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Hiring in Monaco

Monaco, officially known as the Principality of Monaco, is a sovereign state in Western Europe. Monaco city is the capital and Monte Carlo is the largest quarter of Monaco. French is the official language. Euro is the official currency. Monaco has the highest GDP per capita in the world and the lowest poverty rate. Tourism and banking are the main sources of revenue. Monaco’s main trading partners are UK, US, Spain, Italy, Germany and Switzerland. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Monaco’s legal and tax regulations. Employment regulations are covered by the Labor Code. Labor Code stipulates that employees are entitled to 30 days of annual leave. There is no income tax in Monaco. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Monaco’s Labor Code and tax laws.

statutory labor requirements

Probation Period

  • The duration of a probationary period is limited by law to three months.

Annual Leave

  • The employee has the right to 2.5 working days of paid leave per month of actual work completed.  
  • The period of the leave must not exceed 30 days.  
  • Part-time employees have the right to the same number of days as full-time employees.

Public Holidays

  1. New Year's Day (1st January)
  2. Saint Dévote's Day (27th January)
  3. Easter Monday (13th April)
  4. Labor Day (1st May)
  5. Ascension Day (21st May)
  6. Whit Monday (1st June)
  7. Corpus Christi (11th June)
  8. Assumption of Mary (15th August)
  9. All Saints' Day (2nd November)
  10. National Day of Monaco (19th November)
  11. Feast of the Immaculate Conception (8th December)
  12. Christmas Day (25th December)

Maternity Leave

  • Women are allowed 16 weeks’ maternity leave in Monaco, for the third child, maternity leave is 26 weeks. 
  • An allowance is paid during maternity off-time. 
  • A pregnant employee is not obliged to reveal her pregnancy until the time she wishes to take maternity leave. 
  • Notification can be by made verbally or by letter.

Paternity Leave

  • You can take paternity leave of:
    • 12 consecutive calendar days for a single birth
    • 19 calendar days for multiple births
    • 19 calendar days if there are already two or more other children in the household
  • You can take the whole or part of this leave.

Sick Leave

  • Days taken as sick leave do not qualify as paid leave, unless there are contractual provisions to the contrary.  
  • Days of absence for sick leave must not be deducted from the annual leave.

Work Hours

  • Monaco has a standard work week of 39 hours per week or a maximum of ten hours per day.

Overtime

  • If there is a request from the employer, an employee in Monaco can render overtime work which should not exceed 47 hours per week. 
  • Workers should be paid 25% for the first eight hours and 50% for any subsequent hours of overtime.

Notice Period

  • If you have worked for your employer for one month or more, your notice period must be at least a week. 
  • If it’s between one month and 2 years, you are entitled to one week’s notice. 
  • For anything above 2 years’ service, you are entitled to one week per year worked, up to a maximum of 12 weeks for 12 years or more of continuous employment.
  • So, if you have worked for seven and a half years, you are entitled to 7 weeks’ notice. 
  • This minimum applies no matter what your contract says.

Severance

  • To qualify for a statutory redundancy payment, you must have been continuously employed for at least two years. Statutory redundancy pay is calculated with reference to your number of completed years’ service. You get:
    • 1.5 weeks’ pay for each year in which you were 41 years old or above
    • 1 weeks’ pay for each year in which you were over 22 but under 41 years’ old
    • 0.5 weeks’ pay for each year in which you were under 22 years’ old
  • A weeks’ pay is subject to a maximum figure of £538 (from April 2020).  
  • The maximum number of years which may be counted is 20.

13th / 14th Month Pay

  • No
  • There is no evidence that there is a statutory requirement to pay the 13th or 14th month salary.
  • The labour code refers to governmental employees.

income tax

  • Monegasque nationals and foreign nationals residing in Monaco, with the exception of French nationals, who are regulated by the 1963 bilateral tax treaty between France and Monaco, are not liable for income tax. 
  • However, the absence of income tax for individuals only relates to activities carried out and persons who are genuinely established in Monaco. 
  • Foreign-source income is subject to the domestic rules of the state in which the source of the income is located and is not subject to Monegasque tax.

deductible expenses

There are no deductible expenses as income tax is not applicable.

immigration

  • All foreign nationals - that is, non-Monegasques - are required to obtain a work permit (Permit de travail) before they take up any job in Monaco. 
  • They also need to get a new permit if they change position or employer.
  • It is the responsibility of the employer to help their employee obtain a work permit. 
  • Recruitment must be agreed by the Service de l'Emploi. 
  • When a job vacancy comes available the employer must contact the Service de l'Emploi, which then has four days to come up with an employee from Monaco or the surrounding area. 
  • Under Monegasque law local people with the same qualifications have priority. 
  • If a candidate within these criteria cannot be found, the employer may then propose its own candidate.
  • To obtain a work permit the employee must submit their contract of employment stamped by the employment service, along with proof of residence and personal identification to the Service de l'Emploi. 
  • If the employee lives in Monaco, a valid Monegasque residence permit is required. 
  • If resident in France, a French identity card or valid residence permit that authorises him to work is necessary.
  • The Employee also has to have an annual medical examination at the Office de la Médecine du Travail 

Type of Visa/ Permit

Documentation

Validity

Eligibility

Work Permit
  • completed application form
  • a valid passport
  • recent passport pictures
  • police clearance forms
  • travel itinerary
  • proof of property ownership in Monaco or rental lease
  • visa fees
  • documents supporting your reason for the application, for example marriage certificate, authorized work contract, proof of sufficient means to live in Monaco without work, etc.
  • a letter of appointment (in the form of an undertaking of employment stamped by the Employment Service, in order to obtain a residence permit issued by the Department of Public Safety)
  • the agreement of the Department of Public Safety as well as the Occupational Health Office are necessary to obtain a work permit (for employees that are unknown in the Principality or who have stopped working for a period of 6 months)

N/A
  • All foreign nationals - that is, non-Monegasques - are required to obtain a work permit (Permit de travail) before they take up any job in Monaco. 
  • Under Monegasque law local people with the same qualifications have priority. 
  • If a candidate within these criteria cannot be found, the employer may then propose its own candidate.
  • To obtain a work permit the employee must submit their contract of employment stamped by the employment service, along with proof of residence and personal identification to the Service de l'Emploi. 

Residence Permit
  • Original and photocopy of passport
  • Original or Certified copy of Birth Certificate (if applicable)
  • Original or Certified copy of Marriage Certificate (if applicable)
  • Original Police Clearance Certificate
  • Original Bank Reference Letter (Not older than 6 month)
  • Evidence of Business Background
  • Evidence of Health Insurance
  • Proof of ownership or rental housing
  • Evidence of Residential Address

1 year (renewable up to 3 years)                                                                                                                                                                                                                                                                                       
  • To obtain a residence permit you must:
  • Have accommodation in Monaco, being the owner of a house or apartment or being the director or unit holder of a company which owns a house or apartment or renting a house or apartment (lease contract minimum of 12 months).
  • Have sufficient financial resources, this requirement is fulfilled making a deposit in a Monegasque bank. Most banks do require initial deposits from €500,000 to €1,000,000 to open an account.

value added tax

  • For the purposes of VAT Monaco is part of the European Union. 
  • The Principality adopts the French system for collection. 
  • Two rates of VAT apply: the normal rate of 19.6% (which is the standard rate in France) and a reduced rate of 7%, which applies to water, food products, medicines, books, special equipment for handicapped people, hotel accommodation, public transport services and public entertainment services.

VAT

Standard Rate

19.6%

Reduced Rate

7%

 withholding tax

There is no withholding tax on dividends and interests.

termination

  • If you have worked for your employer for one month or more, your notice period must be at least a week. 
  • If it’s between one month and 2 years, you are entitled to one week’s notice. 
  • For anything above 2 years’ service, you are entitled to one week per year worked, up to a maximum of 12 weeks for 12 years or more of continuous employment.
  • So, if you have worked for seven and a half years, you are entitled to 7 weeks’ notice. 
  • This minimum applies no matter what your contract says.
  • To qualify for a statutory redundancy payment, you must have been continuously employed for at least two years. Statutory redundancy pay is calculated with reference to your number of completed years’ service. You get:
    • 1.5 weeks’ pay* for each year in which you were 41 years old or above
    • 1 weeks’ pay* for each year in which you were over 22 but under 41 years’ old
    • 0.5 weeks’ pay* for each year in which you were under 22 years’ old
  • A weeks’ pay is subject to a maximum figure of £538 (from April 2020).  
  • The maximum number of years which may be counted is 20.

statutory benefits

  • These are mandatory benefits as postulated by law
  • These include probationary period, annual leave, public holidays, maternity leave, paternity leave, overtime pay, severance pay and 13th month pay.
  • Statutory benefits also include social security benefits

Statutory Benefits

Probationary Period

Annual Leave

Public Holidays

Maternity Leave

Paternity Leave

Overtime Pay

Severance Pay

13th Month Pay

Social Security Benefits

 employee accruals

   
Christmas Bonus%

0%
Christmas Bonus Over Vacations %

0%
Severance per Year %
Employees are entitled to severance pay that equals to 25% of their monthly salary (2.08% of annual salary)
Vacations %
Employees are entitled to 24 days of annual leave (6.59% of annual salary)
Notice %
Employees are entitled to 30 days of notice period for one year of service or more (8.24%)
Christmas Bonus Over Notifications%
0%
Vacations Plus%
0%
Total percentage of Salary (yearly)
The total employment accruals as a percentage of salary per anum are equal to 17%

 employer accruals

Additional information (Country Accruals)

   
Social Security 7.5%
Description Gainfully employed persons, including self-employed persons earning at least US$10,000 a year or with at least one employee (small businesses).Voluntary coverage for self-employed persons earning less than US$10,000 a year.

 
Exclusions Casual employees who work less than one week in any calendar month and family labor.
Special systems (individual retirement plans) for some types of government employees.

Employer Accruals Additional information

    Employment Accruals
Annual Leave The employee has the right to 2.5 working days of paid leave per month of actual work completed.
The period of the leave must not exceed 30 days. 		This equals 8.22% (30/365 days) of annual income
Maternity Leave Women are allowed 16 weeks’ maternity leave in Monaco, for the third child, maternity leave is 26 weeks. This equals 30.76% (16/52 weeks) of annual income
Paternity Leave Fathers can take paternity leave of:
• 12 consecutive calendar days for a single birth
• 19 calendar days for multiple births
• 19 calendar days if there are already two or more other children in the household		 This equals 3.28% (12/365 days) of annual income
Overtime If there is a request from the employer, an employee in Monaco can render overtime work which should not exceed 47 hours per week.
Workers should be paid 25% for the first eight hours and 50% for any subsequent hours of overtime.		 Normal hourly rate is around 26.5 EUR. Overtime is paid at an additional 6.6 EUR
Severance To qualify for a statutory redundancy payment, one must have been continuously employed for at least two years. Statutory redundancy pay is calculated with reference to one’s number of completed years’ service.
• 1.5 weeks’ pay for each year in which employees were 41 years old or above
• 1 weeks’ pay for each year in which employees were over 22 but under 41 years’ old
• 0.5 weeks’ pay for each year in which employees were under 22 years’ old		 This equals 1.92% (1/52 weeks) of annual income
13th Month 13th month pay in the form of a 5% “prince's bonus” is mandatory in Monaco This equals 5% of annual income
Social Security Employers must make the following social security contributions: - Sickness Contribution and Family Allocation 15.05%; Basic State Pension Contribution 8.03%; Unemployment Contribution 4.05%. This equals 27.13% of annual income

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