Montenegro

The corporate tax rate in the Republic of Montenegro is 9%, which is one of the lowest in Europe. It should be noted that the cost of labour is one of the lowest in Europe: the average net monthly salary is approximately 524 euros.

It is worth mentioning that the government is actively seeking entry into the EU, as this would give a large number of preferences to the state. In this context, all municipal and governmental structures are being actively reformed, making it easier to do business.
In recent years, the Republic of Montenegro has pursued an active foreign policy aimed at improving its terms of trade. As an example, a free trade agreement with important international markets such as CEFTA countries (Bosnia, Macedonia, Albania, Montenegro, Moldova, Kosovo). In addition, Montenegro became a candidate for accession to the European Union in 2010.

6 simple steps to purchase a company

  1. choosing a country

  2. choosing a bank

  3. payment (by any method)

  4. sending documents

  5. company registration

  6. bank account opening

Main advantages

From all the advantages that open up to the founders when registering a company, it is worth noting in particular:

  1. Montenegro is included on the OECD white list, not on the FATF black list.
  2. Pleasant investment policy conditions for all. The areas that are not accessible to foreign founders include the sale and manufacture of weapons, doing business near the border and in national nature reserve areas.
  3. Low crime rate.
  4. Low inflation (below 1%).
  5. Well-educated and inexpensive labour force (within the EU).
  6. An annual audit is not compulsory for LLCs.
  7. Montenegro remains a jurisdiction with one of the lowest VAT rates. In Croatia, for example, VAT is 22%, while in Albania and Slovenia it is 20%.
  8. Montenegro is not a member of the OECD, has not signed a multilateral agreement on the automatic exchange of information by the competent authorities of the respective countries, and has not declared its accession to the automatic exchange of information.
  9. The minimum share capital of an LLC is 1 euro.
  10. Registering a business in Montenegro is one way to obtain a residence permit in the country.
  11. Montenegro's Law on Foreign Investment guarantees foreigners equal rights and conditions to register and operate a company.

Forms of company registration:

According to Montenegrin legislation in force, it is possible to register your business in the following legal forms:

Entrepreneur;

Suitable for small businesses. Generally, it does not cost much to register and set up a business. Characterised by a simplified form of reporting. Minus: The businessman is liable for debts not only to the extent of his contribution, but also to his own property, because the sole proprietor is an individual.

A simple partnership (OD);

A special feature of this legal form is that the partners (individual or legal entity) are jointly and severally liable for the partnership's obligations.

A limited partnership (KD);

A special feature of this legal form is that general partners (individual or legal entity) are fully jointly and severally liable for the obligations of the partnership, while limited partners are liable for the obligations of the partnership within the amounts of their contributions. The limited partners' deposits may be in money, goods or value rights.

Ordinary joint stock company (AD);

The liability of the founders of an organisation is limited to the size of their shares. There should be more than one participant and up to 50-100 people. The company's legislative body is the shareholders' meeting, which decides the most important issues, such as amendments to the articles of association, reorganisation, bankruptcy, distribution of profits, etc. The Executive body is the Director (Manager). The minimum share capital is 25 thousand euros.

Limited Liability Company (DOO)

The registration procedure is relatively short, taking around 10 days, depending on the number of members (one or more) and the individual conditions described in the Articles of Association. The minimum share capital is 1€. This form of ownership is the most common. It involves submitting reports to the tax service both quarterly and annually.

Features of company registration:

The legal framework governing the incorporation of companies in Montenegro is represented by the Law on Business Organisations The specifics of the incorporation procedure are as follows:

  1. The duration of the process usually does not exceed 14 days
  2. The smallest value of share capital, according to the statutory regulations, may be as little as 1 euro. However, the amount can also be increased if you wish. A joint-stock company must have a share capital of 25,000 euros or more
  3. The only documents required from the founder are his or her passport
  4. It is also compulsory to submit several variations of the company name for subsequent verification by state registry officials
  5. It is required to state the company's legal address and the sphere of business, which will be its priority.
  6. An executive director is a mandatory requirement.
  7. Provided that the role of manager is assigned to a foreigner, it is possible to obtain a work permit upon registration

Taxation features

It is compulsory for a company to keep accounts in Montenegro even if it has no income. VAT is as high as 19% - provided that the turnover for the year exceeds the amount of 18,000 euros. A reduced rate of 7% applies to the production of basic consumer products, medical products and instruments, teaching aids, books and monographs, public transport services, and other supplies. The VAT rate on exports is 0%. Income tax is 9% - for both individuals and legal entities.

There is no difference in the payment of taxes and the receipt of guarantees between local and foreign businessmen. This ensures equality for all market players and makes them competitive on the international stage. If there are no tax payments, the company is closed by the authorities. It is also worth noting that taxes in Montenegro are significantly lower than in Europe as a whole.

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