Why Choose an SCI Instead of Direct Property Ownership?
2024-07-01
SCI or direct ownership?
In the dynamic landscape of the Monegasque real estate market, savvy investors are looking for strategic ways to optimise asset management and minimise tax liabilities. In this context, the creation of a real estate company (SCI) appears to be a beacon of opportunities, offering unparalleled advantages for local and international investors.
Monaco Properties, your trusted partner in the Monegasque real estate journey, is ready to guide you through the intricacies of setting up an SCI, opening up a world of possibilities for your investment projects. When embarking on a real estate purchase project involving several individuals, opting for a Société Civile Immobilière (SCI) can offer significant advantages over direct ownership. Here's why:
Overcoming the challenges of joint ownership
The creation of an SCI is interesting when it is a real estate purchase project between several people. This legal form makes it possible to overcome the difficulties that could be linked to a joint real estate purchase. The manager is able to make decisions even in the event of disagreement between the partners. It will therefore be able to continue to operate despite these inconveniences. Nevertheless, it is essential to clearly define the decision-making powers of the managing partner. Poor management would imply the responsibility of all partners.
Succession to the estate
This is always a very good option when you want to insure an estate with several beneficiaries. The bequeathed assets that are linked to this type of company cannot be the subject of any joint inheritance. The legatee thus avoids the pitfalls that could result from an inheritance. In our case, the shares held by the partner are the subject of the bequest and not the real estate.
Formalities for investing in an SCI
Before creating a real estate company, it is necessary to draft the articles of association that embody the basis of its operation. They can be drawn up either by notarial deed or by private deed. The future partners enjoy a certain freedom in the drafting of these articles of association. Some essential data should be included:
- Majority rules for voting in assemblies
- The limits of the manager's mandate
- The rules to apply when selling or exchanging shares
- Approvals in the event of entry or exit within the Company
All partners are required to sign these articles of association, which must be registered within one month under private signature and within fifteen days under deed before a notary in Monaco. After registration, you will have to pay the taxes related to your file to the Trade and Industry Register:
- A total of €65
- €5 per registration certificate
When the SCI is created in this way, it must be registered in the Special Register of Civil Partnerships within two months.
Accounting management
During the financial year, all accounting transactions must be recorded in a file presenting the statement of income and expenditure. This must be kept at the address of the registered office, along with any other supporting document. Five-year bank account statements will also have to be archived there. The Monegasque authorities must be able to freely consult the various documents in this accounting file.
Monaco Properties: Your partner in real estate in Monaco
Our Monaco Monaco Properties Real Estate Agency works with Monegasque consulting firms on a daily basis and can help you choose the right formula. Every situation is unique. It is for this reason that we invite you to contact us so that we can give you the best advice for the incorporation of your new SCI. We support you in all your steps of buying property in the Principality of Monaco. Our team is at your disposal. We have developed an extensive network of local and international relationships through which our clients have benefited. Our customers deserve personalized service and exclusive attention.
Disclaimer: As a Monaco real estate agency, we partner with authorized local companies to assist with relocation, residency, and other services beyond real estate transactions. We do not provide legal advice, and our services should not be seen as legal counsel. For specific needs, we collaborate with local professionals. Information on our website and blog is for general purposes only and does not reflect individual legal procedures.
