One of the most public cultural and economic trends of the 21st century is digital nomadism. Driven by the trend of globalization it determines the evolution of technology, mobility, and connectedness in how work, life, and travel have transformed in people. To address the rising need for new regimes that regulate nomadism, numerous countries in the world have adopted limited visa programs and revised taxation rules to meet the requirements of digital nomads. Montenegro is among those countries and this article will have a closer examination of digital nomads’ tax situation in Montenegro.

Tax Resident in Montenegro

An individual is considered a resident of Montenegro for tax purposes if they meet any of the following criteria: they spend at least 183 days within a tax year in Montenegro, have a domicile in the country, or maintain their center of personal and economic activities there. Additionally, individuals sent abroad to work on behalf of a Montenegrin resident (whether a legal entity or a natural person) or an international organization are also classified as residents.

Definition of a Digital Nomad in Montenegro

A digital nomad is a foreigner who is employed or performs work electronically for a foreign company or his own company that is not registered in Montenegro.

Digital Nomad Tax Rates

In Montenegro, digital nomads are governed by the law of tax on personal incomes of the country. The first €8,400 of professional income is tax-free. Income in the range from €8,400 to €12,000 is taxed at 9% and income above €12,000 at 15%. Investment income, including dividends and capital gains, is subject to a uniform 15% tax rate. Further, there are local surtaxes imposed outside these federal tax rates and where the rate of surtax changes based on the municipality of the taxpayer.  These tax rules provide a structured yet competitive system for digital nomads working in Montenegro.

To read more about taxes in Montenegro, click here.

Residency as Digital Nomad in Montenegro

The Law on Foreigners in Montenegro defines the regulations governing entry and stay in/by foreigners, as well as their employment in the country. According to this legal act, a foreigner working remotely for a foreign company or independently (unemployed, no registration in Montenegro) can apply for temporary residence permit provisionally for the category of digital nomads.

In order to get a digital nomad residence permit in Montenegro, the applicant is required to submit its application at the office of the Ministry of Internal Affairs at its place of residence. The application is finalized on a designated form either in Montenegrin or in English and for that application applicants need to submit biometrical features, i.e., photograph, fingerprints and a digitized signature. Necessary documents are proof of financial means, housing, health, insurance, current passport or ID, a spent criminal history, and a clean history of remote work of an employing foreign business or personal activity in an area different from Montenegro.

The permit, which takes only 40 days to be issued, has validity for a maximum of 2 years and can be renewed for another 2 years according to the submission’s requirement no later than 30 days prior to the expiry date of the permit. Applicants can stay in Montenegro until their application is processed, provided that such an application is submitted before the end of the 90-day single entry-restriction period. Family reunification is allowed for spouses and minor children.

To read more on the digital nomad experience in Montenegro, click here.

Additional Relevant Information

Living in Montenegro on a digital nomad visa provides a perfect balance of work and relaxation. With its affordable cost of living and welcoming locals, Montenegro is a top choice for remote workers worldwide. If a foreigner who has the status of a digital nomad establishes a company in Montenegro or registers as an entrepreneur in accordance with the law regulating the forms of performing economic activities and their registration, he or she loses the status of a digital nomad.

To read about tax benefits in Montenegro, click here.

If you are considering residing in Montenegro as a digital nomad, it is recommended to evaluate all the legal and financial aspects with legal and/or financial advisors. Our firm specializes in international taxation, and our team is ready to assist with any related matters. If needed, we can connect you with top professionals to support your business activities in Montenegro. Please feel free to contact us.