Monaco: Types of Company
This page was last updated on 18 February 2021.
A foundation has been described as the civil law equivalent of the common law trust. The administrators (like a trust’s trustees) run a foundation that has a separate legal personality from its founder and administrators. A foundation is often preferable to a Law 214 trust.
A Monégasque foundation has the following characteristics:
- Can be created in perpetuity or for a fixed period
- Can be created for any purpose which does not offend public policy and which is regarded as in the public interest
- Can be created by will, unlike a Law 214 trust a foundation created inter vivos must be made by notarial deed
- Subject to much stricter regulations than trusts
- Unlike a trust, a foundation must obtain the approval of the sovereign under Monaco law. Approval may take many months and is only granted if the foundation has sufficient assets to achieve its purposes. This cumbersome requirement means that there are very few foundations in Monaco
- Unlike trusts, foreign nationals cannot use foundations to avoid the forced heirship rules of civil law jurisdictions
- Administrators must be Monégasque citizens or have resided there for at least one year
- Subject to supervision by a local commission, with powers to inspect and copy all documents relating to administration or accounting and dismiss the administrators in certain circumstances.