How to Register a Business in the US from Monaco

Step 1: Benefits of starting your US business from Monaco

Monaco, with its idyllic Mediterranean location and reputation as a financial hub, offers several compelling benefits for entrepreneurs looking to start a US business. One of the primary advantages is the favorable tax environment. Monaco is well-known for its zero income tax policy for residents, and although there are certain stipulations, this policy can provide significant financial relief. By spending a considerable amount of time in Monaco, entrepreneurs can maximize their savings and reinvest these funds into the growth and expansion of their US business.

Additionally, Monaco provides an unparalleled quality of life, which can be a substantial advantage for business owners. With a pristine environment, robust healthcare system, and strong focus on security, the principality ensures that entrepreneurs can focus on their business ventures without undue stress. The high standard of living coupled with the opportunity to network with an elite international community makes Monaco an ideal base for managing operations and establishing a successful US business. Beyond the economic advantages, living in Monaco offers a unique blend of luxury and tranquility that is hard to match.

Step 2: How to start your US business from Monaco

If you are based in Monaco and looking to start a business in the United States, you will need to navigate a series of steps to ensure your venture complies with US regulations. First, you must decide on the type of entity you wish to establish, such as an LLC, corporation, or partnership. Each of these has its own legal and tax implications. For foreign nationals, forming a Limited Liability Company (LLC) is often the most straightforward option due to its flexible structure and limited liability protections. You will need to select a state in which to register your business, as different states have different requirements and costs. Delaware, Nevada, and Wyoming are popular choices due to their business-friendly laws.

Once you have decided on the business structure and state of registration, you will generally need to appoint a registered agent within that state. This individual or entity will handle legal and tax documents on behalf of your business. Next, you will need to file formation documents such as the Articles of Organization for an LLC or the Articles of Incorporation for a corporation with the relevant state authority. Following this, obtaining an Employer Identification Number (EIN) from the IRS is crucial, as it will be required for tax purposes and opening a US business bank account. You may also need to secure the appropriate licenses and permits depending on your industry. Finally, it is advisable to consult with a US-based legal or business advisor to ensure compliance with all applicable laws and to streamline the process.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Monaco

Understanding Compliance Requirements for Running a US Business in Monaco

When considering running a US business in Monaco, it's important to understand the unique compliance requirements that come with operating in this distinct market. Monaco, known for its favorable tax regime and business-friendly environment, offers numerous advantages, but it also has its own set of regulations and compliance criteria that must be adhered to. Below are key considerations to help navigate these requirements.

Legal Structure and Registration

Before starting operations, you will need to decide on the legal structure of your business. Options include:

• Sole Proprietorship: Simple to set up but offers no protection of personal assets.
• Limited Liability Company (SARL): Offers liability protection and is suitable for small to medium-sized businesses.
• Public Limited Company (SAM): Preferred for larger enterprises and offers stock issuance options.

Register your business with the Monaco Registry of Commerce and Industry (RCI) to legally operate within the principality.

Taxation Requirements

Monaco offers a favorable tax regime, including:

• Corporate Income Tax: Generally, Monaco does not levy corporate income tax; however, companies earning more than 25% of their turnover outside Monaco need to pay corporate tax at the rate of 33.33%.
• Value Added Tax (VAT): The standard rate is 20%. Ensure proper VAT registration and compliance.

It’s advisable to consult with a local tax advisor to understand specific tax obligations and optimize your tax strategy.

Labor Laws and Employment

Monaco has stringent labor laws that focus on employee rights and work conditions. Key considerations include:

• Employment Contracts: Must comply with Monegasque labor law and be in written form.
• Work Permits: Non-EU citizens need a valid work permit to be employed in Monaco.
• Social Security Contributions: Both employer and employee contribute to Monaco's social security system.

Understanding these requirements is crucial for maintaining compliance and avoiding legal issues.

Financial Reporting and Compliance

Businesses in Monaco are required to maintain accurate financial records and submit annual financial statements to the relevant authorities. Considerations include:

• Accounting Standards: Ensure adherence to accepted accounting principles for accurate reporting.
• Audit Requirements: Public Limited Companies (SAM) and larger SARLs may be required to undergo external audits.

Engage a local accountant to ensure your financial practices align with Monaco’s regulations.

Licensing and Permits

Depending on your business type, specific licenses or permits may be necessary. Examples include:

• Commercial Activity License: Required for most businesses operating in Monaco.
• Sector-Specific Licenses: Some industries, such as finance or healthcare, may need additional permits.

Consult with the Monaco Business Development Agency to identify required licenses for your business.

By understanding and adhering to these compliance requirements, running a US business in Monaco can be a smooth and rewarding experience. Proper planning and professional guidance are essential to navigate this unique business environment effectively.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Monaco

Understanding Tax Obligations for Running a US Business in Monaco

Monaco is renowned for its favorable tax regime and its status as a tax haven. However, when it comes to running a US business in Monaco, there are several key considerations to keep in mind to ensure compliance with both US and Monaco tax laws.

1. Monaco's Tax Environment

Monaco does not impose direct income tax on individuals, which is one of its most attractive features. However, businesses need to be aware of specific conditions:

• Corporate Tax: If your business generates over 25% of its turnover from operations outside of Monaco, it will be subject to a corporate tax rate of 33.33%.
• VAT: Monaco applies a Value Added Tax (VAT) system akin to France’s, generally at a rate of 20%.

2. US Tax Obligations

Despite operating in Monaco, US businesses must adhere to US tax laws:

• Worldwide Income: The US taxes its citizens and resident aliens on their worldwide income. This means US business owners must report and pay US taxes on income earned in Monaco.
• Foreign Tax Credits: To avoid double taxation, businesses can claim credits on taxes paid in Monaco when filing US taxes.
• FATCA Requirements: The Foreign Account Tax Compliance Act (FATCA) mandates that US persons report foreign financial accounts exceeding certain thresholds.

3. Double Taxation Agreements

As of now, Monaco does not have a double taxation agreement with the United States. This absence implies potential for double taxation but also offers more straightforward tax computation without treaty benefits.

4. Legal and Accounting Assistance

Given the complexities of international tax law and the unique aspects of Monaco's regime, seeking professional advice is highly recommended:

• Local Expertise: Engage a Monaco-based tax advisor to ensure compliance with local tax laws and optimize your tax positions.
• US Tax Professionals: Work with US tax professionals familiar with international operations to navigate US tax obligations effectively.

By thoroughly understanding and addressing these considerations, US businesses can successfully manage their tax obligations while maximizing the benefits of operating in Monaco.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country