Monaco began transforming its financial center in the early 2000s following a worldwide trend, which has brought on increased fiscal transparency. This evolution both predictable and inevitable, has led to a concentration of banks: their number has been reduced from 45 to 30 so far, but these changes remain a real opportunity for Monaco!
With nearly €115 billion in deposits, Monaco’s financial center is not as well-known as other international locations and hasn’t yet reached its full potential... Wealthy residents usually deposit only a small portion of their assets in Monegasque banks. Therefore, it is crucial to develop management and advisory services in Monaco, including international wealth services.
Customers are getting more and more sophisticated, their expectations are higher, and they demand ever-increasing competence, tailor-made solutions and confidentiality. They seek professional and trusted advice to avoid any conflict of interest.
Wealthy Families can benefit from creating their own Single Family Office (SFO). As for those whose wealth does not exceed €200 million, Multi-family offices (MFO) can constitute an interesting alternative. The MFO structure did not really exist in Monaco until 2017, and for a good reason, there was no law regulating this activity!
The law establishing the activity of Multi Family Offices was voted in December 2016, and the detailed Sovereign Ordinance was published in February 2017. Since then, a dozen MFOs have been created. These MFOs are either new creations, transformations of SFOs or Company Service Providers (CSP).
MFOs were authorized by the State Minister and created under the Monaco “SAM company legal structure”, with an initial minimum capital of 150K€ (no MFO has asked to exercise financial activities so far, requiring a minimum capital of 300K€ and CCAF authorization). The term “Multi Family Office” is now adjoining their name, as an authorized label strictly for MFOs.
In order to guarantee the independence of Multi-Family Offices and the absence of conflicts of interest, they will not be able to receive any compensation other than from their clients. They may not be majority-held by a bank or an asset management company (portfolio and/ or fund manager) either. An MFO acts, as a single point of contact for its clients, and in their exclusive and best interests. They can provide a range of both financial and non-financial services.
We hope that the large number of wealthy residents in Monaco, will induce the creation of new MFOs in the principality and encourage some Single Family Offices (Monaco has a large number of SFOs) to turn into MFOs in order to provide their services to other families as well. The expansion of MFOs can also be an additional attraction for some families to move to Monaco!
Finally, the creation of MFOs will benefit many local professionals especially banks and management companies, since MFOs typically subcontract numerous services on behalf of their clients… They should not be seen as competitors but rather as partners of other financial institutions!
