Frequently Asked Questions
Montenegro Tax and Business Advantages
The standard corporate income tax rate in Montenegro is 9%. This rate applies to all resident and non-resident companies, except for those that operate in the banking and financial sectors, which are subject to a higher tax rate of 15%. The corporate income tax rate applies to the taxable profit earned by a business in a fiscal year.
Additionally, Montenegro offers various tax incentives and benefits to businesses, such as exemptions from customs duties on imported goods, reduced rates for social security contributions, and exemptions from value-added tax (VAT) for certain types of businesses.
It’s worth noting that tax rates and regulations can change over time, so it’s important to consult with a qualified tax professional or the relevant government agency for the most up-to-date information.
No, Montenegro is not generally considered to be a tax haven. While Montenegro offers a low corporate income tax rate of 9%, it is not typically classified as a tax haven by international organizations or tax experts.
Tax havens are typically countries or jurisdictions that offer extremely low or zero tax rates, as well as other features such as strict bank secrecy laws, lack of transparency, and ease of setting up shell companies. Montenegro, on the other hand, has implemented various tax reforms and regulatory measures in recent years to improve transparency and attract foreign investment while remaining compliant with international tax standards.
It’s difficult to say which EU country has the “best” tax regime, as this can depend on various factors such as the size and type of business, the industry, the tax objectives of the business, and individual circumstances.
That being said, some EU countries are known for having relatively low tax rates and business-friendly tax policies. For example, Ireland is known for having a low corporate tax rate of 12.5%, which has helped to attract many multinational companies to set up operations in the country. Estonia is also known for having a simple and straightforward tax system, with a flat tax rate of 20% for both corporate and personal income.
No, Montenegro is not a member of the European Union (EU). However, the country has been an official candidate for accession to the EU since 2010 and has made progress towards meeting the necessary criteria for membership.
Montenegro is currently in the process of negotiating its accession to the EU and has opened several chapters of negotiations. However, the accession process is a long and complex one, and it may take a few years for Montenegro to complete all the necessary steps and become a member of the EU.
“The standard VAT rate in Montenegro is 21%. There are reduced rates of 7% and 0%. VAT is charged on sale of goods and services, as well as on imports to Montenegro. Exports from Montenegro are not subject to Value Added Tax. Income from financial services, such as insurance and banking services, investment income are exempt from VAT.
Any business the annual turnover of which exceeds 18,000 Euro in 12 months is a VAT taxpayer (provided that he/she has a registered business or seat in Montenegro).”
https://www.worldwide-tax.com/montenegro/montenegro-vat.asp
Obtaining residency in Montenegro through company formation
The process for registering a company in Montenegro can vary depending on the type of business structure you want to establish and the industry you plan to operate in. However, generally speaking, the process for registering a company in Montenegro involves the following steps:
Choose a legal structure for your business. In Montenegro, the most common forms of business entities are a limited liability company (LLC) and a joint-stock company (JSC).
Choose a business name and check its availability with the Central Registry of Commercial Entities (CRPS).
Prepare the necessary documentation, which typically includes articles of association, a shareholders’ agreement (if applicable), and any other required permits or licenses for your industry.
Open a bank account in Montenegro and deposit the minimum required share capital for your chosen legal structure. For example, the minimum share capital for an LLC is €1.
Register your company with the CRPS and obtain a tax identification number (TIN).
Register your employees for social security contributions with the Montenegrin Tax Administration.
It’s important to note that the company registration process in Montenegro can be complex and time-consuming, and it’s recommended that you seek the advice of a qualified legal or accounting professional to ensure that you comply with all relevant laws and regulations.
It is not possible to convert a visit visa to a work permit in Montenegro. If you plan to work in Montenegro, you would need to apply for a work permit before arriving in the country.
To obtain a work permit in Montenegro, you would typically need to have a job offer from a Montenegrin employer, and your employer would need to apply for the work permit on your behalf. The application process can be complex and may require various supporting documents, such as proof of qualifications and work experience.
Obtaining a work visa in Montenegro could be challenging, especially if you are a non-EU citizen. The Montenegrin government has been working to reform its immigration policies and simplify the visa application process in recent years, but the process can still be complex and time-consuming.
To obtain a work visa in Montenegro, you would typically need to have a job offer from a Montenegrin employer and meet certain eligibility criteria, such as having the necessary qualifications and work experience for the position. Your employer would then need to apply for the work visa on your behalf with the Montenegrin Ministry of Foreign Affairs.
The cost of registering a company in Montenegro can vary depending on the type of business structure you want to establish and the industry you plan to operate in. However, generally speaking, the costs associated with registering a company in Montenegro may include the following:
Registration fee with the Central Registry of Commercial Entities (CRPS): €15 to €50, depending on the type of business entity.
Legal fees: this can vary depending on the complexity of the registration process and the services provided by the legal advisor.
Notary fees: Notarization of some documents may be required, and the fees can vary depending on the nature of the documents.
Share capital deposit: For an LLC, the minimum share capital deposit is €1, and for a JSC, it’s €25,000.
Yes, a foreigner can start a business in Montenegro. Montenegro welcomes foreign investment and has taken measures to make it easier for foreign individuals and companies to establish businesses in the country.
Foreign individuals and companies can establish businesses in Montenegro by registering a new company or by acquiring an existing one. The process of registering a new company involves selecting a business structure, such as a limited liability company (LLC) or joint-stock company (JSC), and then completing the registration process with the Central Registry of Commercial Entities (CRPS).
Foreign individuals and companies are generally subject to the same registration requirements and regulations as Montenegrin citizens and companies. However, there may be some additional steps or requirements, depending on the industry and nature of the business.
It’s important to note that foreign individuals and companies looking to start a business in Montenegro should seek the advice of a qualified legal or accounting professional to ensure that they comply with all relevant laws and regulations and accurately understand the process of starting a business in Montenegro.
Montenegro’s tax system generally follows the territorial principle, which means that it taxes only income earned within its territory. In other words, foreign income earned by individuals or companies that are not residents of Montenegro is generally not subject to Montenegrin taxation.
However, if you are a resident of Montenegro, you may be subject to taxation on your worldwide income, including foreign income. According to Montenegro’s tax laws, a resident is defined as an individual who has spent more than 183 days in Montenegro during a calendar year or has a permanent residence in the country.
It’s important to note that tax laws and regulations can change over time, and it’s recommended that you consult with a qualified tax advisor or accountant to understand the tax implications of your specific situation.
Staying permanently in Montenegro as a foreigner can be a complex process that involves meeting certain requirements set by the Montenegrin government. Here are some of the general ways to obtain permanent residency in Montenegro:
Employment: If you are offered a job in Montenegro and your employer is willing to sponsor your residency, you may be able to obtain a work permit that could lead to permanent residency.
Family: If you have a Montenegrin spouse, parent, or child, you may be able to apply for permanent residency through family reunification.
Study: If you are a student studying in Montenegro and meet certain criteria, you may be able to apply for permanent residency after graduation.
Retirement: If you are over a certain age and have sufficient income, you may be able to obtain a residency permit for retirement purposes.
To obtain permanent residency in Montenegro, you will generally need to provide proof of identity, a criminal background check, and evidence that you meet the requirements for the specific residency program. It is recommended to consult with a local immigration lawyer or Montenegrin embassy or consulate for more specific information on the residency requirements and application process.
Yes, foreigners are allowed to own property in Montenegro. The country has a liberal property market and has implemented laws and regulations that allow foreigners to buy and own real estate on the same basis as Montenegrin citizens.
Foreigners can own property in Montenegro through outright purchase or long-term lease. There are no restrictions on the type of property that can be purchased or leased, and the process for acquiring property is generally straightforward.
However, it is recommended to consult with a local lawyer or real estate agent who can guide you through the process and ensure that all legal requirements are met. They can also help you navigate any cultural or language barriers that may arise during the purchase process.