Business Opportunities in Montenegro
Foreign capitalists willing to start a business in Montenegro have several business opportunities to explore. The location of Montenegro caters to the favorable traits of successful business development.
Montenegro’s economic and political stability and its legal framework for investment make it an ideal location for setting up a company.
Tourism documents the most significant and rapid development industry in Montenegro. Tourism positively impacts other business sectors in Montenegro, like agriculture, telecommunication, trade, transport, etc.
The banking sector in Montenegro is known for its stability, which includes seven foreign-owned banks. The opportunities are characterized by deposit growth, liquidity, capital levels, high-interest rates, etc.
The development in agriculture of Montenegro owes to the fertile land, which is less congested with population, and the top-quality waters. The food industry in Montenegro has shown remarkable growth. The agricultural sector of Montenegro provides for 6-9% of the country’s GDP.
Here is a comprehensive guide to assist you if you are considering company incorporation in Montenegro.
Benefits of Starting a Business in Montenegro
The advantages of doing business in Montenegro cover many facilities, from its favorable tax regime to investment incentives.
- The tax policies are such that they favor a company registration in Montenegro. 9% tax is levied on profit in conjunction with 7/19% of VAT and 9/15% of income tax.
- Foreign investors setting up a company in Montenegro can enjoy a liberal investment regime wherein they can start a company alone or they can amalgamate with other investors. They also have access to establish and buy a company or a part of it. The taxes for foreign investors remain the same as those for domestic investors.
- The incentives the Montenegrin government provides are based on investment values and are equal for both Montenegrin and foreign investors.
- The Foreign Investment Law in Montenegro approves the transfers and refunds of profits. There are no restrictions on foreign currency transactions.
Requirements for Starting a Business in Montenegro
Montenegro is a desirable destination for foreign investments. To start a business in Montenegro, you need to meet a few requirements before stepping into your preferred business.
The list below has a compilation of the requirements that you need to fulfill to start a business in Montenegro:
- Company Law: To set up a company in Montenegro, you must choose a business form included in the list of requirements of the Company Law.
- Registration requirements: To make it feasible for the company to undergo the process of registration with the Trade Register, there must be a specific number of shareholders and directors for each type of company.
- Documents: The most necessary documents that you require for setting up a company in Montenegro are the Articles of Association which are accompanied by various application forms.
- Share Capital: To set up a company in Montenegro, you must spare a minimum share capital.
- Tax registration: Once the registration with the Trade Register is done, the company must also acquire tax identification and VAT numbers. It also needs to get various business licenses and work permits.
Types of Business Structures in Montenegro
Choosing the correct business entity is an essential determinant before setting up a company in Montenegro, as the country provides several options to select from. The list below shows the four different types of business entities that Montenegrin law permits:
- Sole proprietorship: The simplest form of business that a single person in Montenegro can operate is known as a sole proprietorship.
- Private limited liability company: It is the most common type of business in Montenegro among local and foreign investors. Company incorporation in Montenegro this kind of business requires a minimum share capital of 1 Euro. The shareholder, who can be a foreign company citizen, also plays the role of the company director.
- Joint stock company: This type of business demands more rigorous requirements than the previous two as it allows stock exchanges. There is a need for an appointed auditor along with a shareholder and a director to run the business. The joint stock company can be established as either a private or a public company.
- Partnership business: As the name suggests, this type of business entity in Montenegro calls for investors who work as partners. The business market in Montenegro has two forms of partnerships, i.e., the general partnership and the limited partnership. Both businesses are aided by at least two members responsible for sharing the profits and participating in the company’s obligations. A limited partnership includes a general and a limited partner wherein the entire liability over the business’s debts lies on the shoulders of the general partner. On the other hand, in a general partnership, both partners exercise the same rights and obligations.
Company Registration Process
The steps below cover the essential aspects you need to attain for setting up a company in Montenegro.
- Check for the availability of the name of your company: To start with the procedures, the first thing you must ensure is the availability of your desired company name.
- Validate the founding agreements of your company: Once you are done selecting your company’s name, you need to certify the founding agreements of your company. You can do this with one of the public notaries of Montenegro. To complete this procedure, you must pay a Montenegro company register and the publication fee at the bank.
- Submit the requested application: You must submit the necessary documents in due course to get hold of a registration certificate, Value Added Tax number(VAT), Tax Identification Number(TIN), and customs authorities.
- Ensure to have the company’s stamp: To execute all types of transactions of your company, you must get the company seal or stamp at hand.
- Open an account in a Montenegrin bank: Company incorporation in Montenegro requires an account holder within a Montenegrin banking system. Opening a company account is a relatively simple process that requires only a valid passport and certain documents requested by the bank, which should be recent.
- Register for taxes, pension, and health fund: After establishing an account in the bank, you must register your company’s employees with the tax administration. Once you complete the registration, the pension and the health fund will recognize your company within their system.
- Notify your business to the authorities: It is essential to inform the Municipality about your company incorporation in Montenegro, even though the process may not be very rigorous. You must pay an administrative fee of 3 Euros through the Municipality’s official website to do so.
How much does it cost to incorporate a company in Montenegro?
Most of the steps of company registration in Montenegro require the submission of a fee. However, several steps are free of charge, making the total cost of incorporating a company in Montenegro affordable:
Here are the costs to consider for setting up a company in Montenegro:
- To prepare the company’s incorporation documents, you must spend around 30 Euros.
- You must pay around 20 Euros to a Montenegrin bank for the registration and publication fees.
- The seal of your company can cost you anywhere between 30-40 Euros.
- The administration fee with the municipality that you must pay is as minimum as 3 Euros.
- The paperwork of foreign citizens and companies, including their identification documents, Articles of Association, etc., can cost around 30 Euros.
Are Foreigners in Montenegro on Certain Passes Allowed to Start a Business in Montenegro?
A specific work permit allows foreign investors to start a business in Montenegro. To exercise such a work permit, you must complete your company’s registration process before applying for the work permit. Once your application receives approval from the authorities, you can run your business.
Montenegro has enacted the Foreign Investment Law, which enables foreign entrepreneurs to establish companies within the country’s territory. The law clearly explains the rights and obligations of foreign investors.
Government Assistance for Foreign-owned Businesses
The Parliament of Montenegro adopted a Law on Foreign Investment in 2011 that eliminates the previous investment restrictions by establishing a new set of investment structures. The law benefits local and foreign investors by allowing them to transfer and repatriate profits and payments. It also allows exemption from customs duty for imported pieces of equipment.
The Government adopted a new Law on Public-Private Partnerships in December 2019. Under this law, the promotion of investment has been taken care of by establishing the Montenegrin Investment Agency (MIA).
How Multiplier Can Help
The company registration process in Montenegro is quite simple, yet it needs some details and adherence to the local laws and regulations.
Multiplier provides a platform with a reliable infrastructure to start a business in Montenegro. It gives you thorough assistance in incorporating your companies across the globe. It takes care of every aspect of your business, from hiring to payroll management.
In addition, Multiplier can furnish its clients with 100% compliance in managing your cross-border teams. Align with Multiplier to enjoy a hassle-free business start-up at affordable costs.