A large part of Monaco financial activity is represented by the banking sector. There are around 40 banking establishments.

The total amount of accounts deposits is around 60 billion Euro of which 70% come from non-residents.

Aside from the highly skilled management, the Monegasque banking system is governed by specific rules defined by the Monegasque Bank Association (AMB):

• Professional secrecy — employees of the banking profession (professions with similar regulations) are prosecuted if violating professional secrecy (art. 308 of the Monegasque Code of Criminal Law);
• Confidentiality of information and computer data — all information and computer data on persons and entities that are liable for taxation on French territory is strictly protected.
  Joint or group accounts are declared immediately on opening to the Monaco fiscal authorities, so that problems of succession be avoided.
• Code of ethics of the banks — issued by the AMB; it defines the minimum rules that must be observed by various institutions in Monaco;
• Money laundering prevention.
  A specialized department has been created — the Department for Information and Control of Financial Channels (SICCFIN) and a set of specific laws were promulgated:
  
  • Law no. 1157 of 23.12.92
  • Law no. 1162 of 7.7.1993 as amended by law no. 1253 of 12.7.2002
  • Ministerial decree no. 2003-503 of 29.9.2003

Opening an Offshore Bank Account

Setting up an account in a bank in Monaco or in any other reputable tax haven is a rather complex and difficult procedure. Many details must be provided regarding the deposited funds and timing of withdrawals. Some banks require the presence of the applicant, while others accept the legalized copies of the necessary documents:

• Passport and driver's license — notarized copies;
• Reference letter from present bank;
• Signed bank forms;
• Frequency of deposits and approximate amount;
• Details on the source and use of funds;
• Signed statement declaring that the source of funds is not Drug or money laundering;
• Business' papers of formation and certificates — copies;
• Deposit amount.

Some banks also ask for:

• A copy of a utility bill (except for phone bills) — to prove the authenticity of your address;
• The ID number of the signator's tax;
• A form by which inspection from foreign officials is allowed.

Advantages of Monaco offshore banking:

• Tax benefits, for example, interest on offshore accounts and investments is paid without the deduction of tax. You may benefit of this advantage by transferring savings and investments to an offshore bank account;
• The presence of a secure legislative base;
• Asset protection guarantee;
• High levels of data confidentiality, security and convenience;
• Global access, no need for offshore traveling — you can bank via Internet, e-mail, post or telephone.

There are some peculiarities with Monaco offshore banking system that might constitute inconveniences:

• Many exceptions from data confidentiality. Usually when talking offshore banking an almost hermetical confidentiality is implied. It is not the case with Monaco:
  • All financial Monegasque institutions (not only banks) have the duty to provide information to government bodies such as customs and excise:
    • When there are well-founded suspicions of serious criminal conduct.
    • Whenever there is a request for information from:
      • an heir or legatee of an account
      • the account holder's authorized representative
      • a spouse who has the appropriate court order
      • a minor's representatives
      • the legal representatives of a corporate body
    • Whenever one of holders of a joint account wishes to release the bank from its secrecy obligation on condition that the other account holders are not unduly prejudiced thereby
  • Monaco will be obliged to report bank interest and other returns on savings earned by EU citizens to their home tax authorities. This measure will be applied probably beginning with 2005. (according to EU's Savings Tax Directive, agreed in 2003)
  • Monaco's banking system is controlled in a high degree by the bank of France. Bankers in the Principality have the duty to provide the Bank of France all information required on French nationals. Thus information may be passed on to the French tax authorities and may be used in accordance with French law on international judicial assistance in criminal matters, possibly reaching further the authorities of a third country.
• The high entry level might constitute an inconvenience. Generally, a minimum opening balance of €80,000 is required.
• In Monaco the personal presence of the account owner is needed at the opening of the account.