Holding Company in Montenegro - Legal Help from Our Lawyers
Holding Company in MontenegroUpdated on Wednesday 27th October 2021
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A holding company does not engage itself in buying and selling goods; instead, its primary purpose is to manage the subsidiaries independently. A holding company purchases and owns the majority of stocks in other companies. This company is also known as a parent company because it usually owns several combinations of companies and assets under its umbrella. But it is not always necessary for the holding companies to be multinational, covering every sector from food and beverages to the real estate; it can also cover one business by dividing it into various companies split by the department to minimize the risks of loss.
If you intend to invest in Montenegro, the opening of a holding company is an important step for increasing the security and the good management of your business. By relying on our law firm in Montenegro you can benefit from legal advice and documentation elaboration preliminary to the formation of a holding company in Montenegro.
Why open a holding company in Montenegro?
According to the legislation in Montenegro, the holding company is defined as a structure that holds shares from several other companies. If you want to invest in Montenegro and become a holding company, what you have to do is to buy a specific amount of assets or stocks from local companies, regardless of their legal structure. Therefore, as a holding company, you will own completely or partially several subsidiaries, which might renounce to any previous power of decision, or on the contrary, might negotiate a certain degree of independence.
If your holding company owns a subsidiary in proportion of 100%, then you have full property rights on the technology of the subsidiary. On the other hand, in the meantime, your responsibility increases. You have to take into consideration both the pluses and minuses of a total ownership when you enter negotiation with other companies.
As a holding company in Montenegro you will have as well a significant influence on the management of the subsidiaries. You can have power of decision regarding the direction of the subsidiaries, and even if you won’t intervene in the effective production strategy of the goods, you can watch and supervise the growth and development of the subsidiary. The companies that you hold will remain responsible for the daily organization, activity and internal operations. Our lawyers in Montenegro can offer further clarifications regarding the regulations concerning holding companies in this jurisdiction.
One of the reasons for which many investors choose to open a holding company in Montenegro is the covering that this type of structure provides in case of loss. The eventual bankruptcy of the subsidiaries does not enter the responsibility of the holding company.
Assets owned by a holding company in Montenegro
You might want to know what type of assets you can own as a holding company in Montenegro. The following list contains the available options:
- Owning shares in several enterprises;
- Purchasing stocks in limited liability companies or partnerships;
- Properties, lands or buildings ;
- Copyright, patent and trademarks;
Requirement of a bank account for a holding company
The holding companies require different bank accounts to manage the accounting records. Therefore, these accounts should be distinguished from the subsidiary companies. This separation is necessary to maintain a legal distinction between the subsidiaries and the holding companies. Our litigation lawyers in Montenegro can help you open a bank account in this country.
Besides this, if you face problems regarding debt collection in Montenegro, our skilled lawyers can also provide you with legal assistance in debt collection in a swift manner.
Can a holding company act as an LLC?
Yes, a holding company can be a limited liability company (LLC). The limited liability companies are popular because their managing structure is easier to handle than the corporations. The flexibility in an LLC's regulations allows using this company structure in different ways. For instance, a holding company owns other companies and valuable assets, like real estate, intellectual property or equipment. So, a holding company does not engage in any business of its own, which means a holding limited liability company operates safely, and subsidiaries directly engage in the risky business operations. A holding company makes regulations easier among the unlike business and may act as a personal bank if required. It is also called:
- Private and real estate holding company;
- Investment property company;
- Asset company;
- Parent or umbrella company.
Even a limited liability company owned by a single person can act as a holding company. If you want your LLC to act as a holding company in Montenegro, you can get in touch with our lawyers. They can provide you with detailed legal assistance regarding different types of companies in this country. Our Montenegrin expert lawyers can also provide you with the legal backing to open a company here.
How do holding companies make money?
This is the most asked question, that how holding companies make money? As aforesaid, holding companies act as a bank if required, and they also move extra capital among their several subsidiaries. The holding companies charge fewer fees and interest on subsidiaries for this capital than the unaffiliated banks. The holding companies also charge the operating costs to the subsidiaries in exchange for the back-office services like IT or accounting, etc. Such companies also earn capital by buying and selling the assets; that is why it is also called an asset company. If you are interested in opening a holding company in Montenegro, you can rely on the legal assistance of our lawyers. Furthermore, you can also trust the legal backing of our lawyers if you want to purchase a property. They will provide you with comprehensive guidance regarding buying properties in Montenegro.
Taxes in Montenegro
If you want to start a company, you are highly encouraged to choose Montenegro as your company destination. It is one of the European Union countries that implement the lowest tax rates in the region. Please find below the taxes in Montenegro:
- The corporate profit tax (CPT) in Montenegro is 9%;
- In Montenegro, the general withholding tax rate is 9%;
- Municipal Montenegrin government may implement a payroll tax of 15% on employee’s salaries.
Contact our lawyers in Montenegro if you are interested to know about the tax exemptions in this country. Our lawyers will guide you in detail if you are facing any hurdles in compliance with the tax regulations and setting up a holding company in Montenegro.
You are also welcome to get in touch with our lawyers if you want to immigrate to Montenegro. They can provide you with legal assistance from visa application to the end process.