A Comprehensive Guide to Company Registration in Montenegro
Montenegro has come a long way since the early 1990s. While it now has a fantastic reputation as one of Europe’s top tourist hotspots, it’s also an increasingly popular business hub.
In 2023, there were more than 54,000 businesses in Montenegro – a rise of 18.4% from 2022. Make no mistake; Montenegro is drawing investment from around the world, and there hasn’t been a better time to get involved.
Entrepreneurs, business owners, and managers from around the world are moving their operational bases to Montenegro in order to take advantage of the country’s booming commercial sector. But to do so, they need help with company registration in Montenegro. While it’s pretty similar to processes in the rest of Europe, there are some key differences.
If you’re contemplating setting up a company in Montenegro, we’ve got some crucial advice for you, so let’s get right into it!
Who are we?
We are a professional accounting firm with over 7 years of experience, based in Budva and providing services across the Montenegrin coast, Podgorica and North. We specialize in comprehensive financial services, offering expert accounting, tax consulting, and business advisory tailored to meet the unique needs of both local businesses and international clients. Our team is committed to accuracy, reliability, and delivering solutions that help your business thrive in Montenegro’s market. Order company registration now. We will assist both at the initial stages of company registration and residence permit acquisition, as well as providing ongoing support for your business in the future. Our team ensures that you have all the necessary guidance and expertise to navigate the legal and administrative processes in Montenegro, making your business journey smooth and stress-free. From starting your business to long-term advisory services, we are here to support your growth and success.
The Different Business Types in Montenegro
Congratulations! You’ve decided to set up a company in Montenegro, and you can look forward to a bright and lucrative commercial future. But before you get carried away, there are some legal issues to consider – the most important of which is company registration in Montenegro. To ensure your business venture runs smoothly and profitably, you must choose the most appropriate legal entity available.
Sole Ownership or Individual Entrepreneur (Preduzetnik in Montenegrin)
Whether you’re a one-person operation, a freelancer, or a very small business, the sole ownership approach to company formation in Montenegro is the quickest and easiest. It’s worth noting, however, that this model leaves you personally liable for any debts your business accumulates.
However, the biggest problem with this business model is that it limits you to an income of just 24,000 EUR.
Limited Liability Company (Društvo sa Ograničenom Odgovornošću or DOO in Montenegrin)
This is now the most popular way to register a company in Montenegro. You will need at least one shareholder, but it’s possible to have 30 shareholders listed as co-owners. Each shareholder is only liable for an amount up to their capital contribution. This is just one of the reasons why more and more foreign investors and entrepreneurs are choosing this route.
Joint Stock Company (Akcionarsko društvo in Montenegrin)
If you are starting a relatively large business with a large amount of capital, or you think that your business will grow quickly from the outset, it might be best to choose the joint stock route. You will need at least two shareholders with at least EUR 25,000 of capital. Decisions about the company’s direction must be taken at Annual General Meetings by the board of directors. All shareholders have limited liability.
Offshore Subsidiary (Poslovnica)
This is a good option for foreign investors who own a company in a different country and wish to expand into a new territory while ensuring the new business remains part of its parent organization.
Representative Office (Predstavništvo)
You can set up a representative office in Montenegro if you plan on performing market research or certain promotional activities. However, you won’t be able to participate in any direct commercial activities. This might be a good option if you’re exploring the financial feasibility of company registration in Montenegro.
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Starting a business in Montenegro requires planning and a lot of preparation. To ensure you stay on the right side of local laws, complete the form below to order services or request a detailed consultation with an expert.
Creating the Memorandum and Articles of Association in Montenegro
Once you’ve decided to set up a business in Montenegro and chosen your legal entity, your first task will be to create a Memorandum and Articles of Association. These vital documents formally register a company in Montenegro – allowing you hire employees and trade legally.
The Montenegro Company Register requires the Articles of Association to be filed to ensure the following information is fully declared and a matter of public record:
- Details of the company’s shareholders and directors
- A legal address in Montenegro for the company’s official headquarters
- Details of the initial share capital – and how it’s divided between shareholders
- The types of shares issued
- Details of the company’s primary function or activity
- Details of associated functions and activities
- Details of the annual AGM
- Details of other formal agreements made between shareholders
It’s VITAL that you get expert help to draft Articles of Association when you’re setting up a company in Montenegro. You will also need to get the document notarized by a professional. A Montenegro company formation specialist will guide you through every step of the process.
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The Documents Needed for Montenegro Company Formation
There’s just no getting around it – you will need to complete a lot of forms and submit a range of documentation when setting up a company in Montenegro. To ensure you stay on the right side of the law and don’t encounter any costly delays, here’s a basic list of the documents you’ll need:- Memorandum and Articles of Association – notarized by a recognized professional
- A list of all shareholders
- Specific details of the executive director
- A legal name for your company
- A formal trading address and a nominated company representative
- Written consent from all board members
- A receipt from your company registration
There’s a lot to take in if this is your first company formation in Montenegro, which is why enlisting the services of a company start-up consultancy is vital.
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Starting a business in Montenegro requires planning and a lot of preparation. To ensure you stay on the right side of local laws, complete the form below to order services or request a detailed consultation with an expert.
Appointing Shareholders and Directors to Your Business in Montenegro
If you own or part-own a legal company in Montenegro, you’re a shareholder, and your interests are protected under Montenegrin law. You or your colleagues become shareholders by either providing initial capital or buying shares once the company formation process in Montenegro is complete.
Shareholders can be individuals, corporate entities, locals, or foreign investors. Both public and private companies require at least one shareholder. However, if you’re starting a public company, you will also need to appoint an auditor.
The law states that every company requires at least one director – who must either be a permanent resident of Montenegro or a citizen. The shareholders are collectively responsible for appointing directors by voting. However, it’s also possible for a shareholder to be appointed as a director.
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Company Tax for a Business in Montenegro
You will need to register for Montenegro’s company tax, which is usually charged at a rate of between 9 and 15%. Depending on the type of business you’re starting, or the market you’re entering, your business may be eligible for a company tax holiday. Make sure you get advice on company tax matters from an expert – although the rules are very simple in Montenegro, involving a flat rate.
You will also need to register for VAT, which is charged on the sales of services or goods at a rate of 21% on turnovers of 18,000 EUR – paid monthly. If your turnover is less than 18,000 EUR, you’ll be charged the lower rate of 17%.
While the company tax regime in Montenegro is simpler than in other European countries, it is still governed by a rather complex set of rules and regulations. It is vital that you consult a qualified and accredited accountant in Montenegro to ensure you are paying the right types and amounts of tax. Depending on the type of business you choose and your annual turnover, you may or may not be required to pay value added tax (VAT) too.
Please Note: Businesses must create a company seal and request a USB token to allow accountants to send reports directly to The Tax Service.
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The Company Incorporation Process in Montenegro
- Choose the type of legal entity that’s best suited to your business.
- Complete the initial registration documents and send them to the Montenegro Company Register (Memorandum and Articles of Association)
- Secure and declare the minimum share capital required under Montenegrin law.
- Obtain your tax identification and VAT numbers
Enlist Company Formation Services in Montenegro Today
Starting a business in Montenegro requires planning and a lot of preparation. To ensure you stay on the right side of local laws, complete the form below to order services or request a detailed consultation with an expert.
Opening a Montenegrin Business Bank Account
You’re well on your way to becoming a successful business owner in Montenegro. But before you can start receiving money and paying your bills, you’ll need to open a business bank account.
Each bank has its own process and requirements for opening an account, so it’s best to seek the advice of a company formation consultant in Montenegro before going ahead. However, in most cases, you’ll need to provide the following information/documentation:
- Bank account application forms
- Articles of Association
- Company registration documents
- Contact details of nominated company representatives
- A contract that details the share capital
- Specimen signatures of all nominated representatives
- The company tax registration certificate
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Recruiting Personnel When Starting a Business in Montenegro
All the main facets of your company in Montenegro are in place. You’re now a legal entity and free to begin trading. But before you can do that, you may need to hire staff. The Ministry for Labor and Social Welfare is the government department responsible for employment law – and the enforcement of rules. You will need to register with the department before you invite your first recruit on board.
You will need to adhere to all the laws and rules that apply to employers in Montenegro, which include:
- The right to an employment contract
- A minimum of 20 days of annual leave
- Payment of the minimum wage at the time
- Parental leave
- Protection from unfair dismissal
- Access to grievance procedures
- The right to a safe working environment
If you’re new to Montenegro, it’s a good idea to seek advice from a business law expert or an HR professional before you start the recruitment process.
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The Cost of Montenegro Company Registration
The total cost you incur when you open a company in Montenegro will depend on the specific needs and nature of your operation. That said, there are some administrative costs you’ll need to take into account when creating your initial business plan.
- A company registration fee – which can range from 10 EUR to around 50 EUR, depending on the legal entity you chose
- The cost of a virtual office (if required) – approximately 75 to 100 EUR per month
- The initial share capital you require – there’s no legal minimum in Montenegro
- Additional costs of other documents preparation – more than 300 EUR.
If you’re a novice or new to Montenegro, it’s best to leave the process in the capable hands of a company formation company. If you do, you can expect to pay between 500 and 2000 EUR – although this can vary. You’ll also need to think about paying an accountant or bookkeeper to set up your financial systems, which may cost between 100 and 200 EUR.
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Securing Montenegro Residency
If you need to give your new company in Montenegro around-the-clock attention, you may need to secure legal Montenegro residency. To qualify for a residence permit as a foreign national, you’ll need to first register your company in Montenegro. The easiest and fastest way to do this is by setting up an LLC. You will also need to be a registered director of the company and actively involved in its day-to-day operations.
Once you’re officially registered as a director of a Montenegrin business, you can apply for a one-year residence permit. You’ll then need to re-apply each year. However, once have legally held Montenegro residence status for five years, you’ll be eligible to apply for permanent residency.
Other way to get Montenegrin residence is to buy a flat or a house. Our colleagues will help with it professionally.
Earlier if you wanted to fast-track your way to permanent residency through citizenship of Montenegro, you could be eligible for Montenegro’s Citizenship by Investment scheme, also known as the CBI program. You could apply if you have at least 100,000 EUR to invest in a government development program and 250,000 to invest in an approved real estate project. As long as you were at least 18 years old and had no criminal record, you could be accepted if you can meet the financial criteria. But now this program is closed.
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Get Expert Guidance on Company Registration in Montenegro
So, as you can see, company formation in Montenegro involves a lot of initial research, form-filling, administration, and due diligence. There’s just too much at stake to approach the process without the help of locally based experts.
Talk to a company formation expert in Montenegro today, and make sure your new venture gets off to the best possible start.