MONACO Trends and Developments Contributed by: Rémi Delforge, Vincent de Bonnafos, Ambre Bernat, Mariam Hakobian and Nicolas Paredes, DL Corporate & Regulatory
M&A transactions in such sectors benefit from more flexibility and shorter timing constraints, without a need for conditions precedent linked to regulatory approvals or clearances. 2.2 Monaco structuring issues There are many options for how to structure M&A trans - actions, whether as share or asset deals, including spin-offs, asset contributions in exchange for shares, referrals or other types of agreement. These options can be mixed and tailored to suit specific objectives in terms of costs (in particular, human resources and tax costs), timing and corporate requirements. Each option impacts employment (transfer of employment contracts and benefits harmonisation), client relation - ships (whether client contracts are transferred or not), privacy, professional secrecy, marketing issues, con - trols, reporting, tax status, consolidation and account - ing. Our role as lawyers is to evaluate all these aspects to determine and select the best option to meet the transaction objectives. Two points of attention regularly come up in the pre- deal discussions: 2.2.1 Branch vs affiliate – continuation We have witnessed a trend, especially for banks in Monaco, to set up as branches rather than affili - ates, in particular for purposes of capital adequacy requirements. From a client’s viewpoint, a branch may appear to be less independent and to have less “local content” than a Monaco subsidiary. In past years and though not a legal requirement, the authorities of the Principality clearly favoured the structure of a Monaco entity as opposed to a local branch of a foreign com - pany or bank. More recently, due to the alignment of Monaco with EU and international standards, the pref - erence for local entities has faded. We have also worked on several projects to re-reg - ister Monaco branches of foreign companies under a head office in a different jurisdiction. Even if there is no specific company “continuation” procedure in Monaco enabling a company to transfer to or from another jurisdiction, these cross-border restructurings at parent company level are possible and will have equivalent effects on Monegasque entities, which can maintain their corporate personality.
2.2.2 TUP – simplified merger We were the first in the Principality to introduce the transmission universelle de patrimoine (TUP) type of simplified merger, which is now a common option by which to transfer all assets and liabilities from one company to another without dissolution. This allows for a quicker and simplified transfer com - pared to other forms of merger or asset sale. In such a simplified merger, the target company’s assets and liabilities are transferred to the absorbing company without the need to individually transfer each asset or liability. 2.3 Is it difficult to enter the Monaco market? Entering the Monaco market can be challenging. Establishing a company can take several months, depending on the sector of activity. To help overcome such challenges, a new law on the “modernisation of company law” was adopted in April 2025 with a view to simplifying corporate formalities, increasing flex - ibility and reducing government administrative delays. Nevertheless, the government still imposes strict requirements upon companies with non-Monegasque shareholders. New incorporations, acquisitions and changes of control in certain cases are subject to prior approval from the Monaco authorities. The application must meet certain criteria to obtain the necessary per - mits. Additionally, the Monaco market and the legal/ corporate framework are not particularly designed to accommodate young or start-up companies, but we can expect some positive evolutions in the coming years. The corporate and regulatory regime in Monaco tends to favour established businesses with proven financial stability and solid track records. 2.3.1 Required approvals for all commercial entities In order to carry on a commercial, industrial or profes - sional activity in Monaco, non-Monegasque nationals require a business authorisation issued by the Minister of State. Authorisations are granted in particular on the basis of the following criteria: • experience and reputation: professional “fit and proper” tests are carried out on the acquiring company, its management team and the potential
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