OBLIGATION TO REPORT BENEFICIAL OWNERSHIP IN MONACO

Law No. 1.362 dated 3 August 2009 on combating money laundering, terrorist financing and corruption was amended by Law No. 1.462, dated 28 June 2018.
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The Principality of Monaco has taken the initiative in combating money laundering, terrorist financing and corruption.

It has set up a register of beneficial owners, a move which has already been discussed in France (Declaration relating to beneficial ownership).

Article 21 of Law No. 1.362, as amended by Law No. 1.462 defines a beneficial owner as being:

  • a person or persons who control(s) or own(s) a company or entity, whether directly or indirectly; or
  • a person or persons on behalf of whom a transaction or activity is carried out.

Sovereign Ordinance No. 7.065 dated 26 July 2018 specifies the conditions for the application of Law No. 1.362.

Under Article 14 of the Ordinance, it appears that where there is a legal entity, the beneficial owner may be:

  • a natural person or person(s) who ultimately directly own(s) or control(s) 25% of the share capital or voting rights; or
  • a person or person(s) who exercise(s) control over the share capital or management bodies (management, administrative, etc.) by any other means (i.e. other than by directly or indirectly holding 25% of the share capital or voting rights).

Division of ownership is also referred to at Article 14 of Sovereign Ordinance No. 7.065, and is dealt with as follows:

  • natural persons having bare ownership who ultimately directly or indirectly own or control 25% of the share capital or voting rights are considered to be beneficial owners;
  • natural persons with usufruct who ultimately directly or indirectly own or control 25% of the share capital or voting rights are considered to be beneficial owners.

In France, a beneficial owner is considered to be:

  • any natural person who holds directly and/or indirectly (via an intermediate entity) at least 25% of the share capital and/or voting rights;
  • if the latter is unknown (e.g. no shareholder holds, whether directly and/or indirectly, more than 25% of the share capital and/or voting rights), any person exercising a right of control over the board of directors and/or management (e.g. a managing director or president) must be declared.
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In the Principality of Monaco, the following entities will be subject to this reporting obligation (declaration of beneficial owners) as set out at Article 21 of Law No. 1.362 as amended by Law No. 1.462:

  • commercial companies, including SARL (Société à responsabilité limitée); SAM (Société Anonyme Monégasque); SNC (Société en Nom Collectif); SCS (Société en Commandite Simple);
  • Economic Interest Groupings registered with the RCI (Trade and Industry Register);
    non-trading companies registered in the special registry held in the RCI directory.

Article 61 of Ordinance No. 7.065 provides information on the elements which should enable identification of beneficial owners and states which elements must be reported in respect of this (see below).

Information which companies must provide concerning beneficiaries (a beneficiary being the person or persons determined having regard to the factors set out above) must include:

  • the identity of the company or the entity reporting in respect of its beneficial ownership, such that on the beneficial ownership form, it will be necessary to provide the name of the entity, its legal form, registration number, registered office, and the number of beneficial owners present in the company or entity;
  • information relating to the beneficial owner, including surname, preferred name, first name, date of birth, place of birth, nationality, and postal address.

Article 13 of Ordinance No. 7.065 states which elements must be reported to enable identification of beneficial owners (see. below).

In addition, where ownership is indirect, the manner in which share capital is held must be provided.

Similarly, the manner in which persons exercise control over the company or entity must be provided where this is “by any other means”.

In addition, the date on which a person became a beneficial owner of the company must be provided.

The beneficial ownership form must be signed by:

  • the legally authorised representative of the company;
  • or anyone else authorised to represent the company.

Regarding the identity of persons having access to the information published in the “register of beneficial owners”, Article 22 of Law No. 1.362, as amended by Law No. 1.462 specifies that the following will have access to this data:

  • the Monegasque public authorities (e.g. the Service d’Information et de Contrôle sur les Circuits Financiers, the judicial authorities, and authorised agents of the Department of Tax Services);
  • organisations and other persons defined in Articles 1 and 2 of the Law;
  • anyone with a legitimate interest in money laundering, terrorist financing and/or corruption, provided that they are authorised by the President of the Court of First Instance.

The beneficial ownership register will be annexed to the register at the RCI.

Important: entities and companies have a period of 2 years from the publication of Law No. 1.462 to file the form with the RCI, so you have until 28 June 2020 to meet your reporting obligations.

How can we help?

Contact Maître Benjamin A. Kergueno, Attorney at Law today if you are dealing with issues related to real estate law in France and on the French Riviera.

Maître Benjamin A. Kergueno, LL.M will provide you with a full set of informations and with the adequate counsels for sorting it out.

For more information or to schedule an appointment with an experienced lawyer regarding real estate law in France, please contact us.

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