Business in Montenegro - opening and starting a business in Montenegro

When it comes to company formation, Montenegro has a lot to offer. With its declaration of independence in 2006, Montenegro moved towards a business-focused economic system which has been transitioning to a market system ever since. This has opened the possibility for new companies to start a business in Montenegro and do business successfully in terms of profit and market share. Many companies have also decided to relocate their business to Montenegro.

Montenegro’s independence led to the privatisation of almost 90% of Montenegrin state-owned companies. This gave foreign investors from European countries an unlimited number of Montenegro business opportunities to invest in. 

According to statistics, over 10 businesses are registered per 1000 people every year, giving a total of approximately 4513 new firm registrations each 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 article 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 successful and cost-effective idea. If you’re wondering how to open a company in Montenegro then read on to find out everything you need to know.

The average time it takes to start 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 tax rates are at 9%, and there are no surtaxes or minimum taxes for companies doing business in Montenegro. Montenegrin taxes are one of the lowest in the whole of Europe, making this beautiful Mediterranean country a great place to relocate and set up a company.

It is easy to see 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 fulfil and deliver some requirements such as different types of agreements, documents, and registration fees.

Here are the steps you need to cover:

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.

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.

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.

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.

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.

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.

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 they allow for a single individual to be a director and a shareholder at the same time, regardless of nationality or residency.

Joint stock companies are designed for large businesses that require a starting capital of 25.000 euros. This amount has to be deposited into the company’s account during incorporation.

The Montenegro branch option is intended for foreign investors who already own a company in another country. Other forms of business opened by a foreign company, either as a subsidiary or for research purposes, are a representative office.