On 12–13 May 2026, Monaco’s National Council advanced Proposition de loi n°278, introducing a new “bail d’activité commerciale” (commercial activity lease). The proposal aims to modernise Monaco’s commercial leasing framework and encourage new retail and service activity in the Principality.
Structured as a 15-article draft law, the proposal would operate alongside Monaco’s existing 1948 commercial lease regime. It introduces rules designed to address current market conditions and support business expansion strategies.
A More Flexible Commercial Lease Framework
The draft law could have significant practical consequences for both landlords and tenants.
For landlords, the proposal seeks to encourage the leasing of commercial premises by clarifying:
- landlord obligations;
- potential rent-setting mechanisms; and
- contractual flexibility intended to facilitate re-letting in Monaco’s dense urban environment.
For tenants and prospective franchisees, the proposed regime aims to reduce entry barriers through a more predictable and business-oriented leasing structure. The framework may support shorter business ramp-up periods, clearer rules on assignment and subletting and improved visibility regarding fit-out investments.
These measures respond directly to the National Council’s policy objective to “dynamise” Monaco’s commercial fabric.
Implications for Franchisors and Regulated Activities
Franchisors and expansion advisers should pay close attention to two important aspects of the proposal.
First, the draft law excludes certain regulated sectors from its scope due to urban-planning and sector-specific regulatory constraints. Excluded activities notably include:
- banking;
- insurance;
- certain real estate-related activities.
As a result, franchise expansion projects should be assessed on an activity-by-activity basis.
Second, the proposal forms part of a broader legislative trend in Monaco. It accompanies other ongoing reforms, including transparency measures concerning foreign ownership and reforms relating to copropriété rules.
Together, these developments may affect due diligence processes, beneficial ownership disclosure requirements, and lease negotiation strategies.
Next Steps and Practical Considerations
What next? The National Council has transmitted the text to the Prince’s Government, which may transform the proposal into a Government bill, amend it, or suspend the procedure.
Businesses operating in Monaco should monitor the Government’s next steps closely and prepare to review lease templates, franchise agreements and due diligence checklists.
Early legal review and proactive lease drafting can help landlords, tenants and franchisors manage commercial and regulatory risk while positioning themselves for future market opportunities.
For strategic advice on how Draft Law No. 278 could affect renewals, rent negotiations, franchising roll‑outs or cross‑border ownership disclosure obligations in Monaco, DL Corporate & Regulatory can provide targeted analysis and updated lease templates tailored to your business model.
