Trusts in Monaco: A Strategic Guide to Wealth Structuring, Succession & Estate Planning

What is a trust?

A trust is a legal arrangement through which assets are placed under the control of a trustee for the benefit of designated beneficiaries or for an identified purpose, in accordance with the applicable governing law.

Unlike an ordinary company, a trust is not necessarily a separate legal entity.

Its legal characteristics depend on the governing law and the terms of the trust instrument.

The principal participants

Settlor

The individual or entity establishing the trust and transferring or arranging the relevant assets.

Trustee

The person or institution responsible for administering the trust assets according to the trust instrument and applicable law.

Beneficiaries

The persons or categories of persons entitled to benefit from the trust under its terms.

Protector

Where appointed, a person who may exercise oversight or specified powers under the trust instrument.

Trust assets

Depending on the governing law and relevant legal restrictions, trust assets may include financial investments, company interests, real estate and other property.

Their transfer, administration and treatment must be examined individually.

A trust may hold interests in Monaco real estate where the governing law and applicable property rules permit it. Recognition of the trust does not itself validate a property transfer: local title, execution, registration and tax requirements must be assessed separately.

Why are trusts used?

Trust arrangements may be considered for:

• Intergenerational wealth transmission.
• Family governance.
• Continuity of asset administration.
• Management of interests involving several beneficiaries.
• Succession planning.
• Administration of complex international holdings.

A trust does not automatically provide tax advantages, creditor protection or immunity from inheritance rules.

Its suitability depends on the settlor's circumstances, applicable law and the relevant jurisdictions.

Monaco's specific trust regime

The principal legislative framework is Law No. 214 of 27 February 1936, as amended.

This legislation allows certain persons whose personal law permits the use of trusts to make arrangements in Monaco under a selected foreign trust law, subject to prescribed conditions.

Monaco residence alone does not establish eligibility under Article 1. The settlor's personal law must be assessed independently.

Monaco's framework should not be described as a general domestic trust law identical to the systems operating in common-law jurisdictions.

Constitution and transfer of trusts

Under Article 2 of Law No. 214, the constitution or transfer of a trust in Monaco is subject to specific formal requirements.

Testamentary trusts must comply with the prescribed Monaco formalities applicable to public or mystic wills.

Inter vivos trusts must comply with the relevant formalities applicable to gifts between living persons.

An attestation confirming the trust instrument's substantive compliance with the chosen foreign law is required from a qualified legal expert entered on the list maintained by the First President of the Court of Appeal on the proposal of the Prosecutor General. Failure to comply with the prescribed execution formalities carries a risk of nullity under Article 2.

The qualifications and appointment of trustees and local representatives are also regulated.

Article 4 distinguishes transfer from recognition: a transfer follows the statutory constitution requirements and is recorded by the settlor and trustee depositing an original foreign trust instrument among the records of a Monaco notary.

Recognition of foreign trusts

Monaco recognizes trusts within the scope of the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition, in force for Monaco since 1 September 2008. Recognition remains subject to the Convention's scope, safeguards and exceptions, including mandatory succession rules, creditor protection, public policy and fiscal powers.

The recognition of an existing foreign-law trust must be distinguished from the constitution or transfer of a trust under Monaco's specific statutory framework.

Recognition does not automatically eliminate local registration, tax, disclosure or other applicable obligations.

Role of trustees

The Monaco framework regulates persons eligible to act as trustees and, where relevant, local representatives.

For trusts within Article 3 of Law No. 214, a trustee not established or domiciled in Monaco must appoint a local representative. This requirement must not be assumed to apply identically to every recognized foreign trust.

Article 3 provides for legal-person trustees drawn from a special list maintained by the First President of the Court of Appeal on the proposal of the Prosecutor General. Natural persons may act as co-trustees or local representatives within the prescribed framework; the article also contains a limited exception for a co-trustee appointed under the selected foreign law to act for that trust alone.

LYNE Advisory does not act as trustee or local representative.

The process should begin with a legal and factual assessment, not with the assumption that every trust can be established in Monaco under identical conditions.

Step 1 — Determine the intended purpose

Identify the assets, beneficiaries, intended governance arrangements and succession objectives.

Step 2 — Assess the relevant legal framework

Qualified legal professionals should establish:

• The settlor's personal law.
• The proposed governing trust law.
• Whether the intended arrangement can be constituted or transferred under Monaco's framework.
• Whether an existing foreign trust is instead being recognized.
• The implications of other relevant jurisdictions.

Step 3 — Identify eligible professional participants

Determine the trustee, any required local representative, legal advisers and other relevant stakeholders.

Verify applicable eligibility and appointment requirements.

Step 4 — Prepare and validate the documentation

Depending on the arrangement, documentation may include:

• Trust instrument.
• Identification of the settlor.
• Trustee identification and eligibility information.
• Beneficiary and protector information.
• Description of trust assets.
• Evidence concerning the governing law.
• Required legal attestation.
• Supporting documents for the relevant Monaco formalities.

This is an indicative preparation framework, not a universal statutory checklist.

Step 5 — Complete the applicable formalities

The relevant legal professionals must coordinate the formal execution, registration, declarations and other formalities required by Monaco law.

Step 6 — Establish ongoing administration

The trustee and other responsible persons must ensure compliance with applicable accounting, recordkeeping, beneficial ownership and reporting requirements.

These stages are an indicative preparation framework, not a guaranteed formation process. Different trusts require different procedures.

Different legal structures may be used to address different ownership, governance and succession objectives.

They should not be treated as interchangeable.

Choosing the appropriate framework

The appropriate structure depends on the intended assets, control arrangements, beneficiaries, legal constraints and cross-border circumstances.

A trust may be relevant to an international succession arrangement, while an SCI or SCP may serve a more direct civil asset-holding purpose.

Foundations operate under separate legal rules and may not be available for every private wealth objective. The foundation column is a cross-jurisdictional comparison; it does not imply that Monaco foundations are available for ordinary private-family wealth purposes.

No structure should be selected without examining the relevant legal and tax consequences.

Explore our guide to SCI and SCP formation in Monaco.

Intergenerational continuity

A trust may provide a framework for administering assets across generations, depending on the governing law and the terms of the arrangement.

It can establish responsibilities for trustees and define the interests of beneficiaries.

Family governance

Complex family arrangements may require clear decision-making processes, reporting expectations and rules concerning the administration of shared assets.

Trust instruments may help formalize certain responsibilities.

International ownership

Where family members, assets and professional advisers are located in different countries, multiple legal and tax systems may apply.

The analysis should consider the location of assets, the tax residence of relevant persons and any applicable succession restrictions.

Business succession

Trusts may sometimes form part of broader arrangements involving family-owned businesses and investment holdings.

However, company governance, transfer restrictions, shareholder agreements and applicable succession law must be considered separately.

Long-term administration

A successful wealth structure requires continuing governance, reliable records and appropriately qualified professional oversight.

The creation of a legal arrangement is only one stage in its lifecycle.

Monaco registration duties

Article 7 of Law No. 214 establishes proportional registration duties for qualifying acts constituting or transferring trusts within Monaco.

The statutory rates are:

Article 7 provides for conversion of the duty into an annual tax of 0.20% where the parties request it in the trust constitution instrument.

These rates do not apply to every foreign trust connected with Monaco.

The annual election is not universally available or necessarily preferable.

Article 7 assesses the duty or annual tax on the total value of assets invested in the trust, except Monegasque securities falling within the separate Article 8 regime. It states that the duty or tax is charged in place of gift or death-transfer duties within this statutory framework. Valuation, the separate securities regime and interactions with other taxes must be assessed by qualified professionals. This is not a general exemption from foreign or property-related taxes.

Article 8 is not an exemption: Monegasque securities within its scope bear reduced proportional duty of 0.05%, 0.25% or 0.45% for one, two or more than two successive beneficiaries respectively. The securities classification and statutory valuation rules require specialist assessment.

The annual tax is payable in advance: the first annuity on registration of the instrument and subsequent annuities within the first ten days of January each year. Professional advice is required before choosing or implementing this election.

Beneficial ownership transparency

For each trust constituted or transferred in Monaco, Article 6-1 requires the trustee and, where the trustee is abroad, its local representative to obtain, retain and continuously update adequate, accurate and current beneficial ownership information and supporting records concerning:

• Settlors.
• Trustees.
• Protectors, where applicable.
• Beneficiaries or classes of beneficiaries.
• Persons exercising ultimate effective control.

The relevant trustee or local representative must maintain the required information and supporting records.

Article 6-1 imposes fifteen-day communication and update requirements on the specified participants and foreign trustees. Article 6-1-1 separately covers information concerning relevant service and advice providers, with its own thirty-day communication requirement. Register filings do not replace the due diligence required under Law No. 1.362, as amended.

Monaco Register of Trusts

Applicable arrangements may trigger registration obligations under Monaco's Register of Trusts.

The precise obligation depends on factors including the trustee's location, the trust's legal status and certain Monaco property or business relationships.

Article 11 covers a Monaco-established or domiciled trustee administering a trust constituted or transferred in Monaco. It also covers trustees or equivalent persons established or domiciled outside the European Union when they acquire Monaco real estate or establish a business relationship in Monaco. The article contains an EU-register evidence mechanism for the circumstances it specifies. Registration and disclosure requirements are not identical for every foreign trust.

Under Sovereign Ordinance No. 8.635, the relevant registration is due within one month of constitution or transfer, or of the qualifying property acquisition or business relationship, according to the applicable category. Changes to registered information must be notified within one month under Article 13 of Law No. 214. The end of the trust or cessation of the registration grounds must also be notified within one month. Access to the register is governed by statutory conditions, not unrestricted public access.

Accounting and recordkeeping

Trusts constituted or transferred in Monaco must keep accounts. Article 5 of Sovereign Ordinance No. 8.635 requires an annual balance sheet showing endowment funds and a profit-and-loss account, with a securities-portfolio valuation where applicable. The balance sheet and profit-and-loss account must be submitted to the Direction du Développement Économique within three months after the financial year-end.

Article 10 requires accounting for trusts constituted or transferred in Monaco. Accounting documents and supporting records must be retained by the trustee, or the local representative of a foreign trustee, for ten years after their involvement ends, at a location in Monaco notified to the competent authority. Article 6-1 prescribes the same ten-year post-involvement retention period for beneficial ownership records.

Cross-border taxation

A trust connected with Monaco may also have tax consequences in jurisdictions where the settlor, trustees, beneficiaries or assets are located.

Potential issues include:

• Income taxation.
• Inheritance and gift taxation.
• Reporting obligations.
• Beneficiary distributions.
• Property-related taxation.
• International disclosure requirements.

Monaco residence or a Monaco connection does not automatically remove tax obligations elsewhere.

This report does not provide individualized tax advice.

Confusing trust recognition with trust constitution

An existing foreign trust and a newly constituted Monaco-connected trust may be subject to different requirements.

Assuming automatic tax efficiency

Tax treatment depends on the applicable legislation, assets and jurisdictions.

Overlooking the governing law

The selected trust law and the settlor's personal law are fundamental to the legal assessment.

Neglecting trustee eligibility

Monaco imposes specific requirements concerning trustees and local representatives in relevant circumstances.

Underestimating transparency obligations

Beneficial ownership, registration and reporting requirements must be assessed from the outset.

Treating the trust instrument as a complete succession strategy

Family governance, tax exposure, ownership restrictions and succession rules may require additional planning.

Failing to coordinate advisers

Complex international arrangements often involve lawyers, trustees, accountants, banks and other professionals.

Effective coordination helps ensure that responsibilities, documents and implementation steps are properly aligned.

Coordinating complex structuring projects in Monaco

Establishing or reorganizing international ownership arrangements often involves several professional disciplines.

LYNE Advisory supports clients by helping organize the strategic and administrative dimensions of their projects and coordinating the relevant stakeholders.

Depending on the engagement, LYNE's role may include:

• Initial assessment of the client's structuring objectives.
• Identification of relevant business and administrative considerations.
• Coordination with qualified Monaco and international legal professionals.
• Liaison with tax advisers, trustees and fiduciary institutions.
• Organization of project documentation.
• Monitoring of implementation milestones.
• Coordination between stakeholders.
• Administrative follow-up within LYNE's authorized advisory scope.

LYNE Advisory does not draft trust instruments as a legal practitioner, act as trustee, provide regulated fiduciary services or deliver legal or tax opinions.