaco's corporate tax system includes several advantages: there are no withholding taxes on dividends or interest payments, possible exemptions for dividends received from subsidiaries, and generous Research and Development tax credits to promote innovation.3

Let's consider a practical example: If your company has a turnover of €1.5 million and operates with a profit margin of 10%, giving it a taxable profit of €150,000, and more than 25% of revenue comes from outside Monaco, the corporate tax calculation would be:

At Monaco's corporate tax rate of 25%, the tax owed would be: €150,000 × 25% = €37,500

When expanding your business to Monaco, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Monaco

Businesses should follow these key steps to stay compliant with tax regulations in Monaco:

• Understand corporate tax rules: Companies generating at least 75% of their turnover within Monaco are exempt from corporate tax. However, if more than 25% of revenue comes from abroad, a 25% rate applies. In such cases, setting up corporate tax payment plans can help businesses manage liabilities and avoid penalties.⁴
• Account for VAT obligations: Although Monaco is not an EU member, it applies the French VAT system. The standard VAT rate is 19.6%, with a reduced rate of 5.5% for essentials like food, books, and medicines. Companies must ensure accurate VAT collection and timely payments to stay compliant.⁵
• Annual filing requirements: All companies must prepare financial statements, including a balance sheet, profit and loss statement, directors’ report, and auditor’s opinion. These statements must be filed with the Trade and Industry Register within nine months of the financial year’s end. Late filings may result in penalties ranging from €15 to €1,000.⁶
• Inheritance and gift taxes: These apply only to assets located in Monaco, with exemptions for transfers to charitable institutions.

International Expansion to Monaco

Monaco is more than a luxury destination on the French Riviera. It is a small but powerful hub for global business. The Principality continues to attract companies seeking secure, long-term growth opportunities with its political stability, central European location, and highly favorable tax environment.⁷
The appeal of Monaco lies firmly in its tax system. Residents benefit from the absence of personal income tax, wealth tax, and capital gains tax on real estate. Businesses also find clarity and predictability in the Monaco corporate tax rate, supported by a transparent framework aligned with French customs law.⁸

Investors often ask how long it takes to file corporate tax return obligations in Monaco. In practice, deadlines and filing procedures are quite simple, ensuring companies can remain compliant without excessive bureaucracy. Currently, the Principality does not impose a corporate alternative minimum tax, though corporate tax reforms in Europe continue to influence how Monaco positions itself within the regional landscape.

Beyond tax advantages, Monaco boasts a resilient and high-performing economy. Its GDP grew to €9.24 billion in 2023, a 5% increase from the previous year. GDP per capita, nearly €100,000, ranks among the highest in the world.^{9 10} These indicators reflect strong productivity and purchasing power, fueling tourism, real estate, and financial services demand. Moreover, using the Euro and access to the EU single market through French customs law further simplifies trade and operations. Entrepreneurs can also count on a highly skilled workforce and near-zero unemployment rates, giving businesses stability and talent security.⁸

Setting up a business in Monaco requires following these steps:¹¹

1. Identify demand, competition, and opportunities in key sectors like tourism, real estate, and finance.
2. Outline goals, structure, and financial forecasts.
3. Select a location and entity type.
4. Register your business name.
5. Enter the Register of Trade and Industry. Submit articles of association and publish an establishment notice in the Journal de Monaco.
6. Get a Statistical Identification Number (NIS). Issued by IMSEE, this is required for banking, utilities, and reporting.
7. Declare the company to the Department of Tax Services.
8. Open a bank account. This is needed for capital verification and transactions.
9. Maintain records properly.
   By following these steps, businesses can quickly establish operations. Ensure that you know all about business culture andtop banks to avoid setting foot in the wrong places.

Incorporation of Business in Monaco

To incorporate a company in Monaco, you must visit the government portal MonEntreprise. The following details are required:¹²

• Memorandum and Articles of Association: which must include:

• Company’s legal form
• Company name (as per Article 35-2 of the Commercial Code)
• Registered office address
• Duration of the company (maximum 99 years)
• Date of effect (date of signing, registration, or official authorization)
• Share capital amount and valuation of contributions in kind
• Allocation of shares among shareholders
• Company objects (business purpose)
• Appointment of Managing Director(s)
• Rules for shareholder meetings and decision-making procedures
• Company year-end

• Share Capital: must be fully paid up; each shareholder contributes in cash or kind in return for shares.
• Registered Office: usually established through a commercial lease or tenancy agreement.
• Managing Director: must be a natural person (not a company). Can be a shareholder or a third party.
• Shareholders: participate actively in company life and vote on resolutions at general meetings.
• Tax and Compliance: businesses must declare their existence with the Department of Tax Services and maintain proper accounting records.

The government also provides a corporate tax helpline to support Monaco corporate tax policy compliance. Many companies rely on corporate tax planners to structure operations efficiently and understand how to avoid corporate tax risks or penalties.

Business Entities in Monaco^{5 13}

Monaco’s Commercial Code defines several entity types, largely aligned with the French system:

• Sole Proprietorship: Formed by a single entrepreneur with unlimited personal liability. No minimum capital required.
• General Partnership (SNC): At least two partners with unlimited liability for debts. Both can manage unless otherwise agreed.
• Limited Partnership (SCS): Combines general partners with full liability and silent partners with limited liability.
• Limited Liability Company (SARL): Requires a minimum capital of €15,000. Liability is limited to contributions, and share transfers need shareholder approval.
• General Business Corporation (SAM) and Limited Partnership with Shares (SCA): Designed for large ventures with a minimum capital of €150,000. Government authorization is required, and at least two shareholders must be involved.

Note (Update 2025): Monaco recently modernised its company law through Law No. 1.573, introducing single-member limited liability companies. The reform also simplifies incorporation procedures, allowing videoconference meetings and streamlined registration.

International corporate tax best practices

International businesses operating in Monaco should focus on several key strategies to ensure compliance and optimise their tax position.

Stay compliant with local and international tax laws by completing the legal registration process and maintaining proper substance in Monaco. Companies must have a registered office in Monaco or their place of effective management in the principality to be considered Monaco tax residents.

Understand and adhere to global standards set by organisations like the OECD. Monaco has implemented BEPS (Base Erosion and Profit Shifting) measures, including country-by-country reporting requirements for multinational groups with consolidated annual revenue exceeding €750 million. The principality has also signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and implements the Common Reporting Standard for automatic exchange of financial information.

Leverage Monaco's transparent regulatory environment. Unlike traditional tax havens, Monaco maintains full compliance with international transparency standards and exchanges tax information with other jurisdictions under various agreements. This transparency provides certainty for legitimate business operations while ensuring compliance with home country tax obligations.

Maintain comprehensive and accurate financial records. Monaco requires detailed accounting records and has implemented transfer pricing rules requiring arm's length pricing for intercompany transactions.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Monaco efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.
• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.
• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.
• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.
• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

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Disclaimer: The UK Wise Business pricing structure is changing with effect from 26/11/2025 date. Receiving money, direct debits and getting paid features are not available with the Essential Plan which you can open for free. Pay a one-time set up fee of £50 to unlock Advanced features including account details to receive payments in 22+ currencies or 8+ currencies for non-swift payments. You’ll also get access to our invoice generating tool, payment links, QuickPay QR codes and the ability to set up direct debits all within one account. Please check our website for the latest pricing information.

FAQs - Corporate Tax in Monaco

Who is liable for corporate tax in Monaco?

Companies and sole proprietors that generate at least 25% of their turnover from outside Monaco are subject to corporate income tax at 25%. Companies earning 75% or more of their revenue within Monaco are exempt from corporate tax. The tax applies to both incorporated companies and individuals carrying on commercial or industrial activities.

Are there any tax incentives for businesses in Monaco?

Yes, Monaco offers significant tax incentives for new companies. Newly formed businesses can enjoy 0% corporate tax for the first two years, followed by graduated rates: 6.25% in year three, 12.5% in year four, and 18.75% in year five, before reaching the full 25% rate. Additionally, there are generous Research and Development tax credits available to promote innovation.

What is the tax treatment of dividends in Monaco?

There are no withholding taxes on dividend distributions from Monaco companies. This means dividends can be distributed to shareholders tax-free at the corporate level. However, the treatment may vary depending on the recipient's tax residence and applicable double taxation treaties.

What is the process for registering for corporate tax in Monaco?

Companies must obtain official authorization to conduct business activities in Monaco before registration. The most common company form is the SARL, requiring minimum share capital of €15,000 and at least two shareholders. Companies must have a Monaco address and register with the Monaco Trade Registry after obtaining authorization and opening a local bank account.

What are the common pitfalls to avoid regarding corporate tax in Monaco?

The main pitfall is misunderstanding the 25% revenue threshold - companies generating more than 25% of revenue outside Monaco are subject to corporate tax, even if they assume Monaco is "tax-free". Another common issue is failing to maintain adequate substance in Monaco, which can lead to challenges from foreign tax authorities. Companies should also ensure proper transfer pricing documentation for intercompany transactions and maintain required accounting records for the appropriate period (10 years for tax-liable companies).

Sources used in this article:

1. Monaco RG: Monaco Corporate Tax Rate
2. Legal 500: Monaco Tax Guide
3. In-House Lawyer: Monaco's Attractive Tax Framework for International Business
4. Monaco RG: Opening a Company in Monaco (Corporate Tax)
5. VIP Brok: Monaco Types of Company
6. GSL Law & Consulting: Audit in Monaco
7. Rey Nouvion: Why Invest in Monaco
8. Lloyds Bank Trade: Investing in Monaco
9. World Bank: Monaco GDP Per Capita
10. Monaco Statistics (IMSEE): Economy and Finance / GDP
11. GSL Law & Consulting: Monaco SARL (Offshore Zones)
12. MonEntreprise: What is an SARL (Limited Liability Company)
13. Lawyers Monaco: Open a Company in Monaco
    Sources last checked 08/10/2025