Montenegro company formation
Company Registration in Montenegro:
Types of Business Entities
and
Laws to Consider
If you’re considering starting a business in Montenegro, you’re not alone. The country’s growing economy and strategic location make it an attractive destination for entrepreneurs looking to expand their operations. Here we’ll provide you with all the information you need to know to start a successful business in Montenegro.
Understanding Montenegro’s Business Environment
Montenegro’s business environment is characterized by a low corporate tax rate of 9%, which makes it an attractive destination for businesses looking to minimize their tax burden. Additionally, the country’s strategic location at the crossroads of major European and Balkan trade routes makes it an ideal location for businesses that want to expand their operations.
Choosing the Right Business Structure
Before you can start your business in Montenegro, you’ll need to choose the right business structure. There are several options available, including a limited liability company (LLC), joint-stock company (JSC), and a sole proprietorship. Each structure has its own advantages and disadvantages, so it’s important to choose the one that best fits your business needs.
Types of Business Entities in Montenegro
Limited Liability Company (Društvo s ograničenom odgovornošću – D.O.O.) is the most popular among our clients
A limited liability company in Montenegro can be formed by at least one shareholder, but the total number of shareholders cannot exceed 30. The liability of the members of a D.O.O is limited by the contribution to the capital. Even though it doesn’t require a minimum share capital, the entity must open a bank account that will be used for various transactions. The capital of a D.O.O is divided into non-transferable shares. The general meeting of the shareholders is the highest instance in the company, and the directors appointed by it are taking all the necessary decisions to continue the business every day.
Joint Stock Company (Akcionarsko društvo)
A Joint Stock Company is designed especially for large businesses due to the fact that it requires a high amount of capital (25.000 EUR), and the shares of it can be transferable to the public. The major decisions are also taken by the General Meeting of the shareholders, but the daily decisions are taken by the Board of Directors appointed by it. An auditor is also appointed to check the company’s finances.
Sole Proprietorship or Sole Trader
The simplest business form when starting a business in Montenegro is the sole proprietorship or sole trader. This type of business requires one member who must be a natural person and who will be entitled to the whole profits of the company. He or she will also be responsible for the business’ debts with their personal assets.
Laws to Consider When Starting a Business in Montenegro
The main law that provides for the registration of companies in Montenegro is the Company Act. According to it, any local or foreign businessperson can start a business in Montenegro, as long as all the requirements are met, and the company is registered with the Montenegro Registry.
If you plan to open a company in Montenegro and need assistance or information about the laws to respect, you can rely on our experts.
Virtual Offices in Montenegro
Foreign investors interested in setting up a company in Montenegro should consider virtual offices. These services offer a legal address that can be used during the company formation process. Virtual offices can also help with the preparation of necessary documents for company incorporation in Montenegro.
Virtual offices provide numerous benefits to foreign investors, including flexibility, lower overhead costs, and accessibility. Foreign investors can benefit from having a legal address without having to maintain a physical office in Montenegro. This can save them time and money, as they do not have to worry about utilities, rent, and other office-related expenses.
Company Formation in Montenegro
The process of setting up a company in Montenegro involves several steps. First, the company’s foundation documents must be certified at the basic court. After that, the desired name of the company is checked online, and then the registration documents are submitted at the Commercial Court. These documents include the foundation act, the articles of association, a list of all the founders of the company, managers, and members of the board of directors, and the name of an executive director, among others.
The Montenegro Registry will then notify the Official Gazette, which will publish a notice regarding the newly formed company. The company must then register its employees for Health and Pension at the Tax Administration counter. A seal or stamp is also necessary for future company transactions. A bank account is opened once the company is registered with the Company Registry and tax office and the Statistical Office.
Shareholders in Montenegrin Companies
According to the Company Law, any natural or legal person, local or foreign, can act as a shareholder in a Montenegro company. The shareholding rights are based on the contribution to the capital of the business. The minimum number of shareholders in a company in Montenegro is one, but depending on the type of structure to register, a maximum number needs to be established in accordance with the number of shares issued.
Shareholders have various rights and obligations in a company, and they must attend the annual general meeting, which must be established upon the incorporation of the company. During the first year of activity, the annual general meeting must be held no longer than 18 months after registration.
When it comes to the powers of shareholders, these include deciding any increase or decrease in the capital of the company, making changes in the company’s statutory documents, appointing and removing company directors and other executives, including auditors, and deciding to end the activities of the company by voluntary liquidation.
Company Directors in Montenegro
A company can have at least one director if it is a private company and at least three if it is a public one. In the joint-stock company, at least one director must be a Montenegro resident. Also, corporate directors are not allowed in local companies, but branch offices and subsidiaries can appoint corporate executives.
The directors are appointed by the shareholders before the company is registered, and their name(s) must be recorded with the Trade Registrar in Montenegro. Directors have various rights and duties towards the company and the shareholders.
Costs for Company Formation in Montenegro
In order to open a company in Montenegro, foreign investors need to consider the associated costs. These include registration fees, legal fees, and other expenses such as notary fees and translation costs. Our experts in company registration in Montenegro can provide more information on these costs.
Conclusion
Starting a business in Montenegro can be a rewarding and lucrative venture. By understanding the country’s business environment, choosing the right business structure, registering your business, obtaining necessary permits and licenses, finding the right location, and hiring employees, you’ll be on your way to success. With careful planning and preparation, your business can thrive in Montenegro’s growing economy.