Taxation of LLCs in Montenegro

Taxation of LLCs in Montenegro

Updated on Monday 27th February 2023

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taxation-of-llcs-in-montenegro.jpgThe limited liability company (LLC) in Montenegro provides foreign entrepreneurs an entirely tax-free income from all sources outside of this state, together with limited liability, close location to EU countries and a currency which is in EUR. 
In this article, our lawyers in Montenegro present the taxation system set in place for LLCs in Montenegro.

Tax rates for LLCs in Montenegro

Foreign entrepreneurs who do not reside in Montenegro are entirely exempt from taxation on the income for their LLCs which are set up in this country. However, they are taxed on their income which derives from local sources.
The corporate tax rate on the profits for LLCs in this country is set at 9%. As mentioned above, this rate is only applicable to Montenegrin residents. Our attorneys in Montenegro can provide more information related to this subject.
However, citizens of other states and those of the U.S. have to declare their profits to their local tax authorities.
The tax on capital gains for foreign citizens in Montenegro is 9% as well. This tax, though, is applied only on the sale of LLC shares which implicates non-residents.
Even though an LLC in Montenegro owned by a foreign entrepreneur is entirely exempt from income taxes, it has to, though, register with the tax authority and receive a tax identification number.
Our Montenegro law firm can assist entrepreneurs who are interested in setting up an LLC in this jurisdiction. In addition to the Montenegrin citizenship by investment program, the government implemented business-friendly regulations. In Montenegro, you can benefit from lower business taxes and a simple registration process. You will soon be establishing and expanding your business not only in Montenegro but throughout Europe. To learn about the procedure of acquiring citizenship, get in touch with our lawyers.

LLC dividend tax in Montenegro

The shareholders and owners of LLCs in Montenegro can be private persons or legal entities.
If the shareholder or the owner of an LLC in this country is a private person, the base for the dividend tax is represented by the gross amount of the distributed dividend, on which a 9% tax rate is calculated. 
This LLC dividend tax rate in Montenegro is withheld and paid by the legal entity on behalf of the shareholder or the owner, according to the Article 50 of the Law on Personal Income Tax. Our Montenegro lawyers can provide more information related to this law.
Moreover, the company which is distributing the dividends has to acquit a sur-tax, which is 15% or 13%, depending on the municipality of the legal entity.
If you have more queries about the taxes which are imposed on LLCs in Montenegro, or for any type of legal advice in this country, please feel free to get in touch with our law firm in Montenegro. We can also offer details on the Montenegro VAT and can handle the VAT registration procedure for your company.