Despite their attraction to the Principality, Americans struggle to settle there due to administrative hurdles. Amberlake Partners, a management company based in Monaco, is facilitating their access to the local banking system after receiving a license from American authorities. Here’s how.
Monaco is often seen as a haven for wealth from around the world, but Americans tend to remain tourists. Despite having the purchasing power to buy property and a genuine interest in the Principality, they are relatively few in number when it comes to purchasing real estate, even a secondary residence. In 2023, out of Monaco’s 38,367 residents, only 449 were American, making the United States the 12th most represented nationality in Monaco, among the 141 nationalities present. Why? The answer lies in a mix of fiscal and administrative constraints.
For Americans, opening an account in Monaco is very difficult
Firstly, American citizens are subject to one of the most complex and stringent tax systems in the world. They do not benefit from Monaco’s tax advantages since their taxation is linked to their passport rather than their place of residence. They remain liable for U.S. taxes no matter where they live, making expat life less appealing. However, the Foreign Account Tax Compliance Act (FATCA), adopted in 2010 to combat tax evasion, makes their access to banking services even more complicated. They must declare their foreign accounts, and banks are required to report certain information about these accounts to the U.S. tax agency. « The reporting system required for American residents is very burdensome, and not all banks are equipped to serve this clientele, » explained Christian Miceli, managing partner at CM Monaco Real Estate.
« Americans had come to terms with paying cash »
« Americans looking to buy property here are aware of these challenges. They know that opening an account here will be difficult, and as a result, they won’t be able to obtain financing locally. Traditionally, they have accepted that if they want to buy, they need to do so without bank financing, » explained Michael Fiorentini, co-founder of Amberlake Partners, located on Boulevard des Moulins. Buying property without financing has several drawbacks. First, it ties up the liquidity invested in the real estate, making it unavailable for other investment opportunities. Moreover, these funds sometimes have to be raised by selling financial assets in the home country, which can result in significant taxation on any capital gains. « It’s money that’s not working; it’s dormant. This goes against the traditional American financial culture, » said the company leader.
A Monegasque company with an American license
This is precisely the niche that Amberlake Partners has targeted. While the company doesn’t only serve American clients, it has specialized in this area by becoming the only management firm in Monaco to hold a license from the SEC (Securities and Exchange Commission), the U.S. financial market regulatory body. The procedure to obtain this license was complex. « We had to work with various Monegasque authorities, in coordination with the SEC. The CCAF and the CCIN were invaluable in this process, » said Michael Fiorentini. This process, both complex and costly, is still a strategic commitment. « It’s a significant investment, » he added.
Once they have an account, they can also borrow
This license now allows Amberlake Partners to manage American clients’ portfolios smoothly and in compliance with regulations. For « U.S. Persons, » the law requires that any investment made based on advice must be supervised by an investment advisor certified by the SEC.
Once they have an account in Monaco, clients gain access to the bank’s financing offers. « Mortgage rates in the U.S. are currently above 7% per year, so when we offer them rates around 4%, they are thrilled! » Michael Fiorentini explained. « Our partner banks can also offer refinancing options. That means if a client has already purchased a property and discovers our solution, we can assist them in setting up a post-purchase loan to extract liquidity, » he clarified.
Europe as a « Plan B »?
The company leader believes that the highly polarized political climate has intensified Americans’ interest in Europe, which they are increasingly viewing as a « plan B. » « Many people are concerned about this new mandate and want to have a solid foothold in Europe just in case, with a second home, a European bank account, and wealth in euros, » he said. Facilitating access to this wealthy clientele, which is still underdeveloped today, could likely have significant benefits for the Principality, particularly by boosting the real estate sector.
