Company Formation Montenegro
Updated on Tuesday 23rd February 2021
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BridgeWest provides company formation services in Montenegro. Our assistance includes numerous types of services and we can represent both local and foreign investors. You can also rely on our team of professionals for assistance on offshore company setup. In Montenegro, we can offer the following services:
- drawing up the articles of association that can be signed through power of attorney (Montenegrin laws require power of attorney for any public notary proceedings);
- drawing up documents for company incorporation in Montenegro - specimen signatures, identification papers copies, application form required by the Montenegrin Company Registration Office;
- arranging public notary proceedings (all procedures for company incorporation are done in front of a Montenegrin public notary);
- providing a registered office in Montenegro on demand - the registered office serves as headquarters for the company in Montenegro and it will be made public;
- setting up a bank account for the company in Montenegro - our consultants in Montenegro will help in setting up the share capital bank account, as well as a current bank account once the company is incorporated;
- recommending a Montenegrin accountant, as accounting services are needed for new businesses in Montenegro.
Types of companies in Montenegro
The Montenegrin limited liability company represents the most popular way to start a business in this country, as for its incorporation one needs a shareholder and a director, but it is also allowed to set up a board of directors. The founders of the limited liability company, who are named shareholders, can be represented by natural persons or legal entities.
This company type is very popular due to the fact that its founders do not have to subscribe any share capital, but even so, a corporate bank account has to be set up, as a mandatory incorporation requirement. Shareholders are held accountable for the company’s obligations and debts to the extent of their share contribution.
When opening a company in Montenegro that will be registered as a limited liability company, you must know that the registration process can last approximately two weeks. Opening a corporate bank account, which is a compulsory procedure for company formation in Montenegro, as well as for offshore incorporation, as all businesses, regardless of where they are registered, must have a designated bank account, can be a procedure with a lengthier duration, of approximately four weeks.
However, throughout all these procedures, our team of specialists can easily assist you and inform you on the required documents and the following steps that must be completed, so that you can successfully register this company type. It is also important to know that this company type can be fully owned by foreign investors. Companies registered here, including the limited liability company, fall under the regulations of the Chamber of Commerce.
Please know that even if the company can be set up by a single shareholder, the national legislation prescribes that the maximum number of shareholders the company can have is 30. Regardless of the number of shareholders, when preparing the documents for incorporation, it is necessary to present the shareholding structure of the company.
The Montenegrin joint stock company – the Montenegrin joint stock company requires a minimum share capital of EUR 25,000 that must be paid up before the incorporation. The company must be registered by at least one shareholder, who can be a natural person or another company. In this type of company, the shareholder will benefit from limited liability for the company’s debts and obligations, limited to their capital participation.
This company type can go through the process of company formation in Montenegro in a period of approximately 5 weeks, but this is given by the fact that this legal entity is the most complex structure regulated under the national law, and it is designed for the needs of large companies.
The Montenegrin branch, subsidiary or representative office - foreign companies are allowed to set up separate enterprises from the parent company, where the foreign company will be a shareholder in a Montenegrin company. Foreign businesses can also set up branches and subsidiaries in Montenegro.
Foreign investors who are interested in operating through a branch office or a representative office will be able to incorporate these structures in approximately 4 weeks. It is also worth knowing that these structures do not have a capital requirement, but in both cases, the liability for any debts or other obligations occurring in Montenegro will be the responsibility of the parent company abroad.
Besides the structures we have presented so far, foreigners must know that the national law also prescribes the possibility of registering a private entrepreneur (sole trader), the simple partnership (the partnership with unlimited liability) or the limited liability partnership. You can find out in-depth details on the characteristics of these structures from our team of consultants in company registration in Montenegro.
Taxation in Montenegro
The corporate tax in Montenegro is 9%. The standard VAT rate in Montenegro is 21%, but reduced rates of 7% and 0% apply to certain products. The withholding taxes on dividends, royalties and interests in Montenegro are 9%, unless reductions are applied due to double taxation agreements.
Although Montenegro is not a jurisdiction for offshore company formation, where numerous corporate and personal taxes do not apply, it can be said that the country benefits from a low tax regime, for the taxation of both individuals and companies. Those who want to relocate here or who want to open a company in Montenegro, may want to find out the following details on the tax system:
- the main tax rate on the income tax applied to individuals is of 9%, and it is charged for the income obtained from salaries, from property or from investments;
- there is also a rate of 11% charged on the income from wages, but the tax is applied only for gross salaries above the average monthly salary earned in Montenegro and only to the part of the salary that is above the average salary;
- in Montenegro, a company has to register for VAT on a voluntary or mandatory basis (the voluntary registration happens when the annual turnover is of maximum EUR 18,000 and the mandatory registration is necessary when the turnover is above EUR 18,000);
- the property tax in Montenegro ranges from 0.25% to 1% from the value of the property, and it is charged on a progressive system;
- companies can benefit from a tax holiday incentive, awarded in the first 8 years of operations and which can’t have a value larger than EUR 200,000 in the respective period of time, as long as the business is set up in a less favorized region of the country.
BridgeWest is also able to offer ready-made Montenegrin companies and VAT registration. Please contact us for more information regarding how to start a company in Montenegro. Our specialists can also assist you in other incorporation matters, such as offshore incorporation or registering an offshore bank account.
We also mention that Montenegro has become a very attractive destination in the last year for high net worth foreigners who wanted to obtained the citizenship in this country though the golden visa programs. If you need assistance on this topic, we invite you to address to our specialists for legal representation.