Getting a License
ACPR is the sole authority entrusted with issuing banking licenses to lending establishments in the state of Monaco. To get a banking license, a potential applicant must:
- have 5 million euros
- have technical & financial resources
- ensure transparency of data pertain to investors’ status & identity
- make sure that their entity’s representatives have the required knowledge, experience & qualifications
Upon receiving an application, ACPR has six months to either grant or deny a license. ACPR may revoke a license if licensing requirements aren’t met, a license hasn’t been used for 1 year, or no activities have been undertaken by a licensee within the last 6 months.
Obtaining a license is required for the following activities:
- managing assets, futures & securities
- managing investment & mutual funds
- acceptance and transfer of orders to 3rd parties
- assisting in the management of assets
- managing non-domestic investment funds
Basic Requirements
Obtaining a license authorizing provision of financial services in the Principality of Monaco requires establishing an LLC company. Registering an LLC in the Principality of Monaco is possible if the government grants its permission.
AML
In the Principality of Monaco, all offenses related to money laundering entail a term of imprisonment of up to ten years. If a grave violation is committed, the State Minister can:
- impose a reprimand
- impose a fine
- impose a ban on certain operations
- suspend or revoke a license
Protecting Consumers in Monaco
In the Principality of Monaco, banking institutions are responsible for warning their clients about possible risks associated with their transactions. Before signing an agreement, banking establishments must look into the goals & financial situation of their clients.
Foreign Exchange
The Principality has no controls over foreign exchange operations. Persons coming into/exiting the Principality & owning cash or securities exceeding ten thousand euros must have an import-export permit. No limitations are imposed on operations involving withdrawal of cash. As far as cash transactions are concerned, banking establishments must ensure that proper information is received, locate a source of transactions & look into the funds’ origin.
Privacy
The personnel & senior management of banking establishments must abide by rules of professional secrecy. Failure to observe the rules can be punishable by a prison term or fine.
Privacy Exceptions & Limitations
Financial regulators or government agencies conducting criminal investigations are allowed to request any information pertaining to their investigation. Violating secrecy is punishable by a prison term of up to twelve months & a fine of up to eighteen thousand euros.
International Banking
There’s no license enabling non-domestic organizations to engage in international services. Foreign banks seeking to work in the Principality must apply for a CCAF or ACPR license.
Conclusion
Monaco’s banking sector was greatly impacted by the recent amendments to an agreement on currency signed between the Principality & EU. And the same goes for the Association Agreement signed between the two states. Currently, a bill introducing blockchain technology is being considered by the Principality’s government. If passed, the bill will lay a groundwork for the implementation of blockchain technology in the banking sector.
Considering registering an LLC in the state of Monaco? Thinking of setting up a trust company in France? Need to apply for a license authorizing lending operations in the EU? IQ Decision UK can give you a hand with all that and more.
