Montenegro - Nimrod Yaron Albania

Strategic Investments in Montenegro

BananaBlitz — Sun, 20 Oct 2024 15:30:06 +0000

Montenegro, strategically located in the Western Balkans, provides advantageous investment opportunities for foreign investors. The development strategy, a key policy of the country, aims to attract foreign direct investments through a competitive and business-friendly environment. Accordingly, Montenegro aims to position itself as a major business hub in Southeast Europe, drawing companies and investors worldwide.

No Restrictions for Foreign Investments

Montenegro has been attracting many foreign investors in several promising sectors likewise tourism, energy, real estate, and infrastructure. Important to note, that Montenegro works on providing a business environment characterized by favorable regulations and financial incentives. Its business-friendly environment is supported by competitive tax rates and legal reforms that allow for smoother processes when opening and running a business. For instance, setting up a business in Montenegro is quite straightforward.

Foreign investors enjoy the same rights and conditions as local investors when establishing a company or making investments. For all foreign natural and legal entities, the state allows investments into the country without restrictions.

Numbers to Look At

Within the timeframe December 2006 to December 2023, the country received a total of €13.8 billion in Foreign Direct Investments, according to the Central Bank of Montenegro. From 2019 to 2023, Foreign Direct Investment (FDI) inflows reached €4.38 billion. Of this total, €859.9 million was directed toward domestic companies and banks, €1.7 billion represented intercompany debt inflows, €1.48 billion was invested in the real estate sector, and €296.9 million was allocated to other sectors.

The Montenegrin Investment Agency (MIA) noted that the primary investors came from Switzerland, Russia, Serbia, Germany, Italy, the USA, and other countries.

Reasons to Invest in Montenegro

Montenegro has great potential in renewable energy, offering opportunities for investors to develop green energy projects. Infrastructure development also occupies an important place in the country’s focus, offering new perspectives for investment in construction and transport.

Investing in Montenegro can therefore provide diversification in an investment portfolio. There is also a chance for strong returns, due to its growing economy and multiple sectors offering opportunities. Montenegro provides easier access to investments and simplified business registration, making it more attractive for entrepreneurs. It offers entry into a market of over 20 million consumers and greater integration into EU and global trade networks. Additionally, the country promotes the use of innovation and digital technologies, fostering a modern and competitive business environment.

To read more about Montenegro click here.

Investment Incentives in Montenegro

New businesses operating in economically underdeveloped areas are exempt from paying corporate income tax for their first eight years.

The Value Added Tax (VAT) law allows for a VAT exemption on products and services used for building and equipping catering facilities that are rated five stars or higher.

A taxpayer starting a business in an economically underdeveloped area who hires someone for an indefinite period or at least five years will not have to pay income tax for that employee for four years from the hiring date. This exemption is subject to the conditions outlined in the Law on Income Tax of Natural Persons.

The Law of Value Added Tax prescribes VAT exemption on the supply of products and services for the construction and equipping of an energy facility for the production of electricity with an installed capacity exceeding 10 MW.

Startups and spinoffs do not have to pay employer contributions for their employees. This exemption applies to workers in scientific research institutions, those involved in scientific research or innovation activities, and freelancers doing innovative work for foreign companies.

If you want to read more about incentives in Montenegro click here.

If you are interested in investing in Montenegro, it is advisable to consult with a professional on investment opportunities that best suit your needs. 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.

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Tax Benefits in Montenegro

BananaBlitz — Wed, 17 Jul 2024 15:59:25 +0000

Montenegro is a vibrant and competitive country committed to fostering a sustainable tourism portfolio while preserving its natural resources. In recent years, the country has experienced remarkable economic growth, driven by the adoption of the Euro as its official currency and substantial investments in key sectors such as tourism, energy, water, and transportation infrastructure.

The Ministry of Economic Development and Tourism in 2022 updated the Investment Incentives Inventory featuring a total of 51 investment incentives. These incentives cover diverse areas, including financial and non-financial aspects, along with fiscal incentives. Incentives affect taxes, customs, excise taxes, fees, agriculture, science, tourism, services, construction, sustainable and economic development subsidies, as well as incentives in the fields of renewable and hybrid energy.

Individuals and Corporate Tax Incentives

Self-employed individuals who start their business in underdeveloped areas in Montenegro, are eligible for an 8-year tax exemption of up to EUR 200.000. However, this incentive does not apply to sectors like agriculture, transportation, shipbuilding, fishing, and steel production.

NGOs who participate in economic operations could reduce their corporate tax base by EUR 4000, provided the profits are used to promote their primary objectives. Additionally, resident taxpayers, have the right to a foreign tax credit, which equals the company tax paid abroad, but it can never exceed the tax that would have been paid in Montenegro.

Incentives in the Tourism Industry

Some of the incentives that the Montenegro Government has implemented in the tourism industry include:

Zero VAT policy – for the construction and equipping of five-star or higher catering facilities, energy facilities producing over 10 MW of electricity, and food production facilities with an investment value exceeding EUR 500,000, as per the Value Added Tax Law.
Tax relief options under the Real Estate Tax Law allow for reduced tax rates on catering facilities based on star categories: up to 15% for 3-star, up to 30% for 4-star, and up to 70% for facilities with more than 4 stars. After paying corporate income tax, Montenegro-based businesses can transfer funds abroad at the year-end.
A reduced VAT rate of 7% – applies to various services, including accommodation in hotels, food preparation and service in catering facilities (excluding certain beverages), and public transport for passengers and their luggage.

Furthermore, premium hotels are exempt from utility fee payments. Additionally, for the construction of four-star or higher hotels, investors are not required to pay fees for communal equipment of construction land under the Spatial Planning and Construction Law, unless operating under specific business models.

If you are considering to invest in Montenegro, we suggest prior consulting with a tax and legal professional can be beneficial in navigating the details. 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.

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Establishing a Company in Montenegro

BananaBlitz — Tue, 16 Jul 2024 15:45:36 +0000

Montenegro is an attractive option for entrepreneurs and remote workers looking to establish a business in Europe. Known for its stability and favourable investment laws, Montenegro offers numerous business advantages. This article will focus on the essentials of company formation in Montenegro, including registration procedures and fiscal obligations.

In Montenegro, companies are categorized by size according to their employee count: small enterprises have 1-49 employees, medium-sized companies have 50-249 employees, and large enterprises employ more than 250 individuals.

Types of Companies in Montenegro

Entrepreneur /Sole Proprietorship – This business structure provides a convenient platform for startups and freelancers due to the swift registration process. After completing the registration process, the sole trader must apply for a business license and register for taxation and VAT purposes.
Limited Liability Company (LLC) – In Montenegro, this is the most common form of legal entities. Limited liability company has to contain “LLC” designation in its name and the number of shareholders may vary from 1 to 30. The minimum capital required for the establishment of the company is EUR 1.00. Founders are liable for company’s obligations up to the amount of their deposits. The owners of the LLC hold shares that reflect their percentage of capital ownership.
Joint Stock Company – To register a joint stock company, strict requirements need to be followed and there is high minimum capital. Aside from the shareholder and the director, an auditor must be appointed too. The minimum investment required is EUR 25,000.00; in the case of banks and insurers a higher amount is needed as investment.
Branch of a Foreign Entity– A branch of a foreign company is a business unit that operates in Montenegro but is registered outside of Montenegro. This business unit is considered inseparable from its parent company according to the Montenegrin Law on business entities. Therefore, a 100% foreign-owned company can legally exist and operate in Montenegro.

Company Registration Procedure

The Central Register of the Commercial Court (CRPS) in Montenegro manages the process of business registration via its website. It administers an electronic database of registered businesses and various financial agreements. Typically, the registration process takes about 4-5 working days, with the minimum financial threshold for establishing a Limited Liability Company (LLC) set at just EUR 1.00. Documents needed for the registration procedure mainly include a founding decision, bylaws, and, for individuals, a passport copy. Additionally, the CRPS website offers downloadable samples of all requisite documents.

Following the registration procedure, the company is expected to open a bank account and report to the tax authority to obtain a taxation identification number (PIB). In addition, it needs to acquire the value-added tax (VAT) number.

Benefits of Registering a Company in Montenegro

Among the benefits of establishing a company in Montenegro, notably the corporate tax levied at 9%, and VAT levied at 21% head the list. Essential items such as drugs, books and computers are subject to tax deductions.

The workforce is highly skilled and employment ready and the office rental costs are significantly lower than in the Western Europe. International investors have the opportunity to participate in privatizations and own land under the same conditions as residents.

Montenegro offers significant business opportunities due to its strategic as the “Gateway to the Balkans”, with access to approximately 800 million consumers through many trade agreements.

The country’s commitment to infrastructure development, including major transportation network renovations and projects like the 41 – kilometre highway, improves connectivity and trading capacities.

Another significant area of potential is the energy industry, which includes investments in renewable energy projects like the underwater electric transmission cable to Italy. Montenegro’s business-friendly registration ensures that foreign and domestic investors are treated equally, allows for-profit returns, protects against expatriation, and offers custom duty waivers.

To navigate the business registration process most efficiently, it is recommended to seek professional consultation. Our firm, with expertise in international taxation, has connections with top taxation firms worldwide, and particularly in Montenegro. We would be happy to refer you to them as necessary. Click here to contact us.

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Opening a Bank Account in Montenegro

BananaBlitz — Tue, 16 Jul 2024 15:15:47 +0000

In recent years Montenegro has seen its banking sector grow, which has helped to rebuild the trust among consumers in banks. Credit cards and bank cards are widely accepted for payment in most shops and restaurants. Despite not being in the Eurozone, Montenegro uses the Euro as its primary currency. Whether you are relocating to Montenegro, or simply looking for a convenient way to make transactions, this article will guide you through the options available to meet your banking needs.

Choosing a Bank in Montenegro

In Montenegro there are 11 (eleven) banks which operate in the market. Selecting the right bank is important depending on an individual’s preferences. For example, people may differ on the bank account type they want, the frequency of money transfers wanted, residency status, and other financial needs. It is important to examine historical performance and stability to ensure the bank chosen provides the best experience possible.

Montenegro’s banks offer low fees, typically under €1 monthly, however there might be extra costs for international transactions. The activity of the banks is regulated and supervised by the Montenegro Central Bank.

Main banks in Montenegro include:

Erste Bank.
Prva banka Crne Gore.
Hipotekarna Banka.
Lovćen banka.
NLB Banka.
Ziaraat Bank.
CKB Banka.

Types of Banking Services

Most of the banks in Montenegro offer similar services. An individual can open many different types of accounts, such as personal account, savings account, foreign currency account, student accounts, and more. All banks offer lending products such as personal loans, housing loans and credit cards. As a foreigner, the best way to go would likely be opening a basic account as that gives the most needed and basic features. Some services of this account include the debit card, 24-hour service, withdrawals/deposits, e-statements etc.

Opening a Personal Bank Account

Opening a bank account in Montenegro is now a facilitated procedure thanks to major improvements in the banking sector, where non-residents can efficiently manage their finances. While some banks ask for more information, if necessary, the general requirements include application for residence permission, employment letter, proof of accommodation and ID or Passport.

Opening a Business Bank Account in Montenegro

When opening either a personal or business bank account in Montenegro physical presence is required. Opening a business bank account involves strict due diligence requirements, and additional documentation may be requested. The required documents include:

National ID and/or residency permit copy
Certified rental agreement
Articles of Association
Corporate Stamp Certificate
list of authorized signatories.

The company director must sign the account opening paperwork in person. Non-citizens need a residence permit to enter Montenegro. Certain banks may require an additional step, which involves obtaining a notarized passport and a confirmed signature from the company’s director. It’s important to note that local and foreign accounts must be requested separately during the opening process.

Opening a Bank Account for Foreign Legal Entities

Foreign companies can open a bank account in Montenegro and the procedure requires the following documents:

Complete details of the legal entity, including name, address, registration number, phone/fax, and description of activities.
Decision on the company’s registration, either the original or a copy certified by relevant institutions, not older than three months.
Certified copy of the passport of the legal entity’s owner or original power of attorney for authorized directors with specimen signatures.
Original power of attorney for an authorized person, along with its Montenegrin translation, to manage funds on behalf of the legal entity.
Certified copy of the passport (for non-resident) or ID card (for resident) of the authorized person.
Original and Montenegrin translation of Memorandum and Articles of Association.
Original form of verified signatories, notarized in Montenegro.
Beneficial Owner Declaration.
Covering letter explaining the company’s business activities.

When deciding on the bank that meets your needs best, it is important to receive the best banking experience. Picking a bank and account type is crucial for each individual as everyone has different preferences and financial situations. With the innovation of technology, anyone can bank online with ease. 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.

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Corporate Income Tax in Montenegro

BananaBlitz — Mon, 01 Jul 2024 09:44:01 +0000

Montenegro, independent country since 2006 and currently working towards the EU membership, provides an attractive environment for investors with one of Europe’s lowest tax rates of 9%. The country has over 20 business-related laws with EU standards, simplifying property acquisitions and facilitating investments in the EUR currency. This article will explore Montenegro’s attractive corporate tax regime, focusing on benefits for both local and foreign investors.

Corporate Residency in Montenegro

In Montenegro, businesses are subject to a progressive Corporate Income Tax (CIT) based on their generated profit. Legal entities should file their annual tax reports and pay taxes at the end of March. The tax rates are levied between 9% to 15%, with the following structure:

For profits up to EUR 100,000 the tax rate is 9%.
Profits from EUR 100,000.01 to EUR 1,500,000 incur a tax of EUR 9,000 plus 12% on the amount exceeding EUR 100,000.01;
Profits exceeding EUR 1,500,000.01 result in a tax of EUR 177,000 plus 15% on the amount surpassing EUR 1,500,000.01;

Corporate Income Determination and Sources

Income sources subject to corporate tax in Montenegro include:

Ordinary business operations or activities closely related to them.
Transfer of real property or income arising from immovable property.
Dividends and other forms of income distribution.
Interests.
Royalties.

New Amendments in the Montenegro Corporate Income Tax Law

The new changes, effective since 2024, aim to align Montenegro’s tax framework with EU tax legislation, in the scope of the EU’s Council Directive 2009/133/EC. This directive establishes a standardized taxation system for mergers, divisions, asset transfers, and share exchanges among companies from various EU member states. Additionally, the suggested modifications will facilitate the transfer of registered seats between member states, with implementation postponed until Montenegro officially joins the EU.

The amendments are reflected in the following categories of Corporate Tax Law:

CIT Base. The changes specify that the CIT base is determined by adjusting the pre-tax profit from the balance sheet following accounting rules like International Accounting Standard (IAS) and International Financial Reporting Interpretations Committee (IFRS). Accounting policy changes will be recognized as income or expense over five tax periods, while as income from liquidating other entities is excluded from the CIT base.

Capital Gains. Detailed rules for determining asset acquisition value were introduced. The tax authority can adjust the selling price to market value in transactions between related or unrelated parties.

Withholding Tax. The definition of withholding tax taxpayers is expanded to include legal entities. A new subject of withholding tax distribution of the liquidation surplus is introduced. In addition, permanent establishments are now obliged to pay withholding tax on dividends, profit, and liquidation surplus payments.

Adjustments in the Subsidy Rule. The Amendments remove the subsidy for newly employed from the CIT Law, as it’s covered in the Personal Income Tax Law. For non-residents dealing with dividends, interests, royalties, and services, the withholding can be deducted based on double taxation treaties Montenegro has with other countries.

Deductions

Corporate tax deduction is available in Montenegro for tax depreciation, business-related interest, and bad debts that are more than 365 days, with legal action. Charitable gifts are tax-deductible up to 3.5% of revenue. Salary and termination bonuses are deductible expenses. Deductions for entertainment and membership fees are limited. Tax losses can be carried forward up to 5 years.

Corporate Tax Incentives

In Montenegro, the corporate provides many tax benefits, newly founded production businesses in undeveloped towns can receive an eight-tax exemption of up to EUR 200.000. Nonetheless, this does not apply to sectors like agriculture, transport, and steel production, among others.

NGOs engaged in business can reduce their tax base by EUR 4,000, provided the profit supports their primary objectives. Additionally, resident taxpayers are eligible for a foreign tax credit, which should match the company tax paid abroad.

Montenegro’s developing economy encourages foreign investments, offering residency and citizenship opportunities to attract global investors. Its strategic location in Europe, usage of the Euro currency, and thriving real estate market make it an appealing base and financial activities.

Consulting with a tax and legal professional can be beneficial in the administration of the corporate income taxes and aspects related to it. 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.

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Personal Income Tax in Montenegro

BananaBlitz — Tue, 04 Jun 2024 13:03:18 +0000

Montenegro is a country situated in the Western Balkans, characterized by a steadily growing economy. Consequently, many foreigners live, work, and invest in this country. Through this article, we will provide an overview of personal income tax regulations in Montenegro to help you understand the responsibilities and regulations regarding personal taxes.

Residency for Tax Purposes in Montenegro

To be considered a resident in Montenegro, you must meet one of the following conditions:

Spend at least 183 days in Montenegro during a tax year.
Have your permanent home in Montenegro.
Conduct the majority of your personal and economic activities in Montenegro. Additionally, if you are sent abroad to work for a Montenegrin resident or organization, or for an international organization, you are also considered a resident for tax purposes.

Income Determination and Tax Rates

The taxation of individual income in Montenegro depends on residency status. Residents are responsible for taxes on their global income from any source, while non-residents are taxed on income linked to a fixed base/permanent establishment in Montenegro.

To be taxed in Montenegro, individuals must either spend 183 days annually in the country or demonstrate that Montenegro serves as the center of their economic and personal life.

The tax rate for individual income varies from 9% to 15%. As of January 1, 2022, a progressive taxation system for salaries and income earned by entrepreneurs is implemented.

For monthly salaries:

Salaries up to EUR 700 (gross) are tax-exempt.
Salaries between EUR 701 and EUR 1,000 (gross) are taxed at 9%.
Salaries above EUR 1,000 (gross) are subject to a 15% tax rate.

For monthly income for entrepreneurs:

Income from EUR 8,400.01 to EUR 12,000 is subject to a 9% tax rate.
Income exceeding EUR 12,000.01 is taxed at a rate of 15%.

Local Surtax

In Montenegro, there is an additional tax called a local surtax that you pay on top of your regular income tax. This surtax goes to the municipality where you live in Montenegro. Most municipalities charge a 13% surtax rate, but in Podgorica and Cetinje, it is set at 15%. The surtax amount is calculated based on your income tax owed.

Montenegro Double Tax Avoidance

Resident taxpayers who earn income abroad and pay income tax in another country will receive a tax credit equivalent to the income tax paid in that country. However, this credit cannot surpass the amount calculated by applying the provisions of Montenegro’s Personal Income Tax Law to the income generated in the foreign country. In the case of a double taxation avoidance agreement, the provisions of the Personal Income Tax Law in Montenegro will prevail.

Before moving, working, and investing in Montenegro, it is important for individuals to be aware of the legal and financial implications. Consulting with a tax and legal professional can be beneficial in navigating the complexities. Our firm offers comprehensive guidance in international taxation. Contact us, and we would be happy to arrange an introductory meeting with you.

הפוסט Personal Income Tax in Montenegro הופיע לראשונה ב-Nimrod Yaron Albania.

Real Estate In Montenegro

BananaBlitz — Wed, 21 Feb 2024 16:35:43 +0000

The Montenegro real estate market has undergone substantial growth and development in recent years. This overview offers an insight into the essential aspects that define the current state of the property sector in Montenegro.

The eligibility of foreign citizens to acquire real estate in Montenegro

Foreigners, individuals, and corporate entities can freely buy apartments, houses, and commercial properties in Montenegro without any restrictions. However, foreigners are restricted from buying land, including agricultural and forest land.

Exceptionally, a foreign physical person may acquire the ownership right on agricultural land, forests, and forest land of a surface up to 5,000 m2, only if a residential building located on this land is subject to the contract of divestiture (sale, gift, exchange, etc.).

Moreover, a foreign physical person may, on the territory of Montenegro, acquire the ownership right on immovable property through inheritance in the same way as a citizen of Montenegro. Furthermore, a foreign person can be entitled to a long-term lease and concession on the immovable property for natural resources and immovable properties located in the area declared under the protection of interests and safety of the country.

Additionally, foreigners are eligible to obtain a loan from a Montenegrin bank for real estate purchases, however, the bank may require various documents to verify the buyer’s financial stability.

It’s advisable to confirm whether any bilateral agreements between Montenegro and your home country could impact property acquisitions. Consulting with a tax and legal professional can be beneficial in navigating the complexities. Our firm offers comprehensive tax and legal services in Montenegro, among other areas. Contact us, and we would be delighted to arrange an introductory meeting with you.

High areas for real estate investment and prices in Montenegro

The Bay of Kotor – stands out as the most exclusive area in Montenegro and has emerged as a popular tourist destination in recent decades, thanks to its breathtaking natural scenery and profound cultural heritage. Recognizing its significance, UNESCO has safeguarded the Bay of Kotor since 1979. Investing in the Old Town of Kotor is one of the most profitable investments considering the high number of tourists this area attracts. Buying real estate in Kotor comes at an average price of approximately from 2 842 Euro to 3,900 Euro per square meter.

Tivat – has become a top tourist destination in Southeast Europe. Notably, projects such as Porto Montenegro and Lustica Bay have contributed to its popularity. Additionally, Tivat’s international airport enhances its investment appeal. In Tivat, real estate prices vary. Starter homes are around €2000-€3000 per square meter, while luxury beachfront properties can go from €7000 to a whopping €10000 per square meter.
Budva – is a regional heavyweight and attracts the most tourists due to its old town, amazing coastline, and lively social atmosphere. Furthermore, Budva offers a diverse range of property types. Purchasing a property in Budva will cost you around €2,500 to €4,000 per square meter.
Kolasin – is just 30-minute drive from the Podgorica international airport and a scenic 1 hour and 30 minutes from the coast. It’s drawing attention from international and local investors due to its strategic location, excellent infrastructure, connectivity, stunning nature, and a modern ski center that ranks among the best in the region. You can get a family house for €100,000 to €200,000. For a fancier chalet-style villa, expect to pay between €300,000 and €500,000. Modern apartments range from €1,200 to €1,500 per square meter.

Return on Investment

After buying a house or apartment, investors can earn money by renting it out while they’re not in Montenegro, making a return on their investment. Certain high-end residential and tourism projects in Montenegro guarantee buyers an annual return on investment ranging from 4% to 8%. Furthermore, when assessing the potential returns it is important to consider the specific locations within the country.

Investing in a property during the development phase offers the advantage of securing a more favorable price compared to post-construction prices. Additionally, there’s the potential for an annual return on investment once the property is completed, given the thriving tourism industry in Montenegro, which promises even greater growth prospects.

Incentives for ownership and investment on real estate for foreign citizens in Montenegro

The Montenegrin government has implemented various law regulations and incentives for those who invest in real estate in the country. Investing in real estate in Montenegro allows you to become a resident through the country’s residency-through-investment scheme.

The Montenegrin constitution protects and emphasizes the private property, ensuring that foreigners, including investors, enjoy equal legal protection.

The Law on VAT prescribes exemption from VAT for the supply of products and services for the construction and equipping of a hospitality facility with the rating of five or more stars. For a hospitality facility, the tax rate may be reduced for a hospitality facility which is category 3 up to 15%; category 4 up to 30%; category over 4 up to 70%.

For real estate used in agricultural production, processing, packaging, or manufacturing by owners or users registered as agricultural producers, legal entities, or entrepreneurs in Montenegro, there’s a potential tax reduction. This reduction can be up to 90% of the tax liability, compared to the standard rate set by law, for properties actively utilized in these agricultural activities.

Companies engaged in innovation activities can reduce real estate tax by 50% if the property is used for scientific research, innovative programs, or projects, as well as innovation infrastructure. This reduction applies while the company holds the status of a beneficiary of incentive measures.

In conclusion, the Montenegro real estate market has seen significant growth, driven by diverse offerings and attractive locations. Foreigners can freely buy various property types and the country also offers a variety of incentives for local and foreign citizens.

If you require assistance or have any inquiries regarding our services, we warmly invite you to reach out to our office. Our dedicated team is here to provide you with expert guidance and support tailored to your specific needs. Whether you’re seeking information, need professional advice, or wish to discuss how we can assist you further, please do not hesitate to contact us.

הפוסט Real Estate In Montenegro הופיע לראשונה ב-Nimrod Yaron Albania.

Inheritance, estate, and gift tax in Montenegro

BananaBlitz — Sun, 28 Jan 2024 16:32:07 +0000

Montenegro, a small yet wonderful Balkan country, has gained recognition for its natural beauty, cultural richness, and developing economy. It becomes crucial for individuals to understand the country’s tax system as they explore opportunities in Montenegro. This article aims to offer a detailed summary of Montenegro’s inheritance, estate, and gift taxes.

Montenegro has implemented a tax structure characterized by relatively low rates. This strategic approach by the Montenegrin government is primarily aimed at achieving a significant policy objective: to entice foreign individuals and businesses to relocate and invest in Montenegro, thereby leveraging the country’s potential opportunities.

In the context of inheritance, estate, and gift taxes the rates can fluctuate depending on the relationship between the deceased and the heir. Gifts and inheritances given to spouses, children, or parents are exempt from taxation, aligning with the family-oriented tax policies of the nation. For all other cases, both gifts and inheritances are subject to a uniform tax rate of 3%, simplifying the tax structure for these transactions. This tax policy reflects Montenegro’s efforts to maintain a straightforward and equitable tax system.

Montenegro law on tax administration burdens the obligation of the heirs of a deceased person to pay the deceased person’s tax liability up to the value of inherited property, proportionally to their share in inheritance. Meanwhile the Law on Tax Turnover of Immovable Property charges the heir with the responsibility to pay the tax turnover of immovable property. The tax turnover applies also in the case of gift or other forms of acquisition of immovable property.

However, if the heir decides to renounce their inheritance or transfer it to another co-heir during the probation process, they will be exempt from paying the tax for the act of renunciation or transfer. On the other hand, the individual receiving a gift or acquiring immovable property without compensation is liable for the tax on property turnover. Similarly, when immovable property is obtained through a whole-life support contract, the responsibility for the tax falls on the acquirer of the property.

It is important to mention that Montenegro now offers digital wills, enabling people to create wills electronically. These digital documents must be stored either with a notary or digitally to ensure their validity. Additionally, Montenegro has updated its inheritance tax laws to be equitable and more reflective of the estate’s value, easing the financial burden on heirs.

Non-Montenegrin residents enjoy the same property inheritance rights as Montenegrin citizens, allowing them to easily buy, own, and pass on real estate in Montenegro. The country actively welcomes foreign investment in real estate, making it straightforward for non-citizens to establish and pass on Montenegro property to their families.

If you inherited real estate or received gifts in Montenegro and you are looking for more information about the applicable procedure and taxes, our office has the resources and contacts to offer precise information and support that will help you navigate through the process. Reach out to us for assistance.

If you have inherited property or received gifts in Montenegro and seek guidance on the relevant procedures and taxes, our firm offers comprehensive support. We possess the necessary expertise and connections to provide accurate information, assisting you in efficiently navigating the complexities of this process. For tailored assistance and detailed insights into Montenegro’s property and gift tax regulations, please feel free to contact us. We’re here to help you manage these matters with ease and confidence.

הפוסט Inheritance, estate, and gift tax in Montenegro הופיע לראשונה ב-Nimrod Yaron Albania.

Business Activity in Montenegro

BananaBlitz — Mon, 15 Jan 2024 15:20:50 +0000

Montenegro's Economic Growth

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.

הפוסט Business Activity in Montenegro הופיע לראשונה ב-Nimrod Yaron Albania.