Michel Dotta is the chairman of the Monaco Economic Board (MEB). He started his career in 1975 with the Monaco
property firm Dotta Immobilier, now one of the largest in Monaco. Dotta is also President of the Monaco Real Estate Chamber. In our interview with him he explains why Family Offices would benefit by being located in Monaco.
What does Monaco Invest do?
First I need to explain who we are. The MONACO ECONOMIC BOARD (MEB) promotes economic activity in the Principality and actively contributes to its development. It has two departments: Monaco Chamber of Commerce and Monaco Invest. MONACO CHAMBER OF COMMERCE supports the development of Monaco companies on a local and international level by organising activities and offering them a range of services. MONACO INVEST seeks and supports foreign business organisations to set up in the Principality. This entity targets individuals who will settle in Monaco and set up a business here. An important aspect of Monaco Invest’s role is to work closely with the Monaco Government, and in particular Monaco Welcome, to assist newcomers with the setting up process.
Why invest in Monaco?
Monaco is a dynamic platform. GDP is at €5.64 billion with growth of 5.4%. GDP per capita is at €69,000 and is one of the highest in the world. GDP per employee is at €109,000. Monaco boasts a highly skilled workforce with 52,000 jobs and 5,000 companies operating in added-value nonpolluting sectors. Its economy is balanced and diversified thanks to the vision of a succession of Princes of Monaco. It is a key factor in our prosperity and enables us to deal better with crises. For example, finance and insurance represents 16.8% of GDP; scientific & technical activities, administrative and support services (corporate) 14.9%; construction 12.7%; hospitality and retail 12.5%; international trade 9.6%; real estate 8.7%; administration, education, health and social welfare 7.2%; industry 4.9%; personal services 4.7% ; information communication (mainly ICT) 4.4%; and finally transport/storage 3.5%. I would also like to underline how important yachting is in Monaco. With more than 300 companies, 1,500 employees the sector represents nearly 5% of Gross Domestic Product (GDP) of Monaco and is the fourth largest industry in the
Monaco is a must for the enthusiasts of the yachting sector; here is an intriguing fact – out of the 100 largest owners of the world 24 are members of the Yacht Club of Monaco. Its model is sustainable due in part to the fact it is a debt-free economy with reserve funds equal to four years of state expenditure (two in liquid assets) and a balanced budget (€1 billion) of which 30% on average has been invested in infrastructure and amenities over the last 50 years.
Monaco also enjoys unrivalled political stability (seven centuries), but also social and fiscal (which is not to say there is no tax – indirect rather than direct taxation is the favoured route. VAT is at 20% and represents 50% of state revenue). The balance we have between a free-market economy and the social welfare of our people is unique. With regards
to fiscal transparency and cooperation, Monaco has a structure in place to combat money laundering and terrorism financing unanimously recognised by international bodies like GAFI and the OCDE. Major projects (for example, the sea extension) comply with environmental restrictions to meet the growing needs of residents and investors. More
generally, our policy promotes renewable energy and sustainable mobility, the goal being to cut emissions by 50% by 2030 and be carbon neutral by 2050. Ours is an international business environment where 130 nationalities comprise an extensive and accessible business network on 2km2 that is very accessible. The location is ideal, located near
Nice Côte d’Azur International Airport, the second busiest hub for business aviation. Being situated in the heart of the
Mediterranean basin and part of the Euro Zone, Monaco is a gateway to Africa, and has international influence abroad through an extensive diplomatic and consular corps. The quality of life is unique and it is not just about the mild climate and strategic location between sea and mountains. Monaco is also a multi-cultural place where 38,000 inhabitants from 130 nationalities live in harmony, enjoy a maximum level of security (1 policeman per 70 residents and a highly effective CCTV system), excellent health care and education systems, and a packed cultural and social calendar of international events (700 a year). And finally, 25% of the country is green spaces and 30% of electricity is green – ecology is second nature.
What measures are in place to attract Monaco to Family Offices and investors?
The Principality of Monaco is an alternative and attractive solution to the political and financial incertitude caused by Brexit, the upcoming French, German and Italian elections, and the result from the US elections. A haven of stability, growth and economic diversity, Monaco has been offering its residents a stable and secure lifestyle for decades. For
businesses wishing to trade with local and international companies, Monaco represents a debt free fiscal platform with high level digital security in an international and cosmopolitan setting. Moreover, in today’s world, providing privacy and security is now a major challenge and Monaco has the infrastructure to deliver the highest standard for businesses who are considering relocation. With such advantages and credentials, and the added benefit of being surrounded by the yachting lifestyle, it is not surprising that Monaco is becoming a new destination for Family Offices and UHNWI at
a time when Europe is on the verge of splitting and there is widespread business incertitude. I will, however, also speak of one specific and very recent measure concerning a change to the Principality’s law for Multi Family Offices (MFO)
that reflects the desire to attract family offices to Monaco. The proposed law on the operation of Multi Family Offices was changed at the end of the 2015 regulatory deadline and was voted in the Upper Chamber on 29 November 2016
This bill allows quality wealth management services to be offered to customers who are resident in Monaco or abroad.
The purpose of this bill is to recognise the existence and regulate the exercising of the activity of Multi Family Offices, defined in this bill as a professional activity consisting of “providing advice and services of a wealth management and financial nature to natural persons, families, or legal entities belonging to natural persons or families or of which
they are founders or beneficiaries”. The bill subjects the carrying out of this profession to a set of strict rules to ensure high level protection for the customers of these Multi Family Offices. A MFO is subject to the Minister of State
issuing prior authorisation, as well as approval by the Financial Activities Control Commission if it performs financial activities. Moreover, its professionals are subject to professional secrecy. Given the entity of the financial stakes, the bill obliges professionals to use a corporate form which provides guarantees of stability and performance, and thus to set up Monegasque public limited companies with a €300,000 minimum capital if the MFO offers financial services but only €150,000 if not. Note that in no case may a bank or management company be a majority shareholder. Finally, a MFO may not manage portfolios – in order to avoid any conflicts of interest by being judge and defendant – but solely provide advice and order transmission. They are paid exclusively by their customers, as independence must prevail. This prohibits any retrocession of providers. It is a guarantee of safety and seriousness for customers. Absolutely, they may encourage new residents to come to Monaco. The profession is very appropriate for the Monegasque financial centre and will incite people to take up residence and use Monegasque providers. All professions will benefit, banks included. The MFO needs to become a true label, a symbol of independence, expertise and safety.
What kind of investors is Monaco looking for?
First of all, as you know, space is an issue in Monaco so we are targeting companies who may not need much space to develop but who need talents, modern infrastructures and an international hub for their business. Secondly, we are looking to attract investors, entrepreneurs in the fields of innovation, new technologies and sustainable development as we believe these are vital fields in the years to come combined with the sectors which already have depth
and strength such as finance & insurance, corporate services, hospitality and retail, real estate and construction, and international trade. Are there any projects you are working on that may trigger further interest? The sea extension which is a huge project that began work this year will change the image of the Principality with the creation of 60,000sqm of luxury real estate for residential as well as some commercial usage. There will also be a mini harbour
for 40 yachts. The SBM project One Monte-Carlo will also change the face of Monte Carlo with over 4,500sqm
that will be dedicated to luxury boutiques and 2,500sqm to office space. This will enhance business tourism that already represents over 30% of tourism revenues. Finally, one must also remember that the Principality of Monaco invests over 30% of its budget every year (and has done so for over half a century) in infrastructure which participates
enormously in the dynamism of this city-state.
What does the future hold for Monaco?
The Government has always taken the necessary measures to ensure that Monaco is a land for entrepreneurs. Major projects that are underway will further develop and optimise the flow of people in and out of the Principality, by air, sea, road or rail. The sea extension, acquiring a stake in Nice-Côte d’Azur International Airport, purchasing the Ventimiglia Port infrastructure, buying train carriages, building the Albert II descending tunnel – not forgetting the new hospital or the SBM’s new shareholders, the project to refurbish the Hôtel de Paris and create seven new mixed-use high-end buildings creating a new district in Monte-Carlo… They seem to me of the nature to attract new residents and promote growth of companies in Monaco. I should add that our financial sector is doing well and continues to grow, notably with the arrival of Family Offices that, as I said above, we are actively promoting.
Monaco Statistics – Figures for 2015
Monaco For Finance – 18th November 2016 – T. Crovetto interview