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Monaco Financial Overhaul: New Laws Aim to Boost Transparency and Protection

Strengthening the Financial Sector and Attracting Foreign Investment

In a bid to strengthen its financial sector and attract foreign investment, the Principality of Monaco has introduced a raft of new laws aimed at boosting transparency and protection. The latest reforms come into force on January 7, 2022.

Restrictions on Cross-Border Solicitation Rules

Making it more difficult for non-Monegasque licensed entities to offer services and products to local investors
Onshore solicitation for licensed entities is restricted, requiring prior approval from the Monaco Commission de Contrôle des Activités Financières (CCAF)

Harmonizing Financial Regulations with the European Union

The new laws are part of a broader effort to harmonize Monaco’s financial regulations with those of the European Union, and will facilitate data transfers between Monegasque companies and their EU counterparts.

In December 2021, the Monegasque Parliament presented a new data protection bill, aimed at bringing Monaco’s data protection regime in line with the EU General Data Protection Regulation (GDPR). The bill introduces an accountability system, replacing current notification and authorization requirements, and gives the Monaco Data Protection Authority greater powers of control and sanction.

AML and Anti-Corruption Laws

Monaco has long been a leader in anti-money laundering (AML) and anti-corruption efforts, with strong administrative and criminal sanctions in place. The Principality is a member of MONEYVAL, the permanent monitoring AML body of the Council of Europe, and implemented the EU 5th AML Directive in December 2020.

E-Commerce and Digital Projects

Monaco has been at the forefront of digital innovation, with widespread adoption of 4G and 5G networks. The Principality has also introduced regulations for token offerings, cementing its position as an attractive financial centre.

Other Monaco Specificities

Investors should be aware of several specificities in Monegasque law, including:
- Restrictions on sole shareholder companies
- Requirements for directors to hold company shares
- Strict rules governing share sales
Foreign investment rules have also been updated recently, following changes to French law

Conclusion

As Monaco continues to evolve as a financial hub, these new laws aim to provide greater transparency, protection, and stability for investors and businesses operating in the Principality.