Understand the Jurisdictions Setup Requirement Before Proceed Your Company Incorporate in Montenegro
According to the World Bank, Montenegro is an open economy looking forward to being part of one of the world’s biggest economic blocs, the European Union, by 2025. With this, the government is showing that it has a progressive economic strategy, securing access to a much bigger market. It is one of the reasons why many investors are hoping to company incorporate in Montenegro.
Meanwhile, the government of Montenegro is making strides toward making a more favourable environment for private sector development. This, as it frees up its economy and encourages more investment from private industry.
Montenegro is truly keen on developing its economy. In fact, it is implementing a framework aimed at generating employment and economic opportunities while keeping the fiscal balance in check. By doing so, the country can foster long-term inclusive growth.
Currently, among the biggest foreign investors in Montenegro are Norway, Russia, Italy, Azerbaijan, and Hungary. But the country’s government is looking forward to inviting more foreign investors as it touts its low corporate tax rate.
With the country appearing to be an attractive market, it is best for potential investors to know some related matters before the company incorporate in Montenegro.
Requirements for Company Registration in Montenegro
Of course, before you company incorporate in Montenegro, you should learn first what are the requirements to register your company first. Here they are:
The Montenegrin Company Law says that local and foreign people can be a shareholder of a company in the country. Their rights and ownership of the company depend on the amount of their contribution to the business. According to the law, the minimum number of shareholders in a company is one. Meanwhile, the maximum number will be based on the type of corporate structure and the number of shares planned to be issued.
Shareholders have rights and obligations for the company. At the same time, they are attending the annual general meeting established during the company incorporation.
Shareholders are also receiving profits from the company based on their capital contribution, including the declared dividends.
There are two classifications of shareholders: majority and minority. The difference arises from the number of shares held by the shareholders.
When your company incorporate in Montenegro, you will need someone to lead your business. Company directors are chosen by the shareholders before the company registration. Their names are identified in the Montenegrin Trade Registrar for transparency. Like shareholders, company directors have their rights and obligations given their position.
Accounting for All the Costs
Here are the following costs you should account for when your company incorporate in Montenegro.
- Business registration fee – The Companies Registrar in Montenegro is mandating one of the lowest business registration fees Europe at 22 EUR.
- Virtual office cost – This amounts to around 75 EUR monthly. Investors are benefiting from having an address located in one of the most renowned buildings in the country.
- Minimum share capital – Investors do not have to worry about this because there are no share capital requirements when opening a private limited liability company in Montenegro.
- Company formation fee – For those who want to have a fast and simple registration, you would allot 500 EUR.
- Accounting fee – To keep your books in check, this costs around 130 EUR per month.
How to Company Incorporate in Montenegro
Follow these steps to incorporate your dream company in Montenegro.
Picking the Business Structure
When you start a company, you have to think first what type of company you want. It can be a limited liability company, joint-stock company, representative office, general partnership, limited partnership, and sole proprietorship. After this, you also need to secure a trading name and open a bank account to hold your share capital.
Preparing Incorporation Requirements
The business owners are keeping in mind the different requirements for company incorporation. Among the documents needed are the foundation act, list of all the company founders, list of board of directors, name of the executive director, company name, and official address, among others.
Preparing the Documents for Company Registration
The regulator is always asking a copy of the Memorandum and Articles of Association when you register a company. It is also looking for information about the shareholders and directors, as mandated by the Trade Register.
Accomplishing Company Tax Registration
The government is requiring Montenegrin companies to register for taxation purposes and secure a value-added tax (VAT) number. It must be noted that VAT registration is only required for those companies involved in trading activities.
In addition, local companies are also applying for social security, insurance, and pension.
Montenegro offers one of the lowest corporate tax rates in Europe at 9 per cent.
Acquiring Licenses for Montenegrin Companies
When your company incorporate in Montenegro, you should not forget about the licensing requirements. The companies are applying for business licenses with the relevant regulators based on their operations and industry.
Tourism and Trading in Montenegro
The economy of Montenegro has been showing resilience since having its independence in 2006. Among the developments that the country is proud of is in tourism and trading.
Montenegro’s Vibrant Tourism Industry
Montenegro has a robust service sector, thanks to tourism. The country is one of the top 10 holiday getaways in the world. Over 80 tour operators are organizing holiday celebrations in Montenegro. With a booming tourism sector, real estate investment is deemed very profitable in the country.
Free Trade Zone
The government established a free trade zone to encourage more foreign investments. The investment policies are focusing on manufacturing, construction, and tourism.
Who is the Right Business Partner for You?
If you are looking to company incorporate in Montenegro, you might need some professional help. 3E Accounting is the answer to your business support needs. We are a corporate service provider ready to serve you and your company. Contact us today. Our team is more than happy to help you.