Private placement of securities in Monaco

Private placings

Are there specific rules for the private placing of securities? What procedures must be implemented to effect a valid private placing?

For the issuance of bonds, as well as for any offering of shares that triggers an amendment of the company’s articles of association (eg, issuance of new shares), domestic public limited companies and joint-stock companies must obtain the prior approval of the Monaco government. Subsequently, the shareholders’ meeting decision relating to the operation will need to be filed with a notary and published in the Official Journal of Monaco with mention of the government’s approval to become enforceable.

Pursuant to the Monaco Commercial Code, shareholders are listed on the share registry of the company, which is held at the company’s registered office. This registry must be provided to Direction de l’Expansion Economique upon request, as well as to the company’s auditors. Any share transfer must be mentioned on the registry.

Please note that domestic public limited companies and joint-stock companies cannot start trading the shares of the company’s founders before the expiration of a two-year period following the incorporation of the company.

What information must be made available to potential investors in connection with a private placing of securities?

There is no domestic rule in this regard.

Do restrictions apply to the transferability of securities acquired in a private placing? And are any mechanisms used to enhance the liquidity of securities sold in a private placing?

Domestic public limited companies and joint-stock companies cannot start trading the shares of the company’s founders before the expiration of a two-year period following the incorporation of the company. During this two-year period, the company managers must record those shares as being non-tradable, with mention of the company incorporation date.

For the issuance of bonds, as well as for any offering of shares that triggers an amendment of the company’s articles of association (eg, issuance of new shares), domestic public limited companies and joint-stock companies must obtain the prior approval of the Monaco government. Subsequently, the shareholders meeting decision relating to the operation will need to be filed with a notary and published to the Official Journal of Monaco with mention of the government’s approval in order to become enforceable (see question 7).