Draft law no. 268 relating to the Monegasque Patrimonial Foundation

Draft law no. 268 on the Monegasque Patrimonial Foundation (of parliamentary origin) was tabled on 11 June 2025 and adopted on 18 June 2025.

Its aim is to "provide Monegasque law with a competitive legal vehicle capable of offering purposes comparable to foreign law trusts and foundations" in other civil law countries (Switzerland, Liechtenstein, the Netherlands, Belgium), which "have in common that they are oriented towards the preservation of assets, the perpetuation of family businesses and estate planning" (Explanatory Memorandum to draft law no. 268).

Note: a draft law adopted by the Parliament (Conseil National) is then forwarded to the Government, which has the option of either transforming it into a bill or suspending the legislative procedure. The Minister of State must inform the Parliament of his decision by 23 December 2025 (Legimonaco, Actualité, 14 juillet 2025).

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Content of draft law no. 268

→ Constitution of the "Fondation Patrimoniale Monégasque" (FPM) (articles 1 to 3)

• Definition of the FPM: "a legal entity established for the purpose of receiving ownership of movable or immovable property, or rights in rem, transferred by one or more founders, for the purpose of administration in favour of one or more beneficiaries, or for the realisation of one or more specific purposes".
• Status of founder: "any natural person, or any entity whose purpose is to manage the assets of one or more persons".
• Connection with Monaco: "The founder and at least the majority of the foundation's directors must be domiciled or have their registered office in the Principality".
• Ancillary activities: "philanthropic work", "commercial activity". Professional, industrial or craft activities are prohibited.
• Succession/forced heirship: the establishment of the foundation may not have the effect of affecting the forced heirship of an heir of the founder as conferred, where applicable, by the law applicable to the succession.
• Deed of incorporation: in principle, the deed of incorporation of the foundation is drawn up by notarial deed or by private deed in compliance with article 1172 of the Civil Code (multiple originals); by exception, the deed of incorporation and its amending deeds are drawn up by notarial deed when the endowments relate to immovable property or rights in rem relating to immovable property. The mandatory information is the same as that in the articles of association of Monegasque public limited companies (SAMs) (article 12 of Law no. 1.573 of 8 April 2025 on the modernisation of company law), with specific information relating to the foundation mechanism.
• Compulsory initial endowment: cash amount of at least 10,000,000 €; may be supplemented by contributions in kind.
• Publication formalities for assets transferred to the foundation: real estate, other assets, rights in rem, in accordance with the relevant legal and regulatory conditions.
  

→ Authorisation and registration of the "Fondation Patrimoniale Monégasque" (articles 4 to 8)

• Prior administrative authorisation: issued by the Minister of State, in principle within 45 days of notification of the admissibility of the application; exceptionally, this period may be extended for a maximum of 45 days if the application for authorisation requires special diligence in the context of complex cases.
• Registration: the FPM obtains legal personality as soon as it is registered in the special register instituted by Law no. 797 of 18 February 1966 on civil companies, as amended. See FATF Recommendation 24 (Transparency and beneficial ownership of legal persons ownership).

→ Governance of the "Fondation Patrimoniale Monégasque" (articles 9 to 12)

• Directors ("administrateurs") of the FPM: natural persons or legal entities (in the latter case, with the appointment of a permanent representative, a natural person) appointed by the founder(s) and representing the foundation; appointment of a deputy director (to prevent vacancies arising: death, resignation, incapacity); management autonomy of the directors, with due respect for the prerogatives that the founder may reserve for him/herself in the deed of incorporation; limited liability of the directors (for faults committed in the performance of their duties, depending on the scope of their mandate; except in the case of serious misconduct, they are not held personally liable for the debts or obligations of the foundation).
• Supervisory Board ("Conseil de surveillance"): optional additional governance body, consisting of at least three members who are natural persons (distinct from the directors).

→ Various obligations of the "Fondation Patrimoniale Monégasque" (articles 13 à 18)

• Accounting: annual balance sheet, showing the endowment funds, and profit and loss account in the form provided for by Sovereign Order no. 3.167 of 29 January 1946 regulating the drawing up of the balance sheet of public limited companies and limited partnerships, and where applicable, the valuation of the portfolio of securities held; auditor appointed from among the members of the Monaco Order of Chartered Accountants.
• Obligation to open a bank account with a credit institution established in Monaco: for the payment of the initial endowment in cash, and day-to-day management for as long as the foundation is in operation, with the obligation to permanently hold a minimum percentage of 50% of its financial assets with the institution (bank deposits, units in collective investment undertakings and financial securities held by the foundation are taken into account in this calculation).
  

→ Tax regime (articles 19 and 20)

• Acts registered with the Direction des Services Fiscaux: the deed of incorporation of the foundation is subject to a fixed duty of 1000 €, or where the founder is an entity, to a proportional duty of 2%, calculated on the total amount of the value of the assets or rights transferred to the foundation; with the exception of Monegasque securities subject to a reduced rate of 0.50% ; deeds recording the modification of basic information, the extinction of the constitutive deed, and the transfer of property or real rights subsequent to its constitution are subject to the fixed duty of 50 € provided for in article 2 of law no. 580 of 29 July 1953 on the adjustment of registration and mortgage duties, as amended.
• Assets passed on to beneficiaries through the FPM when the founder is anatural person: the assets and rights constituting the assets of the foundation are subject to death duties according to the degree of kinship existing between the founder and the beneficiary, on the share of the assets allocated to them, subject to international tax conventions. Transfer duties must be paid by the beneficiaries on the death of the founder, regardless of when the foundation was set up, whether during the founder's lifetime or by will. Inspired by the tax regime provided for trusts set up or transferred in Monaco, in article 21-2 of law no. 580 of 29 July 1953 on the adjustment of registration and mortgage duties, as amended.

→ Dissolution and liquidation of the "Fondation Patrimoniale Monégasque" (articles 21 to 27)

• Cases of dissolution : 1°) the expiry of the period for which it was established; 2°) the achievement or extinction of its purpose; 3°) early dissolution decided by the founder; 4°) the effect of a final judicial decision pronouncing the early dissolution of the foundation; 5°) the revocation of its administrative authorisation; 6°) any other cause provided for by the constitutive deed. In the event of the dissolution of the foundation provided for in points 3°) to 6°) within 5 years of the foundation's formation, the reinstatement of the assets and rights in the founder's estate is subject to the payment of an additional duty of 5% on their market value. This provision "is intended to protect the Principality against the abusive use of the patrimonial foundation (...) tends to encourage the creation of foundations whose objective is the lasting allocation of the founder's assets, so that the foundation is not transformed into a simple "temporary car park" for the founder's assets". (Explanatory Memorandum to draft law no. 268).
• Procedures for liquidation upon dissolution.

→ Miscellaneous provisions (articles 28 and 29)

• Supervision by the Directorate of Economic Development ("Direction du Développement Economique" DDE).
• Fight against money laundering, the financing of terrorism and proliferation of weapons of mass destruction, and corruption: application to FPM of the provisions set out in section V Beneficial Owner of Chapter II of law no. 1.362 of 3 August 2009 as amended, and of the related penalties.

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