Why start a company in Montenegro and how much does it cost?

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If you have made it this far, you are likely an entrepreneur, the owner of a startup, or a representative of a corporation seeking new growth opportunities.

Montenegro is positioning itself as an attractive business destination, offering a favorable environment with a competitive tax regime and a simplified process for company incorporation. This small but dynamic Balkan country is known for its economic stability, low corporate tax burden, and for being part of important trade agreements that facilitate access to European and global markets.

At Nomad Tax, we are experts in the creation and management of companies in Montenegro. We offer you our in-depth knowledge to register your company, taking full advantage of the fiscal and strategic advantages offered by Montenegro. Whether you are looking to benefit from its favorable tax system, its strategic geographic location, or its access to the European market, we are here to assist you every step of the way.

Do you know the tax benefits of setting up a company in Montenegro?

residir en Montenegro y crear tu empresa

Key Features of Montenegro: Interesting Facts

Montenegro is a country located in the southeastern region of Europe, on the Balkan Peninsula, bordering Bosnia and Herzegovina to the north, Serbia and Kosovo to the east, Albania to the south, and the Adriatic Sea to the west.

Montenegro declared its independence from the state union with Serbia on June 3, 2006.

The country is known for its geographic diversity, including pristine beaches, meandering rivers, glacial lakes, and towering mountains. This variety offers a range of outdoor activities, from skiing in the mountains to diving in the Adriatic Sea.

In terms of surface area, Montenegro covers some 13,812 km², which makes it comparable in size to countries such as Qatar or Jamaica.

The country’s population is approximately 620,000 inhabitants. The literacy rate is high, close to 98%. Approximately 20% of the population lives in Podgorica while coastal areas such as Budva and Kotor also have high population concentrations, especially during the tourist season.

Key characteristics of Montenegro: Economic Data

Montenegro has a diverse economy that includes tourism, manufacturing and agriculture. Tourism is particularly important, with the beautiful Adriatic coast and mountains attractive to visitors from all over the world. The Montenegrin population has no problems communicating in English because of this.

Montenegro’s main economic indicators include:

GDP per capita is approximately US$8,000, reflecting a developing economy with significant growth potential.

The annual GDP growth rate has varied, showing signs of recovery and growth after periods of stagnation.

The inflation and unemployment rate has been a challenge, although the country has taken steps to address these problems and soon anticipates joining the EU.

The national currency is Euro, although Montenegro is not a member of the European Union. This provides monetary stability and facilitates trade and foreign investment.

How to obtain residency in Montenegro?

The outstanding advantage in that Montenegro has a simplified process for the creation of companies. Also, holding the position of executive director in his own company fulfills the Montenegrin labor requirements for obtaining residency. Obtaining a residence permit for the EU citizen is a very simple and easy process, that takes around 15 days. Please note, that as a non-EU citizen, you would be required to get a business visa in advance, prior to entering Montenegro, as it is not possible to apply for a residence permit for a business owners with the tourist visa only.

Although acquiring residency in Montenegro is generally considered an accessible procedure than in other countries such as Cyprus, there are some essential steps that must be carried out precisely.

There are different types of residency to enter Montenegro (study, investment, businessmen…) but the one we see as the most feasible option and not to beat around the bush is the one for businessmen.

The outstanding advantage in that Montenegro has a simplified process for the creation of companies. Also, holding the position of executive director in his own company fulfills the Montenegrin labor requirements for obtaining residency.

 
Crear una empresa en montengro para extranjeros y residencia

Is it worthwhile to obtain citizenship in Montenegro?

Montenegro is ranked 46th in the Henley Passport Index in 2024, outperforming countries such as Russia and China. Its solid passport is attractive to travelers and businessmen. The traditional process to obtain it involves residing temporarily for five years, then obtaining permanent residency and applying for citizenship. Although the Citizenship by Investment Program (CIP) was discontinued in 2022, it allowed citizenship by donation and investment. Standard requirements include five years of temporary and permanent residency, and successful application for citizenship.

Passports are biometric, valid for 10 years and are obtained at embassies. Montenegro offers visa-free access to 123 countries. Potential EU membership could strengthen the passport. With a citizenship by investment program, the process can be shortened. The efficiency of the team in obtaining results is highlighted and advice is offered for those interested in obtaining a Montenegrin passport.

Diseño sin título (3)

What is Montenegro's tax system and taxes like?

Montenegro stands out for offering a tax regime with a considerably lower tax burden compared to other European regions. Although it does not achieve the designation of tax haven, its tax system is characterized by its fairness and competitiveness, providing an attractive advantage for those contemplating a move to the Balkan country.

In the area of personal income tax, Montenegro applies rates ranging from 9% to 15%, which is significantly lower than most European countries. This system covers various facets, from real estate taxes to Value Added Tax (VAT) management, offering a comprehensive tax framework.

Is Montenegro a Tax Haven? Although it is not a tax haven, Montenegro has fair and competitive taxes. With the low corporate income tax, not complicated tax system and much lower prices for the maintenance of the company than in many other countries, including the neighboring Croatia, Montenegro is a popular destination for someone who wants to stay with a close proximity to the EU and save taxes legally.

Some points to take into account regarding Taxes in Montenegro

Income tax in Montenegro

The personal income tax rate ranges from 9% to 15%, with 15% being applied for salaries over EUR 1,001 per month. There are municipal surcharges and exceptions for non-residents.

Corporate income tax in Montenegro

Companies in Montenegro pay a progressive corporate income tax (CIT) of 9% to 15%. Comparatively, companies spend less on taxes than in the USA and Germany.

Tax Incentives for Companies in Montenegro

New companies in underdeveloped areas are exempt from income tax for the first eight years, covering the first EUR 200,000 in taxes.

Capital Gains Income Taxes

The government of Montenegro implements a clear tax approach by applying a flat rate of 15% on rental income and capital gains.

What are the costs of setting up a company in Montenegro?

Tax Services in Montenegro
Company registration (Tax number + VAT number)
€ 799
Accounting services starting from
€ 200/ month
Assistance with opening of a bank account
€ 200
Residence permit for EU citizens (including insurance and medical check-up).
€ 640
¿Cuánto cuesta crear una empresa en Montenegro?

Get tax advice related to Montenegro

The ideal choice for those considering a move to Montenegro. Through our online platform, we offer personalized advice from expert tax lawyers, adapting to the specific needs of each individual or company.

From tax planning to obtaining residency and citizenship in Montenegro, our team is committed to providing a comprehensive service.

Trust us to make your move to Montenegro a hassle-free experience!

Is it worth investing in real estate in Montenegro?

  1. Montenegro stands out for its thriving real estate market, making it an increasingly sought-after destination for global investors. Here are some of the key indicators that underline its potential. Is it worth the investment? It’s up to you.

Property Pricing

  • Dalmatian Coast: Properties in coastal areas such as Kotor and Tivat, remain in demand. A 50 m² apartment with sea view can cost around €120,000.
  • Podgorica: The capital offers more affordable options, with small houses in new subdivisions starting at €60,000, and renovated villas in attractive neighborhoods up to €350,000.
  • Niksic and Inner Areas: In the second largest city, a modest house can sell for approximately €70,000.

Taxes and Additional Costs

  • Property Transfer Tax: Generally, the buyer pays a tax that varies between 3% and 4% of the value of the property.
  • Annual Property Tax: Varies between 0.1% and 1% of the taxable value of the property, depending on the location and type of property.
  • Real Estate Agency Fees: Agency fees are usually 3% to 4% of the purchase price, paid by the buyer.

Key Trends

  • Foreign Investment:Foreign investment continues to be a key driver with projects such as Lustica Bay and Porto Montenegro attracting international investors.
  • Tourism: Investment in tourism drives demand for properties both for permanent residence and vacation rentals.
  • Northern Development: The growth of ski resorts and mountain tourism opens up new investment opportunities in northern Montenegro.

Future of the Market

  • It is anticipated that Montenegro’s real estate market will continue its upward trend, supported by economic growth and increased tourism. However, it is crucial to monitor the balance between supply and demand to avoid overheating the market.
Apertura de cuenta bancaria en Montenegro

Open a bank account in Montenegro

Opening a bank account in Montenegro in 2024 requires compliance with due diligence procedures, especially for foreigners.

Non-residents can open bank accounts as well. However, the decision of the bank whether to accept or reject the application of a non-resident will primarily depend on the nationality and on whether a person is a PEP or not.  Documents required for both residents and non-residents include inter alia passport, proof of accommodation, residence permit and, for business accounts, additionally corporate documents.

Even though Montenegro is not part of the European Union, it is part of Eurozone, thus the majority of the accounts are opened in Euro. It helps to also facilitate the international transactions as no currency exchange is needed.

The security of deposits is guaranteed up to €50,000 by the Deposit Protection Fund.

Montenegro has joined the CRS for the automatic exchange of financial information. Online account opening is limited, and many new banks offer an alternative for international transactions with low fees.

As a Conclusion

Setting up a business in Montenegro is an exceptional opportunity, not only because of its attractive tax advantages but also because of the natural beauty and geographic diversity that the country offers. The combination of a simplified business start-up process, a competitive tax regime, and the possibility of obtaining residency and eventually citizenship, makes Montenegro an attractive destination for entrepreneurs and investors from all over the world.

Montenegro’s diverse economy, its strategic position in Europe and the use of the Euro as its national currency provides a solid platform for business growth and expansion. In addition, the booming real estate market and the potential for real estate investment offers additional opportunities for those looking not only to undertake but also to invest in the country.

Frequently asked questions and answers

Montenegro offers an attractive tax regime with personal income tax rates ranging from 9% to 15%, and a flat corporate income tax of 9% to 15%. In addition, new businesses in underdeveloped areas may be exempt from income tax for the first eight years.

Residency can be obtained by holding the position of executive director in your own company, which meets the Montenegrin labor requirements for obtaining residency. There are different types of residences, being the entrepreneur option one of the most feasible.

Montenegro is noted for its geographic diversity, including beaches, mountains and a Mediterranean climate, along with a diverse economy that includes tourism and agriculture. The literacy rate is high and the national currency is the Euro, which provides monetary stability.

Montenegro has a simplified process for the creation of companies, which makes it easier for foreign entrepreneurs to establish and operate their business in the country.

Costs include company registration (799 €), accounting services (200 €/month), bank account opening (200 €), and residence permit for EU citizens (640 €).

The Montenegrin passport offers visa-free access to 123 countries and ranks high in the Henley Passport Index. Although the citizenship by investment program was suspended in 2022, obtaining citizenship through temporary and permanent residency remains attractive.

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