Montenegro has become a promising new immigration destination for Russians and immigrants from CIS countries. The republic is attractive not only as a place for a comfortable life, but also for starting a business. In recent years, the economically promising country has developed a favorable business climate. Investing in your own business through the purchase of an existing enterprise or the relocation of a company serve as the basis for long-term legalization. Expats issue the first card (Privremeni boravak) for a year, extend it an infinite number of times or get permanent residence after 5 years.
The advantage of Montenegro is not only in its advantageous geographical location. Relocators choose a country because of the simple way to register a business, access to the European market, and a simplified tax regime. Due to the lack of requirements for the amount of authorized capital, any foreigner with a business plan in hand has the right to launch a startup. Entrepreneurs do not need to document the success of a business in order to extend a residence permit, or submit annual profit reports.
The concept of private business in Montenegro
Opening a company is suitable for those who plan to conduct commercial activities, non-residents who create commercial organizations for legalization, as well as those who want to change their place of residence. Unlike other European countries, business start-up takes place here according to a simplified procedure.
IP
Representatives of small businesses register as private entrepreneurs (Preduzetnik). People work alone and bear full property responsibility. They are obliged to conclude client contracts and pay their salaries. The advantages are the possibility of sole disposal of income and simplified taxation. Registration of an individual entrepreneur takes no more than a week, and taxes are calculated based on actual turnover.
It is important to note that people working remotely can be in the country both as sole proprietors and self-employed. For legalization on these grounds, you can use the Montenegrin Visa Digital Nomad program.
Limited liability company
In Montenegro, the form of LLC or Limited Liability Company (DOO) has become widespread. A commercial organization is established by one or more legal entities (up to 30 people) with a capital of 1€. The minimum size eliminates high fees when registering a company. The property divided into shares is increased by expanding the membership. DOO is suitable for various types of activities, ranging from manufacturing to intermediary services.
Joint stock company
Public and non-public joint Stock Companies (Joint Stock Companies) with an authorized capital of € 25,000 or more are created by agreement of legal entities and individuals, regardless of nationality. Shareholders and managers own blocks of shares and have the same powers in the distribution of dividends. This form is relevant for the industry, construction, and export sectors.
Partnership
A limited partnership or partnership with limited liability and minimum business requirements is created on the basis of capital mergers, agreements on establishment under one tax number. There are no requirements for the amount of the authorized capital. Participants have the same rights. Shares are distributed according to contributions, and can be transferred to others with the approval of the rest.
Limited Partnership
A general partnership (KD) or partnership with unlimited liability is allowed to be established by several persons. A simple structure helps to attract any number of participants for business. Some are considered general partners, while others have limited powers. Business is managed by full comrades, marketing and revenue are handled by commandeers. Profits are distributed according to investments. The amount of capital depends on financial capabilities.
A branch of a foreign company
This form is chosen by subsidiaries without autonomous legal status. Part of a foreign company opens structural divisions in Montenegro. Managers act on behalf of and on behalf of the CEO and perform tasks within the framework of the company’s activities.
Legal framework
The Law “O privrednim drustvima” has been adopted in the country to manage the activities of commercial organizations. It regulates registration, restructuring, liability for obligations, and other issues related to work. The regulation “On Commercial Companies” lists not only the organizational forms of commercial structures, but also the requirements for applicants. To obtain a business residence permit, foreigners are required to:
- own half of the authorized capital;
- open a corporate account;
- get a job as a manager, earn a salary of at least 450€;
- keep records, pay taxes on time;
- have a deposit of 3,650€ for current expenses;
- rent or buy a house;
- have a positive reputation and a visa history.
Required documents
To submit a dossier to the Register of Business Entities, originals and translations with a notary seal are required:
- scans of all participants’ passports;
- Draft Charter;
- legal address;
- the constituent certified agreement;
- list of founders (registration application PS-01);
- PDV-1 PR form for VAT;
- extract from the clearing depository society;
- report on planned business activities;
- payment receipt for the fee.
In the application, applicants additionally indicate the name, QUEDs, residential address, and contact details.
The process of opening a company
Before registering a commercial organization, you need to study the laws or entrust the procedure to a corporate international lawyer. This increases the chances of undergoing the procedure the first time. To start a business, you need to:
- Choose the legal form, the code of economic activity (Djelatnost) in accordance with the classifier for the digital designation of the business.
- Determine the unique name of the company, check it for a match in the state register of Montenegro, agree on the Charter and determine the founders.
- Prepare the documents and certify them in the Main Court, get certified scans at the municipal or notary chamber, paying 32€. The process takes 2-3 days.
- Personally or through a licensed lawyer, submit a dossier for company registration in the Central Register of Business Entities. The decision to issue a certificate is made 5 days in advance.
- Get the taxpayer’s (PIB) and company’s (PDW) number, order the production of a corporate seal.
- Visit the bank to open an account, conduct financial transactions on the basis of statutory documents. Depending on the type of activity, issue a license.
Terms and cost
The legal procedure, together with the collection of documents, takes up to 10 days. The cost of registering a company is low. Registration according to the standard scheme costs 600 €. The administrative fee for the opening of a Joint Stock Company is 40€, plus 8€ for an entry in the register of legal entities. Companies with other legal forms give only 5€. Foreigners and residents also pay small fees for entering into the register of business entities. The publication of the news in the Official Gazette costs 3€. The remaining expenses are related to the translation of documents, legal services, and commercial plans.
Applying for a residence permit
Family members can apply for the Privremeni boravak card together with the main applicant. Documents are translated and notarized, diplomas are nostrified. Package for submission to the Migration Ministry of the Ministry of Internal Affairs at the place of residence:
- a foreign passport;
- personal statements;
- registration address;
- diplomas/certificates of education for all applicants;
- criminal record certificates for persons 16+;
- marriage certificates, metrics for children;
- documents on the ownership of an apartment or a lease agreement;
- extract from the Montenegrin bank;
- medical insurance certificate purchased in Montenegro;
- a set of documents for the company;
- certificate of the applicant’s position as director;
- work permit from the Employment Bureau;
- payment of a fee in the amount of 40-60€.
After submitting the dossier, expats take fingerprints and pay for the issuance of cards. The cost of the Borawak: 5€ plus 2€ for registration. Verification of papers and registration of a residence permit takes up to 3 weeks. The residence is granted for a year. By law, the status can be extended many times. An application for an extension is submitted one month before the expiration of the current permit, and a fee of € 20 is paid. After 5 years, many people apply for permanent residence. To obtain permanent residence, relocants aged 15-65 years are required to obtain a state-issued language certificate. After another 5 years , according to art. 8 “On citizenship” naturalized foreigners are issued passports. Second citizenship is prohibited in the country.
Legal and tax obligations
The fiscal regime in the country is one of the most competitive in Europe. Low financial burden allows entrepreneurs to increase operating profit. Companies in Montenegro pay taxes at progressive and corporate rates of 15%. They are the same for foreign and Montenegrin entrepreneurs. The accounting and reporting standard (O racunovodstvu) is used for accruals. The regulation “O porezu na dobit pravnih lica” has been adopted for calculating corporate income tax of legal entities. For individuals/legal entities with incomes up to 100,000 €, the rate is 9%.
If this amount is exceeded, tax inspectors add 12%. If the capital is 1,500,000€, it increases proportionally. Entrepreneurs pay € 177,000 plus 15%. The amount of value added duties is regulated by the principles of the Sixth Directive of the European Union and the local law “O porezu na dodatu vrijednost”. It depends on the field of activity and varies from 0 to 21%. Minimum rates are applied to manufacturers of food and pharmacology, essential goods. In order to avoid double taxation (DTCs), the state has concluded 43 agreements with European and Asian countries. Private entrepreneurs are required to submit declarations by the end of April. For legal entities, the deadline has been extended by a month. Income taxes for the past year are paid by the latter until April 1.
Recommendations
Starting a business in Montenegro is an opportunity to immigrate, integrate into European society and earn good money. The only problem of business immigration is the requirement to permanently reside in the Republic. However, for those who move with their family and want to assimilate, it does not matter.
Before business immigration, it is important to study the market and find in-demand niches. The most profitable and promising in Montenegro: tourism, hotel /restaurant business, rental of water transport. High incomes are generated by energy, the food industry, and the IT sector. Many are opening schools and educational centers.
It is better to hire a lawyer to choose the constituent form and prepare documents. It will help you understand the requirements and speed up the registration process. Although the business registration procedure is simple, delays may occur due to bureaucratic difficulties. Participation in professional and Russian-speaking communities will help establish business contacts, find a place for an office and housing, and first clients.
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