Holding French Real Estate Through the Monegasque Société Civile Particulière (SCP): A Strategic Perspective

As cross-border estate planning becomes increasingly complex, the structures used to hold real estate must do more than simply facilitate ownership. They must anticipate succession, offer administrative efficiency, and align with international tax frameworks. One such structure, the Monegasque Société Civile Particulière (SCP), is gaining traction among internationally mobile families and advisors for its potential to meet these demands, which defers from the most commonly known French Société Civile Immobilière (SCI).  

This article explores the SCP’s advantages, its treatment under French Monegasque law, and its relevance in inheritance scenarios involving third country nationals. 

1.    Specific advantages of the SCP 

Avoiding and anticipating joint ownership 

Co-ownership, where several people share ownership of the same property, is common but often creates problems. Without a clear division, co-owners may find themselves at odds, and in the absence of agreement, only a judge can intervene, typically by ordering a sale, often at a reduced price. 

The SCP may provide a more structured alternative. Ownership is represented through company shares, which can be distributed among heirs in a controlled manner. This may avoid the complications of joint ownership and allows decisions, such as sale or management, to be made collectively, in accordance with the company’s bylaws.   

Anticipated organisations on assets and succession   

The SCP enables families to organise their assets in advance and plan succession with clarity. This forward-looking approach helps ensure that the transfer of ownership is smooth and free from conflict. 

Management and financing

The SCP benefits from simplified accounting obligations and no requirement to file annual accounts. This makes it a cost effective and low maintenance structure for long-term asset holding. 

The SCP offers the benefit of simplified governance and can hold multiple real estate, which would otherwise require separate governance. With the SCP, the manager can cover them all.

The SCP gives, under conditions, access to the Monaco banking system and its wide range of financing solutions for luxury assets transactions.

Possible diversification of held assets 

Unlike the French SCI  , the Monegasque SCP allows for the holding of a variety of assets, including: 

• Real estate
• Artworks and collectibles
• Life insurance policies
• Capitalization contracts
• Other financial and movable assets

This flexibility allows for broader wealth management within a single structure.  

2.    Succession, inheriting the property

Under French law, a Monegasque SCP is treated the same way as a French SCI.

Therefore, when more than half of its assets consist of real estate (or rights over real estate), when located in France, the shares of an SCI are regarded as real estate and are subject to French inheritance tax.  

The applicable tax rate ranges from 5% to 45%, depending on the value of the estate and the relationship between the deceased and the heirs.

By contrast, under Monegasque law, the shares of an SCP are considered movable property and are taxable in Monaco, regardless of the company’s asset composition.

This distinction has significant implications: 

• In Monaco, inheritance tax in direct line (e.g. parent to child) is 0%.
• In France, inheritance tax can reach up to 45%, with limited deductions

This difference in interpretation was settled by the France–Monaco tax treaty of April 1, 1950, and later confirmed by French case law. Under these rules, the shares of an SCP owning property in France, even when more than half of its assets consist of real estate (or rights over real estate) located in France, are not subject to French inheritance tax if they belonged to a Monegasque resident who had lived in Monaco for at least five years at the time of death. In such cases, even if the heirs live in France, only Monaco’s inheritance tax rules apply. This rule creates a very different outcome for families dealing with cross-border inheritance.

3.    Important considerations for third-country residents    

Although this  regime was originally designed for Monaco tax residents, it can also apply to individuals from other jurisdictions, depending on the rules of international tax law. Many treaties include a non-discrimination clause, which prevents France from treating foreign nationals less favourably than French or Monegasque nationals solely on the basis of nationality.

Illustrative example 

A Spanish client, who had been a Monaco tax resident for at least five years at the time of his death and owned an SCP holding real estate in France, allows his heirs to benefit from the same  tax treatment as a French national who was a Monaco tax resident, subject to the applicable treaty provisions.

Inheritance scenarios 

• Heir living in France, deceased of foreign nationality (except Serbia and Qatar) who had been residing in Monaco for more than 5 years at the time of death: the succession is governed by Monegasque law, provided that a non-discrimination clause exists in the applicable tax treaties.
• Heir living abroad, deceased residing in France: the succession is subject to French law, unless otherwise provided by international tax treaties.
• Heir living in Monaco, deceased residing in France: the succession is governed by French inheritance law.

Note: This  regime applies only in the case of inheritance. In the case of donation or sale of SCP shares, double taxation may arise, in both France and Monaco. 

Conclusion  

The Monegasque SCP may offer several advantages for owning and transferring real estate located in France. Its structure may help simplify estate planning and reduce administrative burdens.  

Thanks to the France and Monaco tax treaty, SCP shares are treated as movable assets and may benefit from full exemption from inheritance tax in direct line. In contrast, shares in a French SCI are taxed in France at progressive rates, up to 45%, after limited deductions. 

As estate planning becomes increasingly international, the SCP can be used as a strategic tool for families seeking to preserve and transfer wealth across borders with clarity and efficiency.  

How we can help 

At Equiom, we support individuals, families and their advisors in navigating the complexities of cross-border property ownership and succession planning. With deep expertise in international structuring and a clear understanding of jurisdictional nuances, we help clients assess whether vehicles like the Monegasque SCP is appropriate for their long-term goals. 

Whether you’re reviewing existing arrangements or considering how best to hold French real estate, our team can provide clarity around legal frameworks, treaty implications and practical implementation. 

If you’re exploring succession strategies involving property in France or Monaco, contact our team. 

 

This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. This article cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained within this article without obtaining specific professional advice. Please contact Equiom Group to discuss these matters in the context of your particular circumstance. Equiom Group, its partners, employees, and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.