Business Start-up Costs in Montenegro
Business Start-up Costs in MontenegroUpdated on Saturday 17th April 2021
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Starting a business in Montenegro implies various costs. With a vast experience in the legal field, our law firm in Montenegro can help foreign entrepreneurs establish the types of companies they want to and can also guide them on the cost of each procedure.
In numbers, 10.4 businesses are registered by 1000 people every year and the country is 8th in Europe in terms of start-up business density. This totals to approximately 4,513 new company registrations per year. No wonder opening a business in Montenegro can be a very good decision. If you decide to open your company, it would be important to know the business start-up costs in Montenegro.
Our law firm in Montenegro has assisted many clients in starting their businesses. If you want to open a company in Montenegro and need assistance, our law firm is at your service for complete support in registering any business form.
The steps for opening a business in Montenegro
There are several steps to be completed in order to start a company in Montenegro and each is subject to a specific cost. These steps are:
- drafting and notarizing the company’s statutory documents – the costs associated with this procedure depend on the city the company will be located in;
- in the case of foreign companies setting up branches and subsidiaries the cost related to translating their incorporation documents must also be considered;
- making a seal for the company is mandatory and is subject to specific fees;
- the opening of a bank account is another step to complete – this is usually free of charge;
- the registration of a company with the Trade Register and the tax authorities will also imply certain fees;
- the company must also register with the Pension Fund, the Employment Bureau and the Health Fund.
Please keep in mind that these fees are usually subject to changes, therefore we recommend you ask our lawyers in Montenegro about them during your first meeting or discussion.
What are the main costs related to starting a Montenegrin business?
Most of the times, each step of the company formation procedure is subject to a fee. However, Montenegro is one of the European countries where several steps are free of charge, which is what makes this country so appealing for starting a business in.
Here are the main costs a local or foreign investor should consider when starting a company in Montenegro:
- the preparation of the incorporation documents which consists in drafting and notarizing the Articles of Association and which costs around 30 euros;
- the registration and publication fees which must be paid with a Montenegrin bank and which cost around 20 euros;
- the company’s seal which is subject to a fee ranging from 30 to 40 euros;
- another fee which must be paid is the administration fee with the municipality which costs around 3 euros;
- foreign citizens and companies must also have their identification papers, respectively Articles of Association translated and notarized which will cost around 30 euros.
Other aspects which should be considered in terms of costs related to starting a business in Montenegro are the share capital and the bank account opening.
Below, our Montenegro lawyers explain in detail the cost associated to each procedure when starting a company in this country.
You can also read about the business start-up costs in Montenegro in the infographic below:
Documents required for starting a Montenegro company
In order to understand the complete costs of starting a company in Montenegro, we present you the documents which need to be provided with the Trade Register. Among these, the Articles of Association and the founding agreement which must be drafted and signed by a public notary. Then, the registration form which is issued by the Trade Register and a list comprising the names of shareholders, managers, directors and other company officers together with their personal information must also be submitted. It is also important to note that the applicant must submit the receipts indicating the fees related to each of the step of registration procedure.
When it comes to registering a private or public company in Montenegro, the Memorandum and Articles of Association must contain specific information, however, they are two different documents. They are usually drafted at the same time, so when considering the business start-up costs of the Montenegro company the costs associated to these papers is calculated for both of them and not separately.
The Memorandum provides for the decision of starting a business, while the Articles of Association usually cover the following aspects:
- the details of the shareholders and directors (names and addresses and if they are natural persons or legal entities);
- the legal address of the company (the registered address must be established in the Montenegrin city in which the company operates);
- detailed information on the share capital (number of shares issued, their value and the division among the shareholders);
- information about the company’s main object of activity and other activities (where available);
- information about the general meeting held annually and other shareholder agreements (if necessary).
The cost related to the preparation of the statutory documents depends on the number of pages, however, where translation of personal information is necessary, this cost should also be included.
An important aspect to consider related to the costs of starting a company in Montenegro is that corporate shareholders are also permitted. In this case, the parent company’s Articles of Association could require translation.
In most cases setting up a sole proprietorship or partnership is cheaper, however, the benefits of registering a limited liability company are more if it comes to registering debts.
Our lawyers in Montenegro can help foreign investors who want to set up companies in this country. We can also help those need to decide on the best legal structure based on their needs.
Foreign investors who want to simplify the business registration procedure can rely on our lawyers in Montenegro to complete it by giving one of our lawyers a power of attorney. Once completed, the business owner can come to Montenegro and start the activities.
Costs related to the preparation of the incorporation documents
One of the most important costs when opening a business in Montenegro is associated with the drafting of the company’s statutory documents – the Memorandum and Articles of Association. In the case of foreign investors, their identification papers must also be notarized, while in the case of foreign companies setting up branches or subsidiaries in Montenegro, the translation and notarization of their Articles of Association and Certificates of Registration is also mandatory. These fees vary from city to city; however, Montenegro is one of the cheapest Eastern European countries when it comes to starting a business.
Another aspect which needs to be considered is that when starting a business under the form of a sole proprietorship, there is no need to draft incorporation documents for such a structure. In the case of partnerships, the partnership deed must be drafted, case in which the costs are lower.
No matter the type of company you decide to open, our Montenegro law firm can help you register it.
Costs related to the registered address of a company in Montenegro
One of the important costs related to starting a business in Montenegro implies the registered address of the business. This address can be obtained through a lease agreement or by purchasing a virtual office in one of large cities in Montenegro. The important aspect to note is that a virtual office is much cheaper than a rented location. Our law firm in Montenegro can help with virtual office services and make you a personalized offer based on your needs.
Share capital requirements in Montenegro
Even if this not an actual cost associated to the registration of a Montenegro business, it is an important aspect to consider when choosing the business form to use. We mention from the beginning that there are no share capital requirements when it comes to setting sole traders and partnerships, while for a private limited liability company the minimum amount to be deposited in a bank account is 1 euro. For a joint stock company, on the other hand, the minimum paid capital is 25,000 euros. This amount must be deposited upon the incorporation of the business with the Trade Register in Montenegro.
Even if there are no legal requirements for providing specific amounts of money when starting a sole trader, partnership or private company, the business owner must consider the amount of money necessary for starting and maintaining the company and deposit it.
Our Montenegro lawyers can also help with business consulting services for foreign investors to know how to build a company in optimum conditions.
Bank account opening in Montenegro
The fees related to the opening a corporate bank account when starting a business in Montenegro are not high, however, they differ from bank to bank. Even if it might seem tempting to go for the bank offering the lowest fees, our lawyers advise foreign investors to choose a bank that offers benefits for a long term. Future company owners should consider the services attached to the corporate bank account, if it is possible to convert various currencies and make money transfers abroad, but also to consider the interests of the chosen bank in case the company ever needs financing.
If you need more information on how to choose a Montenegro bank to work with, you can ask for pointers from our lawyers.
Cost of business registration in Montenegro
All start-up companies in Montenegro must register with the Central Register of Business which is under the control of the Tax Administration. The cost of starting a business in Montenegro will depend on the type of business entity that will be opened. For most of the business entities, a registration fee of 10 euros must be paid with the Central Register of Business. For entrepreneurs, there is an additional payment of 12 euros for the publication of its registration with the Official Gazette. This is the same for limited liability companies. For joint stock companies, the registration fee is 50 euros plus a publication fee of 12 euros.
Our lawyers in Montenegro can give you more details on the amount of registration fee you need to pay. They have also listed down the types of companies one can incorporate in Montenegro:
- Sole trader;
- General partnership;
- Limited partnership;
- Joint stock company;
- Limited liability company;
- Part of a foreign corporation.
Licensing fees for starting a business in Montenegro
Apart from the fees and costs associated with registering the company, businessmen must also consider the licenses and permits to be obtained with specific authorities in the industry the business will operate in. These fees are usually established by the respective authorities.
Industries which require inspections from the municipality will also be subject to certain fees, however, these are usually low.
Our Montenegrin lawyers can guide foreign investors who open companies here on the various licensing procedures for different types of companies.
Other costs for business start-ups in Montenegro
Aside from registration fees, there are other costs when opening a business in Montenegro. One is the compliance of the initial capital requirement for joint stock companies. The Commission for Securities requires an initial capital of 25,000 Euros to open of a joint stock company in Montenegro. Another cost is making a stamp and seal for your business, which is used to track records for the company. The fee for a stamp and seal is normally 20 euros. Our Montenegro law firm can give you more information regarding these payments.
Costs for foreign companies setting up operations in Montenegro
The number of foreign companies interested in operating in Montenegro is on the rise, thanks to the low corporate tax imposed here. The main options for these companies seeking to complete commercial activities are the branch office and the subsidiary. The costs related to starting a branch or subsidiary in Montenegro usually depend on the size of the business, the space it needs to unfold its operations and capital to be injected in the company.
For example, there is no share capital imposed when starting a branch office in Montenegro, however, this structure is usually employed for operating in the financial sector, case in which, specific laws must be respected in terms of share capital requirements.
No matter the type of company one decides to set up in Montenegro, our law firm is at the disposal of foreign investors with tips on how to reduce the business start-up costs.
Open a company with the help of our lawyers in Montenegro
Our Montenegro law firm is made up by professionals ready to answer your questions related to starting a business in this country. We can also help with the whole incorporation procedure with the Companies Register. If you need help in drafting the company’s Articles of Association, our local lawyers can help. You only need to grant us a power of attorney so that we can complete the procedure on your behalf.
We can also help those who want to buy shelf companies and thus avoid the additional costs related to starting a Montenegro business from scratch. You can also watch our video:
Why start a business in Montenegro?
Montenegro is a very appealing business destination for most investors from European countries even if the country is not a member of the European Union yet. According to the World Bank, Montenegro ranks quite well in terms of business registration and costs associated, with an average score of 86.7 points which is higher than the regional average score of Europe and Central Asia which is 90.5.
The average time for starting a business in Montenegro is 10 to 12 days, so if you need help, our law firm is at your disposal for full support.
Make sure that all business start-up costs in Montenegro are paid when you open your company. You can get in touch with our attorneys in Montenegro to help you with the incorporation procedure.