Following its independence in 2006, Montenegro has made significant strides in social and economic development, establishing itself as a safe, stable, and prosperous country. Due to its numerous commercial benefits, Montenegro is a desirable location for investments in a wide range of industries.

Montenegro’s economic foundation predominantly revolves around three sectors, with the government concentrating its efforts on advancing energy and agriculture, particularly emphasizing tourism. Approximately 25% of the country’s Gross Domestic Product (GDP) is attributed to tourism, and Montenegro annually receives a tourist influx that exceeds its population threefold. The sector benefits from substantial contributions by emerging luxury tourism enterprises, including those providing opportunities for ship and yacht tourism.

Additionally, Montenegro’s shipbuilding ports are renowned across the Mediterranean for their excellence in providing services for the construction and refurbishment of yachts and mega-yachts at the highest global standards. This high-quality support significantly contributes to the expanding nautical tourism industry.

Investment Advantages

In 2004, Montenegro enacted the Free Zones Law, providing businesses with advantages and exemptions from customs duties, taxes, and other obligations within designated free trade zones. The only operational free zone is situated within the Port of Bar’s premises. This zone is home to a total of 32 companies, out of which 14 have been established through foreign investment initiatives. For more detailed information about the active free zone, please, click here.

It is important to mention that Montenegro has established one of Europe’s most competitive tax systems, featuring a favorable 9% personal income tax rate. Companies operating within the country benefit from both a business-friendly environment and a reduced tax burden, leading to the maximization of their operational profits. In addition, businesses operating in Montenegro are not subject to minimum taxes or surtaxes, with corporation tax rates set between 9% to 15%.

Trade Policies in Montenegro

Due to the equal treatment concept that underpins Montenegro’s Company Law, foreign investors are granted the same rights and obligations as domestic investors. In Montenegro, a limited liability company (D.O.O.) is the most popular type of business registration. Among its primary traits are: it may be established by natural or legal individuals, either domestic or foreign; the company’s debts are owed by the founders up to the sum of their contributions; one euro is the minimal amount of starting money; basic management practices; a broad variety of tasks that you are capable of managing; being a co-owner or owner of a Montenegrin business establishes the prerequisites for the owner and his family to get a work permit and a residence.

Trade policy in Montenegro is distinguished by low customs taxes and the absence of non-tariff trade barriers.  The Law on Customs Tariffs prescribes Montenegro’s tariff system, encompassing rates from 0 to 30 %. Notably, customs tariffs are not applied to exported goods. Furthermore, Montenegro’s primary export revolves around raw materials, particularly aluminum, whereas key import categories include cosmetics, personal hygiene products, food products, and clothing.

Montenegro’s Economic Prospects and Investor Guidance

Montenegro’s strategic focus on key sectors such as energy, agriculture, and tourism, along with the implementation of investor-friendly policies, has attracted both domestic and foreign investments. The thriving tourism industry, supported by world-class shipbuilding ports and favorable tax systems, has played a crucial role in Montenegro’s economic success.

The establishment of free trade zones, competitive tax rates, and equal treatment for foreign investors further enhance the country’s appeal for business ventures. Montenegro’s commitment to a business-friendly environment, low customs taxes, and a transparent trade policy underscores its dedication to fostering economic growth and global partnerships. As Montenegro continues to evolve as a prominent player in international trade, its diverse economic landscape and forward-looking policies set the stage for sustained prosperity and opportunities for both investors and businesses alike.

It’s important for individuals, before proceeding with investment, to be aware of the legal and financial procedures. Consulting with a tax and legal professional can be beneficial in navigating the complexities. Our firm offers comprehensive tax services in Montenegro, among other areas. Contact us, and we would be happy to arrange an introductory meeting with you.