Montenegro is ranked 46 out of 189 economies according to the “Doing Business in Montenegro 2016” by the World Bank Group and is one of the easiest places in to do business in Europe.
Why invest in Montenegro?
Montenegro emerged as a sovereign state in May 2006, and has been one of the strongest emerging nations from Europe. They have experienced constant economic growth and have been seeing a steady flow of foreign direct investment. The government since its independence has adopted an investment framework to encourage growth, employment and exports in conjunction the government set up the Montenegrin Investment Promotion Agency (MIPA), the national investment agency in 2005 to promote foreign investment and facilitate economic development in the nation.
Below is a summary of Foreign Direct Investments in Montenegro;
|Foreign Direct Investment||2013||2014||2015|
|FDI Inward Flow (million USD)||447||497||699|
|FDI Stock (million USD)||5,192||4,897||4,344|
|Number of Greenfield Investments***||9||7||4|
|FDI Inwards (in % of GFCF****)||49.7||57.7||64.2|
|FDI Stock (in % of GDP)||116.3||106.6||107.5|
Montenegro has caught the eye of many investors due to its favorable views on foreign investment, corporate tax and ease of doing business. The Nation is on its way to being a full fledge member of the European Union and it 2011 became the 156th member of the World Trade Organization.
In recent years the nation has achieved a high level of economic freedom, a stable currency, and protected ownership rights. These positive signs, have encouraged investors all around the world to take notice of the ample opportunities in this emerging economy, where they tax rates are one of the lowest in Europe.
Doing Business in Montenegro
With the low corporate tax rate, easy and cheap company incorporation process and relaxed laws on foreign ownership, Montenegro is one of the easiest places to start a business in Europe and in the world.
For foreign companies there are range of entities that are available, please find below i) a summary of the different types of entities available in Montenegro and ii) tax summary.
Type of Business Entities in Montenegro:
|LLC||Joint Stock||Branch||Limited Partnership|
|Minimum No. of Shareholders||1||1||Parent Company||2|
|Minimum No. of Directors||1||1||Parent Company||2|
|Wholly Foreign Owned||Yes||Yes||Yes||Yes|
|Type of Tax||Rate (%)|
|Personal Income tax||9%|
|Corporate Income Tax||9%|
|Value Added Tax||The standard VAT rate in Montenegro is 19%. There are reduced rates of 7% and 0%.|
|Withholding tax||9% on dividends/profit distribution, capital gain, royalties, intellectual property rights, rental income, consulting, marketing and audit services.|
|Social Security Contributions||Total 33.8% (9.8% is payable on behalf of employer, 24% is payable on behalf of employee)|
If you are interested in setting up a business in Montenegro, Healy Consultants will be pleased to assist you with i) Montenegro company incorporation, ii) government license registration, iii) corporate bank account opening series, iv) business visas and v) office rental.
Image credit: By Nije bitno (Own work) [CC BY 3.0], via Wikimedia Commons