Company Formation in Montenegro

Advantages of Company Formation in Montenegro

1. Opportunity to Obtain a Residence Permit Immediately. Company formation in Montenegro allows you to relatively easily obtain a residence permit in the country based on employment. After being employed in the newly established company, you can immediately apply for a residence permit.
2. Low Minimum Share Capital. The minimum share capital for a company in Montenegro is just EUR 1, which helps avoid unnecessary expenses during company formation.
3. Fast, Simple, and Affordable Registration. Company formation in Montenegro is quick and cost-effective. The registration process takes about 5 days, and the cost is significantly lower than in many other European countries. Additionally, a company can be registered remotely using a power of attorney.
4. Low Tax Rates. The corporate income tax rate in Montenegro is only 9%.
5. No Residency Requirements for Shareholders. A company can be registered with at least one director and one shareholder. There are no residency requirements for directors or shareholders, meaning the company can be established by individuals of any nationality.

Legal Forms of Companies in Montenegro

In Montenegro, there are several legal forms of companies suitable for different types of business. The most common forms are:

1. Limited Liability Company (D.O.O.)
   This is the most popular and convenient type of company in Montenegro, characterized by limited liability for its members. Members are not personally liable for the company’s obligations beyond their contribution. The minimum share capital is just EUR 1.
2. Joint Stock Company
   The share capital of a joint-stock company is divided into shares. This form is suitable for large businesses and is rarely used by startups. The minimum share capital must be at least EUR 25,000.
3. Limited Partnership
   A limited partnership must have at least one general partner and at least one limited partner. General partners actively manage the partnership and have personal liability for its obligations, while limited partners do not participate in management and are liable only up to the amount of their contribution.
4. General Partnership
   In a general partnership, partners have personal liability for the obligations of the partnership. The Partnership Agreement plays a key role in regulating internal relations among partners.

Company Formation in Montenegro: the Procedure

The registration procedure in Montenegro begins with preparing the necessary identification documents for all company participants (check with our specialists), as well as the following information:

• 2-3 potential company names in order of preference;
• The structure of the future company (who will be the director, shareholder, beneficiary);
• The type of business activity.

After collecting all necessary documents and information, company formation in Montenegro can be immediately initiated. The full process, from gathering documents to producing the final corporate package, includes the following steps:

1. Checking and selecting a company name;
   The name verification process takes a few hours.
2. Preparing forms and documents for submission to the Registry;
   At this stage, a power of attorney is prepared and notarized, and primary interaction with the registering authority takes place.
3. Company registration procedure;
   The registration process in Montenegro generally takes about 5 days from the submission of all required forms and documents to the Registry.
4. Preparation of corporate documents and production of company seal (if necessary);
   This stage involves preparing the full set of documents necessary for the company’s operation.
5. Notarization and apostille of documents (if necessary).
   Notarization takes about 2-3 days, and apostille takes 5-7 days.

Corporate Taxation in Montenegro

As in many countries, corporate taxation in Montenegro largely depends on the company’s residency status. Resident companies are subject to a global taxation principle, while non-resident companies are taxed territorially.

Corporate Income Tax

Montenegro applies a standard corporate income tax rate of 9%, one of the lowest in Europe. The tax is levied on profit (income minus expenses) earned both within Montenegro and abroad.

The 9% corporate income tax rate applies to both local and foreign companies. However, the amendment to Montenegro’s Corporate Income Tax Law effective from January 1, 2022, introduced progressive rates: 9% on profits up to EUR 100 000, 12% on profits from EUR 100 000.01 to EUR 1 500 000 and 15% on profits above EUR 1 500 000.

Dividend Tax

Dividends paid between Montenegrin residents are subject to withholding tax at 9% and are applicable to both residents and non-residents (unless otherwise specified by a tax treaty).

Capital Gains Tax

Capital gains are not taxed separately; they are subject to the standard 9% corporate income tax rate.

VAT

The standard VAT rate in Montenegro is 21% and applies to most goods and services. Reduced rates also exist: for example, a 7% rate applies to certain medicines and food products.

A zero VAT rate applies to goods for consular and diplomatic use, services in maritime and international transport, and other specific cases.

Preparation and Submission of Reports in Montenegro

Preparation and submission of reports is a mandatory requirement for doing business in Montenegro. After company formation in Montenegro every business must maintain accounting records, prepare annual reports, and pay taxes.

The reporting period generally coincides with the calendar year, after which three months are allocated for the preparation and submission of reports. A penalty is imposed for each day of late submission.

If the company is VAT-registered, it must also prepare separate VAT reports, which are submitted monthly.

Conclusion

Montenegro offers highly favorable conditions for doing business and is especially suitable for entrepreneurs who want to obtain a residence permit based on employment and business creation. Low tax rates, a simple and fast registration process, and no residency requirements for directors and shareholders—combined with beautiful natural surroundings—make Montenegro an ideal place for business and living.

How We Can Help

• Guide you on possible company structures and select the most suitable option for your business;
• Assist with the preparation and submission of forms to the Registry;
• Support the company registration process;
• Provide a registered address and secretary services;
• Prepare and certify the company’s articles of association (if necessary);
• Produce company stamps;
• Assist in obtaining a residence permit.