Montenegro is a small European country well known for its touristic sector. It is located in the west-central Balkans at the southern end of the Dinaric Alps. It is bounded by the Adriatic Sea and shares land borders with the following countries: Croatia to the west, Bosnia and Herzegovina to the northwest, Serbia to the northeast, Kosovo to the east, and Albania to the southeast.
Montenegro was part of the Yugoslavia nation until it gained its independence in 2006. It is a republic without its own currency. It uses euro, however, Montenegro is still not a member of the EU.
The Limited Liability Company is also known as Drutvo s ogranienom odgovornou (D.O.O). It is one of the most common types of companies in Montenegro used by both investors and entrepreneurs. It can be formed by at least one shareholder and the total number of them cannot exceed 30.
The liability of the members of a Monte negro LLC is limited by the contribution to the capital. Even though there is no minimum share capital required, the entity must open a bank account which will be used for various transactions. The capital of a Limited Liability Company will be divided into non-transferable shares.
Incorporating a Montenegro LLC only requires:
- One shareholder of any nationality and residency who can be an individual or a body corporate
- One individual director of any nationality and residency
- A paid-up share capital of EUR 1
Montenegro is ranked 50 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings. The country offers the lowest income tax rates in Europe at a flat rate of 9%
The VAT rate in Montenegro is 19.00%, in terms of other taxation, an employer will contribute 10.30% to the equivalent of a social security fund and an employee will contribute 24.00%. As regards the withholding taxes on dividends, interest, they will amount to 9% in Montenegro.
Montenegro has also signed more than 40 double tax treaties that may help reduce or eliminate withholding tax with global jurisdictions including China, Malaysia, France, Germany, Switzerland and many more.
In addition, the Montenegro government offers various incentives to both investors and entrepreneurs. Some of the most important ones are
- Vat exemptions on constructions of high-end hotels, food production, and energy-production facilities
- An 8-year tax exemption of up to 200 000 for companies newly incorporated in underdeveloped municipalities
- Reduced VAT levied at the rates of 7% on purchase of IT equipment and 0% on other selected basic products
Montenegro’s economic growth has been very strong lately, as it has been fuelled by a growth in new investment. Since obtaining its independence, Montenegro has received more foreign investment per capita than any other European country.;