Why you should start a business in Montenegro

This article will discuss why you should open a business in Montenegro, its advantages and requirements, as well as the most popular business structures in Montenegro that are favored by foreigners.

Montenegro

- one of the most underrated countries in Eastern Europe. It has everything that investors and entrepreneurs need in a jurisdiction - low tax rates, favorable business environment, strategic location along the Adriatic coast and much more. In addition, the country is also a candidate for EU membership.

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Montenegro Country Overview

In its current form, Montenegro is a very young country, as its citizens voted to split the State Union of Serbia and Montenegro in 2006. The population is projected to be 628,281 in 2023. More than 150,000 of them live in the capital Podgorica, and about a tenth of them in Cetinje, the old royal capital. Cetinje is located at the foot of Mount Lovcen, about 1,749 meters high, which gave its name to the country.

Climate in Montenegro

Montenegro is a popular tourist destination due to its Mediterranean climate. Dry summer months are followed by cool rather than cold winters, except in the northern mountains where temperatures can drop to -2°C during the holiday months.

Economy of Montenegro

Tourism has replaced agriculture as a significant industry in Montenegro. The Euro has been the country's currency since 2002, and the World Bank has labeled Montenegro as one of the fastest growing economies in the Balkans. The country currently has EU candidate status and continues to strictly comply with all EU directives. Because of this, it can be said that Montenegro will become a member of the EU in a few years. When this happens, any investments in the country will bring great profits.

Advantages of opening a company in Montenegro

EU candidate Montenegro is a member of NATO and a candidate for EU membership. This is expected to happen in 2025. However, the country's economic stability means that you can enjoy market access to around 800 million consumers thanks to free trade agreements. Montenegro's Adriatic coastline and proximity to the Mediterranean region has earned it the nickname "Gateway to the Balkans". The country also uses the euro as its currency, making it a convenient corporate base for Europeans.

Tax jurisdiction

Montenegro has one of the lowest tax rates in Europe. Personal and corporate taxes are levied at progressive rates ranging from 9% to 15%. The non-taxable part of wages is €700, the lowest among European countries. In addition, non-residents pay taxes only on income earned in Montenegro.

Easy to set up a company

Setting up a company in Montenegro is quick and simplified. The country offers many tax breaks and preferences, especially for investors and entrepreneurs, with the establishment of businesses and free trade zones in certain areas. For example, if you set up a manufacturing company in an economically underdeveloped area, you can get a profit tax exemption for up to eight years. In addition, you will have affordable and qualified local English-speaking staff available for hire.

Bilateral agreements on avoidance of double taxation

The country has double taxation treaties with countries such as France, Germany and the UK. Montenegro is also a leader in attracting foreign direct investment in the region.

Path to temporary residence in Montenegro

You can obtain a residence permit in Montenegro by opening a company. Another way to obtain temporary residence in Montenegro is to purchase real estate. However, setting up a business no longer qualifies you for Montenegrin citizenship.

Requirements for setting up a company in Montenegro

The most common forms of companies in Montenegro are limited liability companies (LLCs) and joint stock companies (JSCs). The standard practice is that the main applicant must submit a certificate of no criminal record and a valid passport.

Establishment of a limited liability company in Montenegro

The Law on Business Organizations defines the establishment of a limited liability company. The steps include drafting the founding documents, including the decision to establish, opening a bank account and registering employees with the tax administration. The initial capital for setting up an LLC must be at least €1.

Establishment of a joint stock company in Montenegro

LLCs can be transformed into joint-stock companies. But if foreign investors start with a JSC, the steps they need to take are similar to setting up an LLC. The minimum initial capital required for a JSC is at least €25,000.

Is the country ideal for business?

Montenegro has all the necessary elements for a business-oriented jurisdiction. It has one of the lowest tax rates in Europe, numerous tax incentives, an educated and skilled workforce, EU candidate status, a strategic location along the Adriatic coast and much more. In addition, setting up a company can make you eligible for temporary residency in the country if you want to go that route. The country is an ideal summer vacation destination with a beautiful Mediterranean climate, stunning beaches and scenic views.

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Frequently asked questions about setting up a company in Montenegro

Is Montenegro a good place to start a business? Yes. Montenegro is a magnet for foreign direct investment due to its business-oriented economy and low corporate tax rate. Montenegro is a safe country for investment and enjoys excellent economic freedom and monetary stability. In addition, the country is a candidate member of the European Union and strictly adheres to EU directives.

Does Montenegro have citizenship through investment? No. Foreign investors are no longer granted citizenship through development projects. It was possible to obtain Montenegrin citizenship and Montenegrin passport until December 2022 by investing in less developed areas. You could join the Montenegrin citizenship program by investing in real estate. Investment opportunities ranged from investing €250,000 in development projects in the northern or central region of Montenegro to €450,000 in the coastal region.

Is Montenegro a tax paradise? No. Montenegro is not a traditional tax haven. However, the country has one of the lowest tax rates in Europe, ranging from 9% to 15%.

How much does it cost to invest in Montenegro? You can set up a new LLC for as little as €1. We can help you with much more than setting up a company in Montenegro and other countries. Our comprehensive plans include everything from citizenship opportunities and identifying business opportunities in the local market. Let us ease your bureaucracy headaches.