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Business in Montenegro | Important Note About Business in Montenegro

Business Entities in Montenegro

There are different types of alternatives for investors who  plan to establish business in Montenegro, for example:

  1. Single proprietorship
  2. General partnership
  3. Limited partnership
  4. Limited Liability Company
  5. Joint Stock Company

Our team of experienced staff will assist you with the right setup for your area of business and provide complete information to register the same with the Central Registry of Montenegro.

Limited Liability Company in Montenegro (Most Favorable)

The most beneficial and common format of setting up a foreign business in Montenegro is Limited Liability Company which is also known as (Drutvo s ogranienom odgovornou). In order to successfully incorporate the company in Montenegro, it requires only 1 Euro of share capital. An individual or entity can become the shareholder of the company for the business in Montenegro. The minimum number of a shareholder can be 1 but it should not exceed the maximum limit of 30. If the total amount of share capital exceeds the mark of 25000 Euros then the company will be considered as the Joint Stock company which has additional set of procedures to be followed. Successful incorporation of the business requires at least one director for the company.

Business in Montenegro | Joint stock company in Montenegro

For individuals and companies who can arrange large capital for investment, Joint Stock Company is the correct format for them. The Joint Stock company is also known as Akcionarsko drutvo in Montenegro native language. Unlike the LLC companies, the Joint Stock requires at least 25000 Euro as minimum share capital for the business in Montenegro. The company decisions are majorly taken in the presence of shareholders who also appoint the board of directors for managing the company. In order to audit the financial dealings and accounting books of the company, an auditor is needed for the annual audit. Our team of experienced staff managing the business in Montenegro process can provide you the complete information regarding the Joint Stock Company.

Sole proprietorship in Montenegro

The simplest to invest business in Montenegro is the sole proprietorship business model which requires no minimum share capital and the personal goods of the owners are also protected in case the company is unable to pay the debts.

General partnership in Montenegro

The General Partnership Business setup form in Montenegro is known as Ortako Drutvo in the native language. There is no defined limit for the minimum share capital of the company but the company can be registered with the Central Register of the Commercial Court if required however it is not compulsory. The registered company should include the company name, partner names and address of the company along with the residential addresses of the partners. Even the agreement can be signed depending on the business requirements but it is not compulsory.

In such business in Montenegro the liability of the company becomes the liability of the partners and the partnership setup dissolves in case the terms defined in the Article of Association expires by the life-loss of one of the partners or bankruptcy is filed by one of the partners.

Business in Montenegro | Limited Liability Partnership in Montenegro

The Limited Liability Partnership (LLP) business setup is known as Komanditno drutvo in the native language of Montenegro. The LLP Company must have at least two general partners and a limited number of silent partners. The general partners of the company are the ones who will be liable for the debts of the company while the silent partners are only liable for the limitation of liability that they have invested in the company. The limited partners or the silent partners will not have any decisional power or demand for the dissolution of the partnership. Similarly, the limited partners will also not have any say in addition of new partners nor any consent will be taken from them. The limited partnership cannot be dissolved on the death of the partner or bankruptcy. Foreign businesses planning to invest in Montenegro can also plan to open a branch office or subsidiary company in the country. Such type of business in Montenegro has different characteristic and the details of the same can be availed from our company formation expert team in Montenegro.

Regardless of which company setup form you choose, our team of experts in Montenegro can assist you will types of administrative and legal support required for business in Montenegro. You can contact our team at ________________ for customized offer.

Foreign investment

Due to flexible tax system and a stable economic system in Montenegro, it has the potential to become of the large investment hub. It has the economic freedom and a stable monetary system in place. The corruption and political justice as well as the organized crime rate is one of the major challenges for the FDI. However, the local and foreign company have the benefits and advantages to leverage the support from Montenegro government. As per the flexible company formation policy, foreign companies have the benefit of gaining 100% ownership in domestic companies. The profits and dividends of the local company can be shared without any limitations. As per the global standard of World Bank survey of 2018, the country Montenegro ranks at the 190th economy for offering ease of business. A major sector of investment where foreign companies can expect faster returns of investment are real estate, telecom, banking, energy and construction. Most of the foreign investors in Montenegro are from countries like Italy, Hungary, Denmark, Serbia, Cyprus and Russia.

Exchange controls

There is no foreign exchange control in business in Montenegro.

Transfer pricing

Transactions made between the related parties should be at arm’s length. The standard method of calculating the transfer pricing will be the uncontrolled price method, however, if the direct comparable is missing then the taxpayer will have to use the cost-plus or resale method of calculating the price.

Double Tax Treaty Relief

As per the double tax relief treaty signed by Montenegro with 42 countries for property and income, 36 are already in force and 6 are in process.

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