Invest in Montenegro
Invest in MontenegroUpdated on Tuesday 16th March 2021
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Montenegro became an independent state in 2006. Since then, its government has molded it for economic growth, employment, and export of goods and services. This is a big reason why you should invest in Montenegro. The government also recognizes the areas for economic growth that need improvement. Foreign investors who wish to open a company in Montenegro, can benefit from the policy according to which there is no difference in the treatment of foreign and domestic corporations. This means that they can repatriate their profits without any limitation or restriction.
Our law firm in Montenegro has helped foreign investors with repatriating their profits. You can rely on us for setting up a business in any industry you find suitable for your future activities in Montenegro.
Starting a business in Montenegro
Our Montenegro lawyers are knowledgeable of the requirements for starting a business in the country. For starters, registration costs are very low. For joint stock companies and limited liability companies, it would only cost them 10 euros to have their businesses registered. The country also requires only at least one shareholder and director in order to incorporate. For joint stock companies, the mandated capital is only 25,000 euros while limited liability companies only need to have a capital of 1 euro. Corporate income tax is only rated at 9 percent. Investing in Montenegro will not cost you much.
Foreign investors can set up various types of companies in Montenegro, as the Company Law provides for the same rights and obligations of the overseas and local entrepreneurs interested in having their own businesses here.
The following structures are available for foreign investors in Montenegro:
- - the sole proprietorship which is a good option for starting a small business in order to get acquainted with the market;
- - the partnership which is a preferred option for those who want to have a Montenegrin partner;
- - the private limited liability company which is a quite popular business form across Europe;
- - the joint stock company which is also common in other European states and which is dedicated to large operations;
- - branch offices and subsidiaries are available for foreign companies seeking to establish operations in Montenegro.
The local legislation offers plenty of opportunities to those interested in setting up businesses here which is what make Montenegro so attractive for foreign investors.
If you have any questions related to the types of companies available for incorporation, our Montenegro lawyers can help you choose the right structure in accordance with your needs and size if your business.
Economy of Montenegro
For 2019, the Republic of Montenegro recorded a GDP of 4.9 billion euros, which is equivalent to a growth of 3.6% from the previous year. It also recorded an FDI or Foreign Direct Investment of $453 million for 2019. This shows that foreign businessmen are attracted to invest in Montenegro. You can visit our Montenegro law firm to avail of more information about the economy of the country.
Investment opportunities in Montenegro
Foreign businessmen who intend to invest in Montenegro have many business sectors to choose from when starting a business here. Here are some investment opportunities in Montenegro:
In 2014, Montenegro recorded a total of 1.3 million tourists that visited the country. With a mild Mediterranean climate, the country has 240 sunny days each year. This is one of the reasons why the World Travel and Tourism Council predicted that investment in Montenegro in the field of tourism is going to be very profitable in the coming years.
This is a good investment sector in Montenegro for businessmen who have large capitals. The government of Montenegro is awarding a concession to exploit the coal in the basin of Maoce and to construct a thermal power plant. The concession is to last for 45 years.
3. Business zones
These are certain areas in the country where only specific business activities are allowed to operate. This is good for small and medium businesses that are engaged in light industries that cause minimal damage to the environment such as manufacturing and service activities.
4. The maritime sector
One of the most appealing industries in Montenegro is the maritime one with a focus on the yacht registration sector which is one of the most advantageous in Europe. Foreign investors and citizens who have a passion for yachting activities and want to turn them into a business should know that the entry into Montenegro’s waters is based on a multiple-entry vignette.
Also, from a taxation point of view, maritime and tourism services are imposed with a 7% tax rate, while vessel chartering services are imposed with a 0% VAT.
If you are interested in boat registration, our Montenegro law firm is at your disposal with assistance in such matters.
Montenegro’s taxation system is very appealing
One of the concerns of many entrepreneurs when starting a company in another country is taxation. From this point of view, Montenegro is one of the most appealing European states to set up a company in because:
- it has adopted the Euro as a national currency despite of not being an European Union state;
- the corporate tax is applied based on tax residency, and thus registering a company here will provide for a low tax rate;
- the rate of the corporate income tax in Montenegro is 9%, which is one of the lowest in Europe;
- the withholding taxes applied to dividend and interest payments are also set at a rate of 9%;
- Montenegro provides for one of the lowest real estate taxes in Europe – 0.1% to 5% depending on the value of the property;
- the value added tax is imposed at a standard rate of 19%, while a reduced rate of 7% is levied on certain goods and services.
Apart from these, Montenegro has signed over 40 double tax treaties under which foreign investors can benefit from tax reductions, exemptions or credits in order to avoid the double taxation of their earnings.
As mentioned above, Montenegro has adopted the Euro in order to ease its accession to the EU. Most importantly, the legislators have also integrated many of the EU directives in their national laws in order to comply with the EU standards, and this only one of the many reasons why Montenegro is worth considering as an investment destination.
Our attorneys in Montenegro can offer detailed information on the tax legislation applicable in this country.
Montenegro’s double tax treaties
At the moment, Montenegro has more than 40 double tax treaties with countries all over the world. These cover a wide range of income that are covered by the provisions of these agreements. Among these, personal and corporate income, but also on real estate and other types of incomes generated in Montenegro and the other signatory members.
Our tax lawyers in Montenegro are at your service with advice on the legislation applicable from this point of view. We can also provide guidance on how to access various incentives granted by the government.
Montenegro’s new Citizenship by Investment program
Montenegro is one of the most modern European countries and keeping in line with the latest trends which helps both the economy but also those interested in setting up businesses here is definitely in the interest of the government. That is why in 2018 the Citizenship by Investment Scheme was enabled.
Under this program, those who want to relocate to Montenegro must comply with one of the following requirements:
- - invest 250,000 euros in designated underdeveloped areas of the country;
- - invest 450,000 euros in developed areas of Montenegro;
- - pay a government fee of 100,000 euros apart from the investment choice;
- - a guarantee of 15,000 euros is also required no matter the investment choice.
The benefits of this program is the possibility of obtaining citizenship in Montenegro in no more than 6 months, the applicant can bring other 4 family members with them, and it is also one of the cheapest citizenship by investment programs in Europe.
You can rely on legal support from our lawyers if you want to invest in Montenegro and obtain citizenship by investment here.
Montenegro’s strong points for attracting foreign investments
Montenegro is a very appealing jurisdiction for those seeking to invest in a country that is not part of the European Union but offers similar advantages to the Community Block. Even so, what is worth noting about Montenegro is that it accepts euro as a currency considering it is preparing to enter the EU in the next accession wave.
Montenegro does not abide by EU regulations only, but also those of other international bodies, among which the World Trade Organization and the Organization for Economic Co-operation and Development (OECD).
Even if this small state attracts investors from European countries, those from outside Europe can also find incredible business opportunities here and can be determined to invest in Montenegro by one of the following:
- the simple business registration process that can be completed in a matter of days;
- the equal treatment of foreign entrepreneurs who can access most industries in the countries;
- the low corporate tax rate applicable to companies with headquarters in Montenegro;
- the workforce which is made of young and educated individuals;
- the economic stability which provides for safe business environment;
- the great infrastructure which connects Montenegro with important European countries.
There are many reasons that can convince foreign entrepreneurs to invest in Montenegro, however, it is useful to note that the country is a great choice for those looking for an emerging market from where they can branch out in the entire Europe.
If you decide to open a company here, our lawyers in Montenegro are at your service with details about the laws that can help you run your operations as soon as possible.
The workforce – a good reason to invest in Montenegro
Employment costs are one of the reasons that attract foreign investors in countries where they are low, and this can be said about Montenegro where there is a balance between the educated labor force and costs and taxes associated to hiring them.
The local authorities focus on education and training of employees, which is why Montenegrin citizens who are in the work field are well prepared, have high computer literacy, and also a good command of English in order to communicate with foreigners.
When interested in a jurisdiction which relies on qualified personnel, Montenegro can be one of the best choices.
You can rely on the support of our Montenegro law firm for assistance in employment-related matters. Also, we can draft work contracts and can help you bring foreign personnel for your company here.
Montenegro’s infrastructure is modern and well-developed
One of the reasons for investing in Montenegro can be the infrastructure which can respond to the most demanding requirements of all types of traders.
Following the example of other European states, the Montenegrin authorities have diverted large amounts of money to investment in infrastructure with this exact purpose: attracting foreign investors.
The good quality of road and railway transportation routes have already attracted large numbers of investors so far, which is why if you are considering Montenegro, you can take this step and inquire on the main options under which you can start a business.
Apart from road transportation, Montenegro also offers great flight connections through two large airports, the one in the capital, Podgorica, and the one in Tivat. Montenegro is also connected to the Italian city of Bari through a ferryboat service.
The ease of buying a property in Montenegro
Relocating to another country also implies purchasing a property. From this point of view, Montenegro can be seen as the perfect location because of the easiness of obtaining a residence permit. This can be acquired through employment or the citizenship by investment scheme, both options leading to the possibility of becoming owners of houses or apartment flats in Montenegro.
If you want to buy a property here, our Montenegrin lawyers are at your service for the completion of the transaction.
Foreign Investment Law of Montenegro
If you want to invest in Montenegro you should know that one of the most important features of the Foreign Investment Law of Montenegro is the definition of a foreign investor. Under the law, a foreign investor is a foreign legal entity whose headquarters is abroad. It can also be a foreign citizen or a Montenegro citizen who has residence abroad or has stayed out of the country for more than one year. A foreign investor can also be a company that is established by a foreigner or one that is at least 25 percent foreign owned. Another important feature of the law is the allowance and easy repatriation of profits by foreign investors. The law also provides for guarantees against expropriation and waiver of customs duty for equipment that are imported for the operation of business. Our Montenegro law firm has helped many clients who were dealing with issues relating to the foreign investment law.
Montenegro Law on Business Organizations
This law governs the establishment of companies in the country. A significant principle under this law for foreign investment in Montenegro is the equal treatment of foreign companies with domestic corporations. This means that foreign investors can own 100% of a domestic corporation and can even own lands in the country with the same rights as the locals. The law also provides for the establishment of foreign company branches in Montenegro. These are branches of companies that are formed and registered outside of Montenegro but conduct business within the territory. Our law firm in Montenegro has assisted many clients in establishing branch offices in the country.
Foreign Trade Law of Montenegro
This law governs the import and export of goods to and from the country. The Foreign Trade Law of Montenegro provides for equal treatment of imported goods and domestic products. This means that as a foreign investor, you will be able to import materials for your business without paying more on duties and taxes than when you purchase a domestic product. This is beneficial for your business. Our Montenegro lawyers can guide on how this process works.
If you plan to invest in Montenegro, please contact our local attorneys. We will provide you with the information you need and we will handle the company incorporation procedure step by step.