Montenegro corporate structures, Business Environment
Montenegro has a modern legal system with robust business laws. The business regulations have evolved to represent the dynamic business environment of the country.
Opening and operating a business in Montenegro is cheap and straightforward. Registration fees are low, and minimum capital requirements are almost non-existent. That’s why it’s the 50th easiest country to do business in the world.
- Entrepreneur/Sole proprietorship: It’s mostly used by those who want to register their freelance business or startups in Montenegro as it’s the simplest business structure. It is suitable for economic activities that can be completed by a single person, and the registry is simple, as it basically requires to fill an application form with the Trade Register. After the registry, the sole trader must apply for a business license regarding the activities he’ll conduct and to register for taxation and VAT. Foreign sole traders must apply for a residence permit, as we explained before.
- LLC: It has a director and a shareholder, who assumes the liability of the company. The shareholder can be a foreign investor or a company, and can also be the company director. It is the most common among local and foreign businesspeople in Montenegro as it is quick and straightforward. It has between one and thirty shareholders.
- Joint-stock company: It has more requirements and significant minimum capital to register the business, with the particularity that it can be used for stock trading. Aside from the shareholder and the director, an auditor must be appointed too. The minimum capital is €25k, but for banks or insurers, it’s way more.
- Partnership: They are seldom used by foreign investors starting their businesses in Montenegro, but they can be appropriate in some cases for foreign investors starting their companies in Montenegro with local partners. There are two forms.
- General partnership: It requires at least two members that share the profits and obligations of the company. Both have the same rights and obligations.
- Limited partnership: It also requires two members that share the profits and obligations of their business. Nevertheless, partners have unequal rights and obligations. The general partner has full liability over business’ debts, and the general partner will be liable to the extent of his contribution.
- Foreign company branch: They differ from a subsidiary because they are not financially or legally independent from the parent company. Thus, their parent company is fully responsible for the obligations and debts of the branch.
The registration process is simple. In 2011, the government a one-stop system, meaning companies register in a single place: The Central Register is the site were businesses register to the Statistical Office, Taxpayer Registry, VAT Registry, Excise Registry, and Custom Registry (if applicable). All registered companies become immediate members of the Chamber of Commerce.
Founding decision (notarized)
Confirmation of payment of registration and publication fees
You must also consider the following:
- When opening an LLC or JSC, you need the articles of association. For sole traders, the application form at the Trade Register is more than enough. For partnerships, the deliverable document is a notarized partnership deed.
- All business structures require a registered address
- A business name must be reserved. The process can be done at the Trade Register
- The bank receipt of the share capital deposit must be included in the application
- As some of the steps can be conducted at the same time, the process can take as little as five working days. You don’t have to be physically present in Montenegro, as the process can be completed with a power of representation.
- As you may know, the temporary residence permit requires you to be employed. Appointing yourself as the executive director of your company satisfies the requisite.
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