Article 8 of Law no. 797 of 18 February 1966 on civil companies states that “civil companies are required to keep accounts, the details of which will be specified by sovereign ordinance.”
Although the specifics have yet to be defined, for Monegasque SCIs and SCPs owning property in France, accurate and professionally prepared financial statements are not just best practice—they are essential.
From a French tax perspective, it is strongly advisable for a Monaco SCI or SCP to maintain proper accounts, including comprehensive balance sheets.
In cases where disputes arise regarding the value of the company’s shares, annual accounts are invaluable. They provide critical evidence of the company’s liabilities and help establish the net value of the shares for French tax purposes, particularly for inheritance tax.
While the law does not require accounts to be prepared by a chartered accountant, audited accounts carry significant weight with French tax authorities. Properly audited financial statements offer credibility and reliability, whether in the context of a tax reassessment or during court proceedings. Without such accounts, substantiating the company’s financial position becomes exceedingly difficult.
Unfortunately, many clients have only prepared cash flow statements for their SCIs and SCPs. These documents are useless, as they do not disclose the company's debt amounts. Moreover, balance sheets that have not been signed off by a chartered accountant lack probative value and can easily be disregarded by the French tax authorities.
We frequently encounter clients who must reconstruct their accounts from the company’s incorporation due to the absence of proper financial statements. This costly and time-consuming process highlights the importance of getting it right from the start.
At Square Services we assist in the preparation of comprehensive and accurate financial statements for Monaco SCIs and SCPs owning French real estate. Partnering with chartered accountants, we provide our clients with audited accounts at competitive fees.
This information is for reference only. It is not intended to provide tax or legal advice and should not be relied upon as such.
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