Montenegro is not only a resort but also an attractive jurisdiction for registering a legal entity and doing business. It is usually easier to open a company in Montenegro than in other European countries. It became possible because the country took a course to attract foreign investment and cares about foreigners who want to invest in the local economy.
Benefits of registering a company in Montenegro
Registration of a company in Montenegro has several advantages, including:
- Low crime rate;
- Favorable investment policy;
- Development prospects of the country, and also expansion of international relations;
- National currency – euro;
- Favorable location;
- Low-income taxes (9%) and VAT (19%);
- No secretary needed;
- For small companies, audits are not required;
- Low registration fees and maintenance costs.
Forms of doing business in Montenegro
According to the laws of Montenegro, foreigners can register the following forms of doing business:
- Private entrepreneurship (Entrepreneur);
- Partnership with unlimited liability or a simple partnership (OD);
- Limited Liability Partnership or Limited Partnership (KD);
- Ordinary Joint Stock Company (AD);
- DOO Limited Liability Company;
- Representative office of a foreign company.
One of the most common forms of companies in Montenegro for foreigners is a limited liability company (DOO).
Features of registration of LLC in Montenegro
- The process of company registration usually takes about 2 weeks;
- The minimum authorized capital provided for by the legislation of the country is € 1, but this amount can be higher if you wish (for a joint-stock company, the authorized capital is € 25,000);
- The number of LLC founders in Montenegro is up to 30 people. The composition of the founders should be announced. A foreigner can be both a director of a company and a founder;
- It is necessary to provide few options for the name of the company for verification by the specialists of the state register;
- It is necessary to provide the legal address of the company and the type of its activity;
- The executive director of the company is appointed;
- The documents should be submitted to the Central Register of the Commercial Court personally by the founder or his/her authorized representative (under a power of attorney certified by a notary);
- If the director of the company is a foreigner, then the fact of registration of the company can be the reason for obtaining a work permit.
Registration procedure
You can open a business in Montenegro on your own or with the help of accounting firms. They can also support your company after its opening: keep accounting records, submit tax reports, and so on. However, you should be as careful as possible when choosing an intermediary company and contact only trusted specialists.
The general procedure looks like this:
- Contact an accounting company (most likely);
- Choose one of the six organizational and legal forms of the enterprise;
- Draw up a memorandum of association;
- Collect the rest of the necessary documents and submit them to the Central Register of the Commercial (Economic) Court in Podgorica where the company is registered and issued a certificate of registration of a legal entity and a registration number;
- Register with the accounting and statistics authorities, as well as with the tax service, after which the company is assigned an individual entrepreneur number;
- Order a company seal or stamp;
- Open a bank account (you don’t have to open it right away).
The registration period is usually 10-15 days, sometimes even less. In this case, the procedure may be delayed. You may have to submit additional permits for certain activities or go through additional checks.
Package of documents
In an accounting company: only a foreign passport and a power of attorney.
By yourself:
- copy of a foreign passport;
- statement;
- memorandum of association + copy certified by a notary;
- permission to establish an enterprise;
- company charter;
- receipts for payment of state fees for registering a company (10 euros for all organizational and legal forms);
- confirmation from the bank on the availability of the authorized capital.
Taxes in Montenegro
Montenegro has the following taxation system:
- VAT is 19% (if the company’s annual turnover is over € 18,000).
- Income tax (for legal entities) – 9%.
- Income tax (for individuals) – 9%.
Foreign investors pay the same taxes and receive the same tax guarantees as residents.
Buying a ready-made business
You can also buy a ready-made business in Montenegro. In this case, you do not need to draw it up by yourself; most of the documents are already there. You just have to re-register it to yourself. The main thing is to buy only a proven business, and first, find out the reason why it is being sold. There is nothing difficult about it – just like with the purchase of any other product and/or service.
The cost depends on the type of activity, company turnover, and location. For example, a hotel in a resort area with an area of 300 square meters can be bought for 270,000 euros, a restaurant in the same place with an area of 600 square meters – for 1,500,000 euros.
