Bank account in Monaco - documents - tax return

[AndyN]

Hi,
I read on some websites that banks in Monaco require their prospective clients to provide tax returns for the previous 2 years from their home jurisdiction to open a bank account which is one of the conditions for Monegasque tax residence.
Which banks, if any, do not have this requirement?
How can they verify a tax return that a client provides?

 

[Martin Everson]

which is one of the conditions for Monegasque tax residence.

Choose one of the other 3 options left then. The Monaco bank reference option is a mafia racket to extort you into investing with bank.

Which banks, if any, do not have this requirement?

Maybe try Banque Havilland....lol. Some ppl will get that joke.

How can they verify a tax return that a client provides?

They can't. It's just a paperwork excercise as part of KYC to show they have done some due diligence in ensuring money is not undelcared money. Naturally if your not a non-dom or your funds your bringing to bank do not agree with your tax return they will simply ask you to explain how the funds were acquired.

 

[AndyN]

What other 3 options do you have in mind? I thought that it is a must to have a reference letter from a Monegasque bank.

 

[Konstanz]

In reality there are no "other ways" if you don't have connection with a country already like Monaco resident or Monagesque girlfriend / wife or real business in Monaco.
You cannot set-up company in Monaco if you are not Monaco residents. This is how it works.
The only way for newcomers is Monaco bank reference letter. And now they require at least minimum of 1m EUR depending on your 'profile'. The official minimum 500k is very rarely accepted.
There are many banks in Monaco. You can try maybe not all require 'tax declarations'.

 

[Sols]

Monaco is the way it is because they only accept wealthy residents who can explain where their money comes from. It doesn't have to be a good explanation and it doesn't have to be the whole explanation, as long as enough of your wealth has a nice, clean source that you can comfortably put a few million with banks there and not cause any problem.

They can almost never verify the tax statements. All they can do is look for any obvious signs of manipulation/falsifications. But that's also all they have to do to meet their regulatory obligations.

If you cannot provide tax returns and bank references, Monaco is not the right place for you.

 

[troubled soul]

Monaco only make sense whey you have net worth at least $10 million , otherwise you are wasting your time.
Look at the Renting price. They are crazy high for small studio

 

[Konstanz]

Monaco only make sense whey you have net worth at least $10 million , otherwise you are wasting your time.
Look at the Renting price. They are crazy high for small studio

You don't need net worth $10 million.
You can rent studio /1bed lets say for 2-5k/month. and put 1-2m in bank account as investment.
Yes rent is quite expensive, but not over the top. Also quality of buildings are nice in Monaco. It's also very safe.
I don't think central London is cheaper..
About the bank deposit I can say the same with Swiss banks. You need also 1-2m to open good swiss bank account. So, Monaco makes sense in this way very much.
Of course, the best part is income tax 0% , no wealth or capital gain tax.. and you remain in Europe.

 

[Martin Everson]

What other 3 options do you have in mind? I thought that it is a must to have a reference letter from a Monegasque bank.

No.

---

Sufficient financial resources, by means of:

• A salary; or
• Professional income (independent commercial activity or through a company); or
• Sufficient savings (the sum which is judged sufficient depends on the banking establishment in Monaco providing the reference); or
• Being supported by a relative, spouse or partner with whom you are living as a couple

-----

Monaco is very selective if your not coming as a worker or business person. It's a damn beauty pageant in the end. The banks I approached won't give a reference cause you deposited i.e 500k or even 2m. BNP Paribas wanted me to put a minimum of 3m euros but reference was not on the table. Barclays are even more greedy and wanted when it came down to it north of 10m invested in products that will yield them 2% per annum i.e 200k in annual fees to them. Forget the 5m they said was minimum. Maybe covid turmoil has changed their attitude but I doubt it.

You can rent studio /1bed lets say for 2-5k/month.

You need to read fine print and be careful here by calling landlord. A lot of these properties in this price range fall under Law 887. In which case the tenant must be:

• A tenant of Monegasque nationality
• A tenant domiciled in Monaco for more than five years and who has been working there for more than six months.
• A tenant who has been working for more than five years.

However there are cheap shoebox's to be found there but expect foreigner discrimination.

 

[Konstanz]

Yes, it's true there are laws who prefer residents and nationals, but for 5k EUR/month you can get pretty decent apartment.
In cities like London, Paris, New York you don't get magic for 5k either

 

[Praetorian]

No.

---

Sufficient financial resources, by means of:

• A salary; or
• Professional income (independent commercial activity or through a company); or
• Sufficient savings (the sum which is judged sufficient depends on the banking establishment in Monaco providing the reference); or
• Being supported by a relative, spouse or partner with whom you are living as a couple

-----

Monaco is very selective if your not coming as a worker or business person. It's a damn beauty pageant in the end. The banks I approached won't give a reference cause you deposited i.e 500k or even 2m. BNP Paribas wanted me to put a minimum of 3m euros but reference was not on the table. Barclays are even more greedy and wanted when it came down to it north of 10m invested in products that will yield them 2% per annum i.e 200k in annual fees to them. Forget the 5m they said was minimum. Maybe covid turmoil has changed their attitude but I doubt it.



You need to read fine print and be careful here by calling landlord. A lot of these properties in this price range fall under Law 887. In which case the tenant must be:

• A tenant of Monegasque nationality
• A tenant domiciled in Monaco for more than five years and who has been working there for more than six months.
• A tenant who has been working for more than five years.

However there are cheap shoebox's to be found there but expect foreigner discrimination.

Locals (Citizens) live in government sponsored apartment buildings where the rent is minimal (Usually not more than 1000-1500 euros a month). They dont have to worry about rent and cost of living as much since most work for the public sector and have tons of perks to begin with.

These shoebox apartments usually don't discriminate against foreigners because no one else will rent them to begin with.

About OP, i can't count the amount of sketchy people i know who maintain bank accounts in Monaco, from literal mobsters to sons of corrupt dictators with embezzled money. You don't need to prove your money is "clean", you just need a convincing story and nothing that raises clear suspicions that the money was acquired in an illegal manner. Most of those banks just play the usual KYC/We arent crooks book but will look the other way if you bring in enough money as long as its not blatantly dirty.

Compagnie Monégasque de Banque was known to be open minded a few years back and they usually asked between 1-2m in deposits to open the accounts.

 

[AndyN]

I am coming to a conclusion that Monaco is well overrated. First, I would not feel good living in an apartment as there are literally no detached houses there. Second, it is an overcrowded, loud, one big construction site full of flashy and dodgy people I do not want to be surrounded with. Third, I would not feel good paying for massively overvalued property, rented or owned. Finally, I would not feel good about the bank being fussy as to the deposit amount and the fact it would have to be frozen in their investment products which will probably only lose value, mostly due to the fees their charge. So thanks, Prince Albert, but no thanks.
I was also considering Isle of Man or Jersey where you can get a palace and lots of space, lovely nature and peace for £3-5m but the personal income tax will be at best capped to below £200k per year. So that is a compromise as everything in life.

 

[Konstanz]

I am coming to a conclusion that Monaco is well overrated. First, I would not feel good living in an apartment as there are literally no detached houses there. Second, it is an overcrowded, loud, one big construction site full of flashy and dodgy people I do not want to be surrounded with. Third, I would not feel good paying for massively overvalued property, rented or owned. Finally, I would not feel good about the bank being fussy as to the deposit amount and the fact it would have to be frozen in their investment products which will probably only lose value, mostly due to the fees their charge. So thanks, Prince Albert, but no thanks.
I was also considering Isle of Man or Jersey where you can get a palace and lots of space, lovely nature and peace for £3-5m but the personal income tax will be at best capped to below £200k per year. So that is a compromise as everything in life.

You don't have to stay in Monaco all the time. Most of residents have villas in nearby France or Italy and spend much time there. Actually, people move in/out everyday.
Isle of Man / Jersey are remote islands. Climate is very bad there, raining , windy and cold most time of year. You cannot really compare Monaco which is in Metropolitan France with Isle of Man.

 

[AndyN]

I see. So that must mean that the super-rich give someone their bank card to make daily shopping in Monaco as this is supposedly required by tax authorities as evidence to issue a certificate of tax residence. Meanwhile, they are spending most of their time on a yacht or in a villa in France. I knew they would not be happy living in those flats. Is that how this really works?

 

[Konstanz]

I see. So that must mean that the super-rich give someone their bank card to make daily shopping in Monaco as this is supposedly required by tax authorities as evidence to issue a certificate of tax residence. Meanwhile, they are spending most of their time on a yacht or in a villa in France. I knew they would not be happy living in those flats. Is that how this really works?

Not necessary. Some people have good apartments in Monaco and spend most time in Monaco and use other house just for weekends or Holiday.
This is the beauty of location. You can have quality life.

 

[Martin Everson]

These shoebox apartments usually don't discriminate against foreigners because no one else will rent them to begin with.

Not true. You have never tried to rent an apartment in Monaco I guess. And you do need to check if the apartment falls under Law 887 to avoid disappointment with the shoebox you found.

You don't need to prove your money is "clean", you just need a convincing story and nothing that raises clear suspicions that the money was acquired in an illegal manner. Most of those banks just play the usual KYC/We arent crooks book but will look the other way if you bring in enough money as long as its not blatantly dirty.

This is certainly not the case since many years. You do need to prove your money is clean. The banks like in Andorra and Switzerland etc went the opposite way with a white money policy. Banks with dirty undeclared funds like HSBC and CS etc all closed operations in the principality some years ago and sold their assets off. You got next to none of old guard remaining.

I was also considering Isle of Man or Jersey where you can get a palace and lots of space, lovely nature and peace for £3-5m but the personal income tax will be at best capped to below £200k per year. So that is a compromise as everything in life.

Forget Jersey. I talked about the reality of residency in Jersey in 2020 in this post here. I post below again for your reference. They are protectionist states.

For example with Jersey there are restrictions on where you can live and what you can do for work in Jersey. You need to have lived on the island for 5 years before you can start your own business and work for yourself unless you apply for a special business license that has a special permission which allows you to do so. The license is granted against a strict criteria with the main one being 'economic value' of the business you are starting to the island. This includes amongst other thing income of the business owner. It also includes local job creation and the level of those jobs and the wider benefit to the island such as community engagement, Corporate social responsibility and forced use of local firms for professional services. To even get a license it is expected you offer a salary level for any full time employee in excess of £72,000 per annum. You are also not allowed to buy property in Jersey unless you have lived there for 10 years or you have licensed permission attached to your business license. The license permission if you do get it in end is only valid for 3 years and can only be renewed if you met the agreed criteria of the business plan you submitted. There are other schemes for residency for digital sector but as I said avoid this BS.

So I repeat do your research before looking at any channel island as they are protectionist states. If you have done your research on Isle of Man and you found no crazy hidden restrictions like the above then all is good. Move there freely. But if you don't do research and find out about restrictions later then its your own fault.

 

[AndyN]

@Martin Everson My goodness, you really know your staff. Do you offer services regarding offshore to people with cases like mine?

Could you also share your thoughts on what I found on the web, please?

1. Monaco tax: tax certificate

"In practice, the tax authorities usually determine an individual’s residence for tax purposes by examining their bank account statements. The method used is as follows: a debit transaction in a State implies a day spent in that country."

AND

2. https://cms.law/en/mco/publication/...ficate-one-year-later-it-s-time-to-take-stock

"In practice, the proof of residence that must be provided to obtain this certificate of residence for tax purposes deserves special attention, especially if you have a secondary residence in a neighbouring town.

In the case mentioned just above, we note that the Monegasque Administration generally wishes to obtain additional documents to ensure that the applicant's actual residence is not located in a neighbouring town.

In such a situation, the Administration have requested documents such as electricity bills for a dwelling designated as a secondary residence by the applicants, or bank statements from the applicants."

I do not get how seeing bills for the secondary residence in neighbouring town would help them establish that your residence is not there but in Monaco.

In other words, will renting in Monaco + owning just outside Monaco + doing your daily shopping and spending in Monaco work?

 

[Konstanz]

@Martin Everson My goodness, you really know your staff. Do you offer services regarding offshore to people with cases like mine?

Could you also share your thoughts on what I found on the web, please?

1. Monaco tax: tax certificate

"In practice, the tax authorities usually determine an individual’s residence for tax purposes by examining their bank account statements. The method used is as follows: a debit transaction in a State implies a day spent in that country."

AND

2. https://cms.law/en/mco/publication/...ficate-one-year-later-it-s-time-to-take-stock

"In practice, the proof of residence that must be provided to obtain this certificate of residence for tax purposes deserves special attention, especially if you have a secondary residence in a neighbouring town.

In the case mentioned just above, we note that the Monegasque Administration generally wishes to obtain additional documents to ensure that the applicant's actual residence is not located in a neighbouring town.

In such a situation, the Administration have requested documents such as electricity bills for a dwelling designated as a secondary residence by the applicants, or bank statements from the applicants."

I do not get how seeing bills for the secondary residence in neighbouring town would help them establish that your residence is not there but in Monaco.

In other words, will renting in Monaco + owning just outside Monaco + doing your daily shopping and spending in Monaco work?

Most important thing is to use your Monaco bank card to pay in Monaco.
This way they will see that you live in Monaco

 

[Martin Everson]

@Martin Everson My goodness, you really know your staff. Do you offer services regarding offshore to people with cases like mine?

No but I do try and answer questions if posted here and also of a more candid nature in Mentor Group.

Could you also share your thoughts on what I found on the web, please?

Yes this is very accurate the links you posted. Glad you found them.

I do not get how seeing bills for the secondary residence in neighbouring town would help them establish that your residence is not there but in Monaco.

They want and need to filter out cross border residents claiming Monaco as residency but spending more time in France or elsewhere. In Monaco you can literally walk up a street and be in France where you can live stealth in much bigger accommodation. Monaco has an obligation to weed out such cheats. The banks and Monaco itself have no interest in tax cheats since many years.

Cases like the below damages Monaco's cause. Where people claim fake residency in Monaco and can tarnish Monaco's image. Monaco caters to the global 0.1% and does not need tax cheats.

Prakash Hinduja faces tax troubles worth $137 mn in Switzerland, assets to be freezed

Under its law, Swiss citizen Hinduja is entitled to a presumption of innocence.

economictimes.indiatimes.com

 

[AndyN]

So, is renting an apartment in Monaco, spending nights at a home outside Monaco and travelling in and out of Monaco every day for more than 183 days in a year, cheating? I want to obey their rules - if they say that the day when you arrive and leave count as a day spent in Monaco then there should not be a problem, I suppose?

 

[Konstanz]

So, is renting an apartment in Monaco, spending nights at a home outside Monaco and travelling in and out of Monaco every day for more than 183 days in a year, cheating? I want to obey their rules - if they say that the day when you arrive and leave count as a day spent in Monaco then there should not be a problem, I suppose?

Why you need this? Monaco has to offer much better quality apartments than in nearby France. Of course, it's more expensive, but much better. It's only different if you plan to have nice Villa outside Monaco.
But as I said. People move in and out. Monaco residents spend much time in Monaco even if they have property outside Monaco.
If you have money it is better idea to put it into Monaco real estate than French. Monaco real estate is always going just up, because of lack of tax.
In France you have to pay real estate taxes. In Monaco is 0.
My advice. Try to live in Monaco. If you don't like it there, no point even thinking about France.
You can find all properties here:

Real Estate Monaco | Properties for sale and for rent | La Chambre Immobilière

The Monaco Real Estate Chamber is the official representative of real estate professionals in Monaco. Discover our properties for sale and for rent.

www.chambre-immo.monte-carlo.mc

Just look what Monaco can offer and compare it to French nearby cities like Beausoleil:
seloger.com
You will clearly see that Monaco is way more luxurious properties.
Mostly just cleaners and workers live around Monaco, unless you have luxury villa
If you don't like Monaco or don't like to live in Monaco, I don't think this place is for you