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

1. 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.
2. 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.
3. 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.
4. 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.