Business assets, lease rights or a temporary lease in Monaco: what is the difference?

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Illustration of Monaco-inspired shops and commercial premises, with keys in the foreground

When setting up a business in Monaco, you may buy an existing business’s assets, acquire the rights under a lease or rent premises temporarily. These options involve different acquisitions and levels of protection. Here are the key distinctions to understand before committing.

Why do these concepts exist?

A trader builds a customer base, a reputation and an operating organisation with a value separate from the building. The French-law concept of a fonds de commerce recognises this business asset package and allows it to be transferred. Historically, France’s Act of 17 March 1909 regulated its sale and use as security; the Act of 30 June 1926 strengthened commercial tenants’ protection. These historical French milestones are not the rules applicable in Monaco.

In Monaco, commercial lease protection is governed notably by Act No. 490 of 24 November 1948, as amended. Its purpose is to protect, subject to conditions, the value created by the operator against the consequences of losing the business location.

Fonds de commerce: acquiring an existing business’s assets

A fonds de commerce comprises assets organised around a customer base. Depending on the transaction, it may include the trading name, signage, equipment, fixtures and lease rights. Stock and the exact assets transferred must be specified in the agreement.

Buying a shop’s fonds de commerce with its customers and fittings allows you to take over an existing operation. It does not mean buying the premises or the shares in the company operating the business. You may own the business assets while remaining a tenant of the premises.

Droit au bail: taking over a location and a lease

Acquiring a droit au bail means taking over the tenant’s rights and obligations under an existing lease, subject to the applicable conditions. Its appeal may lie in the location, visibility, rent, remaining term and permitted activities.

The assignment price is paid to the outgoing tenant; rent remains payable to the landlord. The customer base and trading name are not necessarily included. Check the assignment clauses and required consents: acquiring lease rights does not automatically permit every type of business.

What protection does a commercial tenant have?

Act No. 490 governs renewal of leases of premises where a business has been operated for at least three consecutive years, subject to the other legal requirements. Where the regime applies, the tenant may benefit from renewal or, in the circumstances provided by law, compensation for non-renewal.

This protection is not absolute: exceptions exist, notably where serious and legitimate grounds are established. Compensation addresses the loss suffered and depends, in particular, on whether the business is lost or can be relocated. It does not automatically equal the acquisition price. Nor does protection confer ownership of the building or freeze the rent permanently.

Bail précaire: temporary occupation

The term bail précaire appears in Monaco listings for short lettings, including terms of 33 months. However, a short lease and a precarious occupation agreement are not necessarily the same legal arrangement.

This option may suit a trial project, but the occupier should not assume a right to renewal or compensation on departure. The contract’s title is not decisive: the actual conditions, operating period and successive agreements matter. As Act No. 490 contains mandatory provisions, a court may classify the arrangement differently. Occupation of public-domain property is subject to specific rules.

Before funding substantial works, check the term, departure provisions and what happens to the improvements.

Changing the business activity: déspécialisation

The lease defines the permitted activities. If your project falls outside them, secure the landlord’s consent and, where necessary, an amendment. This change is commonly called déspécialisation.

A payment to the landlord may be negotiated, alongside changes to rent or other terms. It is neither an automatic tax nor a uniform statutory percentage of the assignment price. Any amount depends on the contract and agreement reached; the parties may also agree that no payment is due. Monaco case law refers to assignments conditional on consent to the new activity without a déspécialisation payment.

The landlord’s consent does not replace the necessary administrative authorisations or declarations. Also check compatibility with the building and proposed works.

Option	What you acquire	Key point
Fonds de commerce	An operation and agreed assets organised around a customer base	Check the business, lease and scope of the sale
Droit au bail	The tenant’s position under an existing lease	Check assignment rules and permitted activities
Temporary or precarious letting	Temporary occupation according to the contract and its legal classification	Plan for departure and recovery of fit-out costs

What costs should you budget for?

Compare the business asset or lease assignment price, any payment for a change of activity, rent, charges, security deposit, works, professional fees and applicable formalities. If lease rights are included in the business asset purchase, do not count them twice.

Before signing, specify the essential conditions: permitted activity, landlord consent where required and a maximum cost for changing the activity.

Your commercial property project in Monaco

Monaco Properties helps you find businesses, lease rights and commercial premises in Monaco, working alongside your advisers on legal and administrative matters. Contact our team to discuss your project.

General information checked on 3 October 2026; each contract and situation requires individual assessment.