Montenegro is a small country, but a country of open opportunities for investment and creation of such financial conditions as are necessary in order to make Montenegro a country which many businessmen would choose for both business and pleasure. Freedom and development of Montenegro, a state that has existed in the Balkans and Europe, are preserved by the contemporary civilization conditions and enriched by entrepreneurship and the work of it's citizens, cooperation with all the people who wish to make money, by showing respect and promoting the environment as well as by openness for the cooperation with the whole world.
Company Incorporation
According to the Act on Companies which are established and which conduct business activity on special terms, any legal entity and individual is free to establish international enterprise in the free trade zone of Montenegro.
In the Republic of Montenegro the following types of companies are available:A limited liability Company, A Joint Stock Company, Anonymous entities. One or more founders can establish Limited Liability companies, and a Shareholding company must be established by at least two founders.
Minimum establishing equity for the limited liability company is $1000 and for the joint stock company $10000. Companies are formed by inscription in The Company Register held by the Republican Ministry of Finance, in the term of ten days after the submission of the proper application.
According to the Act on Companies every enterprise with a statutory seat abroad as well as every natural person who is a foreign resident for more than five years, may found a limited liability company or a joint stock in Montenegro. There are certain limitations concerning the title of the company. It is prohibited to name the company by the titles resembling those of the established companies. It is not allowed to use titles with indications of other states.
The Republic of Montenegro guarantees, by regulations and undertaking the corresponding measures and actions, that officers in the employment of the Ministry, banks and other departments and organizations, will keep as secret; all data on the identity, documents, reports and other information which are known to them in the process of their work with companies and qualified individuals, in accordance with the special government provisions.
Annual Taxation and Fees
Corporate income tax for offshore companies is due at the annual rate of only 2.5%. Offshore companies are liable to pay the annual registration fee as the lump sum of 80 US $ for limited liability company and 100 US $ for joint stock company. Offshore companies are exempted from real estate taxes in Montenegro, if the real estate serves for pursuance of their business activities. Exemption from sales tax and excise duties is granted for supply of goods, equipment and services, which are necessary for the performance of business activities of the offshore companies. All employees of the offshore company are liable to pay the wage tax at the rate of 5%. Yugoslav citizens who are employees of the company are due to pay social security contributions, i.e. the contribution for health insurance at the rate of 4% and the pension contribution at the rate of 6%.
The company Awell, is due to pay the same contributions for its local employees.
Every natural person who has a status of the "qualifying individual", i.e. - a person who has been non-Yugoslav resident for more than five years and who is employed by the off-shore company, enjoys:Duty-free import of cars, yachts, household equipment, furniture and technical goods, which will be used by the individual or close family, but may not dispose with these goods in the term of five years after their import - by transferring ownership rights over it to Yugoslav residents; Exemption from real-estate taxation in respect of family housing in Montenegro; Exemption from inheritance tax and capital gains tax for gains made in Montenegro; Exemption from administrative and residency levies, as well as all other local (municipal) duties.
Off - shore businesses in Montenegro that make a gross annual income greater than 1.500.000 $, or alternatively that has profits of more than 100.000 $ per year are subject to the audit requirements.
Montenegro - New Off Shore business Centre
The ownership and management transformation, based on privatisation and foreign investments, has been a top priority and strategic guideline for the Republic of Montenegro. This process has continued since 7992 despite extreme conditions such as economic blockade and no support from foreign investors. During that period special attention has been paid towards establishing a new legislation, particularly concentrating on the opening of new strategic projects that might enable the ownership transformation of other economic structures, setting the basis for further economic development in market conditions. Parallel, the economic and financial system was brought in line with other countries with developed market economy. This way, optimal conditions were created for free marketing of goods, labour and capital, free stock exchange dealings, privatisation funds, banks, modern management and for building an entire market infrastructure.
For an extended period of time, the Government of Montenegro has been seriously elaborating a global economic project: "Montenegro- A Free Trade Zone". The purpose of the project is to offer Montenegro to prospective foreign investors presenting it .as a complex and attractive economic structure and to promote a new business image of the Republic. Special emphasis is being put on the international" off -shore centre" as a place where companies for special purposes will be founded.
The off -shore centre will also develop a financial environment that will make Montenegro a desirable location for the foreign business community. A foreign consultant and expert firms are developing this project.
The concept of a free trade zone envisages Montenegro as a new centre for international business ventures and for providing foreign companies with top quality services that would match the world standards in the area of business and tourism. "Montenegro-A Free Trade Zone " will create an attractive system of specific regime business operations which will develop an environment that is attractive for prospective foreign investors, by granting them considerable tax reductions, exemptions of customs duties, free transfer of profits, and other advantages. These special regimes have been designed so as to enhance the natural resources and the comparative advantages of Montenegro.
In Montenegro, all foreign legal entities and individuals are guaranteed by the law the freedom to start companies, perform business activities and undertake international business transactions. Incentives in regard of the foreign citizen's accommodation, staying and working have been determined as well. A guaranteed activity of the companies and their foundation is connected primarily with their performance in international trade, export of domestic products and services, offering financial and non - financial services, management and consulting services, offering services in trading, production of information technology and real estate agential services, services concerning film production and marketing as well as other audio- visual productions, and other activities that, adopted by the generally accepted business standards, are performed in international business centres.
All companies performing their business dealings in the Republic of Montenegro may use the local management services, consulting and other non-financial services of domestic legal entities and individuals.
Montenegro Real Estates - Buying property in Montenegro
Buying a property in Montenegro means buying a property in a new and undiscovered market for foreign investors. Nevertheless it is expected that Montenegro property prices follow the property boom in neighbouring Croatia.
Many centuries of association with Venice give the piazzas, bell towers and shaded walkways an Italian feel. Budva, the picturesque walled city on the stunning Adriatic coast is one of the most popular resorts. Many Germans and Italians are already beginning to snap up some of the cheap and charming properties that are available.
In order for foreign purchasers to complete a sale, their country of origin must have a reciprocal agreement with Serbia & Montenegro. In the case of Britain and Ireland for example such an agreement exists. The selling and buying of properties is without restriction in Montenegro and is regulated by law and legally secure. Ownership is guaranteed and in that respect there are no specific limitations, the only exceptions being public property i.e. streets, squares, public objects of special importance etc of which the sale and purchase is not permitted.Purchasing property in Montenegro
1. Reserve the property
2. Draw up the contracts for sale
3. Set up a local Bank account
4. Power of Attorney
The contract is then signed and exchanged in the presence of a notary public. However, if the buyer is not present, the power of attorney can be provided for the lawyer. The buying process is very straightforward and it can take from 3 to 30 days. Once the contract is signed and Montenegro real estates purchase tax of 2% is paid the documents are taken to Cadastre and it takes from 1 to 10 days to register a new owner(s)
No approval from the Ministry of Foreign Affairs is required. The costs associated with purchasing a property in Montenegro.
Purchase Tax is set at a rate of 2% of the valuation given by the Inland Revenue Office. This is only applicable on re sales.
Agency fee usually 4%
Surveys
Surveys are not typically commissioned in Montenegro however our associates can arrange a survey if you so require.
Clean Title
One of the most important aspects of purchase in Montenegro is establishing that the property has "clean title". Means, the seller has legal authority to sell the property and there are no pending claims on the property before the courts. Over the years, the property administration system has lacked an effective method of tracking ownership of land and/or buildings. It is therefore important to ensure you deal with an Independent Lawyer in Montenegro when purchasing property there. Also there is significant number of properties built with no planning permission, which are available on the market for sale.
