Why Set Up a Joint Stock Company in Montenegro


The state of Montenegro is situated in southeastern Europe. The Adriatic Sea’s coastline borders its southwest while Bosnia and Herzegovina border its northwest, Croatia borders its west, Kosovo on its east, Serbia on its northeast, and Albania on its southeast.

Montenegro was part of the Yugoslavia nation until it became independent in 2006. The administrative center of the republic and its capital is Podgorica. Even though it is not a member of the European Union (EU) Euro is its official currency.

The Government has invested sharply in infrastructure, making the country more accessible to investors and entrepreneurs.

The Serbian language has the status of the state language, however, local residents also speak English and Russian.

A key driver of Montenegro’s economic growth was an influx of foreign direct investments (FDI). For five years
in a row, the country has seen a steady growth in the foreign direct investments, becoming a leader in Europe
according to the level of FDI per capita.

A joint stock company also known as the Akcionarsko drutvo (A.D.) is preferred by those investors looking to establish large businesses and corporations in Montenegro. There is a minimum issued share capital of EUR 25,000.00 that needs to be paid in cash at registration by the shareholders.

In order to set up a joint stock company in Montenegro, there will be required a minimum of two shareholders that can be individuals or legal entities. The shareholders will be held liable to the extent of their participation in the company’s debts and obligations. By concluding, as a result of a contract of incorporation of a joint stock company and issuance of the shares that are to be subscribed and paid-in in whole and registered in Central Depositary Agency and Securities Commission, the founders become shareholders of the Montenegrin company. A joint stock company is responsible for its liabilities with its entire assets.

The major decisions are taken by the General Meeting of the shareholders that needs to appoint a Board of Directors as managing body. In addition, an auditor is required for this type of business that will check the company books every year.

Montenegro’s political, monetary and macroeconomic environments are stable and continuously growing. The fiscal system is very favorable; the income tax may vary from 17 % to 0%, while the capital gain tax is 0%.

The main principles of the Montenegrin VAT are in line with the European Union (EU) Sixth Directive
guidelines. Taxable supplies are subject to a general 19% VAT rate; however, certain supplies are taxed
at a reduced 7% rate (e.g. bread, milk, books, medicines, and computers) and 0% rate for certain activities such as the. export of goods or the supply of gasoline for vessels in international traffic.

There is no difference in tax payment and receipt of warranty obligations between local and foreign businessmen. This ensures equality for all market players and makes them competitive at the international level.

Newly established production companies located in non-developed municipalities are entitled to
eight-year tax exemption.

On the basis of principles of the WTO, Montenegro is a signatory of multilateral and bilateral agreements such as Stabilization and Association Agreement with the EU, CEFTA 2006, EFTA. In addition, Montenegro has signed agreements with Russia, Belarus, and Turkey. ,