Starting a business in Montenegro – all you need to know

When it comes to company formation Montenegro has a lot to offer. With the declaration of independence in 2006 Montenegro moved towards  a business-focused economic system, which has been transitioning to a market system since then.

This led to the privatization of almost 90% of Montenegrin state-owned companies, and this country became rather appealing for foreign investors from European countries, giving them unlimited Montenegro business opportunities to choose from.

According to statistics, 10.4 businesses are registered by 1000 people every year, giving a total of approximately 4.513 new firm registrations per year. Montenegro is 8th in Europe when it comes to start-up business density, and it should not be surprising that starting a business in Montenegro is a growing trend.

In the following post, we will take you through the process and conditions for starting a business in Montenegro and show you why company formation in Montenegro can be a splendid and cost-effective idea. If you were wondering how to open company in Montenegro – continue to read and find out everything about it!

Business meeting

Company Formation Montenegro – Why Starting a Business in Montenegro Is a Good Idea?

Montenegro has been a popular business destination for years now, and that was recognized by the Montenegrin government which introduced the Citizenship by Investment Programme in 2018, intending to encourage and facilitate foreign direct investment.

This so-called economic citizenship allowed easy access to Montenegrin citizenship which is a mandatory requirement before starting a business in Montenegro. The Montenegrin government worked hard to position its country as the best option for foreign investments and business start-ups.

With the Citizenship Investment Programme investors were provided with many reliefs including low corporate tax rates and easy procedures before opening a company. Therefore, Montenegro company formation is made easier for everyone.

The average time for opening a business in Montenegro is 7 to 12 working days, and the tax system in this country is one of the most competitive in Europe. Corporate taxes are 9, and there are no surtaxes or minimum taxes for companies doing business in Montenegro.

Requirements for Montenegro Company Formation

From all of the above, It is easy to understand why Montenegro is a popular destination for foreign investments and starting a business.

To start your business within the borders of Montenegro, you will have to fulfill and deliver some requirements such as different types of agreements, documents, and registration fees, and here are the steps to do it:

#1 Check if your desired name for the company is available

First of all, before you start the procedure for Montenegro company formation, you should check if your desired name for the company is available. You can do this free of charge at www.crps.me.

#2 Certify the company’s founding agreements

After that, you will have to certify the company’s founding agreements at one of the Montenegrin public notaries. The cost of this procedure will depend on the number of pages and documents delivered. Following this, you will have to pay a Montenegro company register and publication fee at the bank.

#3 Submit the request application for company formation in Montenegro

Subsequently, you should submit previous documents with the request application and obtain a registration certificate, Tax identification number (TIN), Value Added Tax number (VAT), and customs authorization at the Central Registry of Business entities of the Tax Administration (CRPS).

Required documents for registration application are:

  • Article of Incorporation (Statute);
  • Founding decision (Agreement) signed by the notary;
  • Registration Form PS01: which covers a list of founders, members of a company, managers, and members of the board, if they are specified and:

(1) the first and surnames and any former names;

(2) their identification number;

(3) their residential addresses;

(4) their citizenship;

(5) details of any other directorships, memberships in limited liability companies or partnerships, or other management positions held and the name of an executive director; the name of the company, address of the seat of the company and address for receiving official correspondence, if they are different, and persons authorized to represent the company and information if the representation is collective or individual;

  • Confirmation of covering payment of registration and publication fees.

This is the most demanding step in starting a business in Montenegro. Every previously mentioned step could be finished within a day, however, since you will have to wait for the Central Registry of Business Entities to prepare and announce company formation, you will need a few extra days to conclude this step.

However, this procedure does not obstruct your other steps, so while you are waiting, you can continue your Montenegro company formation regardless of the publication date.

Passport

#4 Make sure you have the company’s stamp

To carry out company legal and other types of transactions you will be needing the company seal or stamp. You can order a seal in some of the special shops in Montenegro, where the cost varies from 20 to 40 Euros.

#5 Open a bank account within a Montenegrin banking system

The procedure for opening an account in a bank within a Montenegrin banking system for company purposes is not so complicated, and you will need to provide a valid passport and some other documents such as some recent documents with apostille, less than 3 months old for the bank to keep.

To open a corporate bank account, you will have to visit your local bank branch in person. The procedure is fast, and you can complete the whole process in less than a few hours.

#6 Take care of the registration within the Employment Bureau, the Pension and Health Fund

After you open the bank account, you will have to file a bank account certificate in addition to a single registration form (JPR) to register your employees with the Tax Administration. After that, the Pension and the Health Fund will be automatically recognizing your company within their system.

#7 Do not forget to notify the authorities about your business

So far, it is clear that when it comes to company formation Montenegro state is not that demanding. However, do not forget to notify the Municipality about your trading activities and pay an administrative 3 euro fee, at the official website of the Municipality.

Coast and mountain

Doing Business in Montenegro – What Type of Company Can You Establish?

For every foreign entrepreneur interested in investing and doing business in Montenegro, it will be useful to know which type of company he can establish. As we mentioned before, there are many business opportunities in Montenegro and all you need to do is to learn how to recognize and seize them.

The Foreign Investment Law launched recently by the Montenegrin government prescribes under which terms and conditions foreign investors can start business and companies in this country. It also thoroughly explains their rights and obligations.

The Foreign Investment Law recognizes 4 types of companies within its regulation:

  • Limited liability company;
  • Joint stock Company;
  • Montenegro branch office;
  • Montenegro representative office.

Limited liability companies are the most common types of business for foreign investors and entrepreneurs because it allows setting a single individual who can be a director and a shareholder at the same time, regardless of its nationality or residency.

Joint Stock Companies are designed for large businesses that require a starting capital of 25.000 euros and that amount has to be deposited into companies account during the incorporation.

The Montenegro branch option is intended for foreign investors which already own a company in another country. Other forms of business opened by the foreign companies are the subsidiaries and for research purposes, the representative offices.

Start your Business in Montenegro and seize the Montenegro business opportunity

Starting a business in Montenegro is a great opportunity to meet a beautiful Montenegrin nature and environment, and the Citizenship by Investment Programme will give you a once in a lifetime opportunity to obtain lifelong citizenship and a powerful European passport which will give you the opportunity to travel across the continent.

When starting a business in Montenegro, you will be in need of a temporary residence, and luxurious Montenegro real estate, within one of the new residential complexes at Boka Place, in a new urban quarter of Porto Montenegro, will give you the opportunity to enjoy a vivid European lifestyle and at the same time, the possibility to revitalize your body and soul in the natural environment of Montenegro.