Every year the popularity of such a Balkan country as Montenegro among the citizens of the post-Soviet states is growing. Moreover, it is not only the opportunity to get an unforgettable experience on the Adriatic coast that attracts. Business in Montenegro in the tourism sector can bring considerable income. At the same time, for large investors there is the prospect of a successful investment of funds, since the country may acquire the status of a member of the European Union in the near future.
Foundations of the legal framework
The legal framework of Montenegro is largely in line with EU standards. However, as in other transition countries, the procedures for the implementation and application of existing legal provisions remain inconsistent. Listed below are the laws that are fundamental to doing business in Montenegro, including by citizens of other countries.
- Law "On Entrepreneurship". Regulates the forms of entrepreneurial activity, as well as their registration.
- Foreign Investment Law. The key aspect is that an investor who is a citizen of another state is subject to the same conditions as citizens of the republic.
- Accounting Law. The permitted forms of accounting are specified here. In particular, if a foreigner plans to open a company in Montenegro with an annual turnover not exceeding 18 thousand euros, he can use the so-called lightweight form. Otherwise, accounting should be kept in a standard form.
- Bankruptcy (Insolvency) Law. It applies to any enterprise conducting business in Montenegro, regardless of the country of origin of its owner.
In addition, before starting a business in Montenegro, a foreigner needs to familiarize himself with the provisions of the laws "On Labor", "On Foreign Trade", "On Securities" and customs regulations.
Types of businesses in Montenegro
A foreigner can open an enterprise in this country that corresponds to one of the following organizational and legal forms:
- individual entrepreneur;
- OOO;
- limited partnership;
- joint-stock company;
- partnership partnership;
- a branch of a foreign legal entity.
The answer to the question of which business to open in Montenegro so as to minimize reporting activities and pay relatively small taxes is as follows: you can choose a sole proprietorship or LLC.
The basic branch of the economy of Montenegro is tourism. The highest income comes from trading floors, cafes, restaurants and hotels.
The most demanded commercial real estate of these types is in the most popular city among travelers - Budva.
The capital of Montenegro, Podgorica, is a different matter. As the country's business center, it offers a wide variety of warehouses and offices rather than resort facilities. Restaurants and hotels will bring less income here compared to coastal cities. Tourists are not particularly keen on Podgorica - in their opinion, there are few attractions here.
The best options for the level of business profitability
Business in Montenegro for Russians is available in most sectors of the economy. Exceptions apply to:
- production and sale of weapons;
- implementation of business projects for:
- border areas;
- in nature reserves and parks.
In a tourism-oriented country, there are many ideas for small businesses. For example, foreigners, including Belarusians, Russians and Ukrainians, open beauty salons, spa salons, sports clubs or massage parlors in Montenegro. A business based on the leasing of vehicles is also relevant.
Wealthier entrepreneurs prefer the hotel business. The reason is not only that, for example, a mini-hotel brings annual profit at the level of 6-8% of its value as a real estate object.
For some of our compatriots, this is one of the easiest legal ways to immigrate to Montenegro.
It is most profitable to open your hotel at resorts with a large influx of tourists: in Tivat, Herzog Novi, Bar, Rafailovici, Petrovac, Bučići and Budva. However, foreign tourists bring the main profit in the summer.
Many Russians, considering what kind of business to do in Montenegro with the greatest benefit, take into account that travelers usually purchase vouchers, which include only breakfasts. After all, it can take a lot of precious time to return to the hotel, for example, after an excursion for lunch.
Therefore, the restaurant business in the republic is not inferior to the hotel business in terms of profitability. But there is also a nuance here: in order to receive a decent income all year round, and not only in the high season, you need to focus on the preferences of the local population.
Business registration procedure
Opening a company in Montenegro by a foreigner is not a complicated procedure. However, various accounting companies will also do this for a fee. In favor of the choice of an intermediary organization, it is said that its services may not be limited to only one assistance in the preparation of documents with the subsequent registration of an enterprise.
Often, such companies also offer to keep accounting records in the new company and submit tax reports.
Package of documents
If the company will be registered by an intermediary company, the client will only need to issue a power of attorney and provide his passport.
For self-registration, a foreigner needs to prepare:
- an application drawn up according to the established sample;
- a copy of a valid international passport;
- the original of the memorandum of association, to which its notarized copy is attached;
- company charter;
- the consent of each member of the board of directors to be held by a specific person who is a member of this body in a managerial position. The possibility of creating a board of directors for a company of any form must be stipulated in the articles of association;
- a receipt confirming the payment of the state duty;
- confirmation of depositing the funds of the authorized capital to a current account opened with the bank.
Registration procedure
Registration of a company in Montenegro provides for actions in the following sequence:
- Drawing up a memorandum of association and preparation of documentation.
- Submission of the entire package of papers to the Central Register of the Commercial (Commercial) Court in Podgorica.
- After checking and processing documents in the Central Register, in the absence of comments, the founder receives a certificate of registration of a legal entity with a registration number.
- The next stage is registration with the tax service, as well as with the statistics and accounting authorities. As a result, the company is assigned an individual number - the identifier of the entrepreneur.
- Manufacturing of a seal or stamp of an enterprise.
The cost of starting an enterprise and terms
The answer to the question of how much it costs to open a company without resorting to the services of intermediaries is determined by its authorized capital. Its size depends on the organizational and legal form of the enterprise being created.
So, to register a branch of a foreign company, partnership and individual entrepreneurship, the cost of the authorized capital is not required. For an LLC, its minimum size is 1 euro, and if a joint-stock company is registered, the account must have 25 thousand euros.You will also need to pay a state fee: 10 euros for an LLC and 50 - for a joint stock company.
In addition, costs will be required for:
- delivery of papers to Podgorica and back;
- notarization of documentation;
- production of the company seal.
If all this is left on the shoulders of an intermediary organization, the total cost of starting a business will approach the 300 euro mark.
As for the timing, the fastest opening of LLC: it takes an average of 5-10 days (workers). The only difficulty. which a foreigner may face - ignorance of the Montenegrin language. In this case, you can also resort to the services of numerous intermediary firms.
Business visa processing
Opening a business in Montenegro by a foreigner requires him to stay in the country for a long time. For this, a category D visa is opened with a validity period of 90-180 days.
Package of documents
To apply for a business visa to Montenegro, a citizen of another state needs to prepare:
- a typewritten application for a visa;
- a questionnaire completed in English / Russian;
- international passport. It must be valid for at least 3 months from the date of the end of the trip. A copy of the first page of this document is also submitted;
- copies of booking tickets for flights in both directions;
- two color photographs measuring 3 × 4 centimeters;
- a document confirming that the applicant has a sufficient amount of funds, based on the calculation of at least 20 euros / day;
- confirmation of accommodation: travel voucher, hotel reservation.
It should be remembered that the embassy staff may require additional documents.
In general, if you contact the consulate directly, it will take 14 days to process a business visa. In this case, the applicant is charged a state fee of 35 euros.
When it is planned to use the services of a visa center, it is necessary to add the time for sending and receiving documents to this period of time. The costs will also increase - by at least 21.4 euros.
You can extend your visa without leaving Montenegro. For this, a foreigner must contact the migration department at the place of residence. There he will have to prove on a documentary basis the need for additional time in the country. For example, you can provide a cooperation agreement with a local company, one or more points of which are at the stage of completion and require the personal presence of the applicant.
Acquisition of a ready-made business
Those who wish to buy a ready-made business in Montenegro should take into account the following information: the starting cost of a small hotel is about 150-200 thousand euros.
It is important to know one more thing. Montenegro is among the youngest countries in Europe. In many cases, cooperation with local authorities is based on personal contacts.
In addition to the previously indicated promising types of business in Montenegro - restaurant, hotel and car rental - we should mention the income from yacht leasing. Of course, it won't be possible to buy such a ready-made business inexpensively: the ship itself costs a lot of money. On the other hand, the yacht, when fully loaded, will pay off in 5–8 months, and then it will start to bring a net profit.
Tax system
Taxation in Montenegro implies that all persons who receive income in the territory of the country must pay taxes - non-residents, local residents and legal entities.
Individuals
Taxes are levied on the following types of earnings of individuals:
- profit from conducting a professional private activity or wages;
- renting out residential property, vehicles or any other form of ownership;
- royalties or interest received from individuals or local financial institutions;
- capital gains achieved by any legal means.
The following methodology for calculating taxes is applied:
- citizens of Montenegro and non-residents, whose monthly income is less than 480 euros, transfer 9% from it to the state treasury;
- persons with an income exceeding 480 euros will have to pay at a rate of 15%.
The government has not announced plans to increase these numbers over the next few years.
Legal entities
In 2021, the tax on legal entities was reduced to 9%. And in 2021, it is planned to decrease to 7%, and regardless of the residence and legal form of enterprises. This led to a simultaneous increase to 15% of the tax on dividend income.
The tax year is the same as the calendar year. Profit statements must be submitted by February 28 of the year that follows the material accounting period.
Only entrepreneurs who plan to invest all the money they earn to develop their own business are exempted from taxes. Companies operating in regions of Montenegro with insufficiently developed infrastructure can count on discounts and use the freed up resources to strengthen and expand their enterprises.
The benefits expire after 3 years from the date of registration of the organization as a taxpayer.
Features of business immigration
Business immigration to Montenegro is one of the easiest ways to obtain a residence permit in the republic. To do this, it is enough to hold the position of director of an LLC.
Moreover, this possibility is not affected by the size of the authorized capital of the headed organization - it can even be minimal, that is, 1 euro. You can get a residence permit under these conditions in 1-2 months.
To start moving, a foreigner must act in the following sequence:
- Register a company with the status of LLC.
- Place the amount of 1.5 thousand euros on the bank account before submitting the documents.
- Obtain a permit for official employment (as a director). After that, the foreigner can count on the issuance of a residence permit.
- If necessary, notary translations, powers of attorney, get advice from local lawyers.
- Pass a medical examination for the absence of dangerous diseases. Business immigration to Montenegro will only be possible if they are not identified.
- Submit the diploma to the nostrification procedure (giving the document of education legal force on the territory of Montenegro).
- Issue a certificate confirming the absence of a criminal record.
Seeming simplicity should not be misleading. The refusal rate for a residence permit in Montenegro is quite high. In addition, having a temporary permit does not entitle you to apply for permanent residence. To do this must be at least 5 years.
Business tours for foreigners
More and more travel companies are organizing trips to Montenegro, the main purpose of which is to acquaint entrepreneurs from other countries with offers for the sale of real estate and ready-made businesses. Much attention is also paid to studying the peculiarities of the mentality of local residents.
A business tour to Montenegro lasts an average of at least 3 and no more than 7 days. A beginner entrepreneur with a small income can also become a participant.
For example, the cost of a 4-day tour is 450 euros, including airfare, accommodation, meals and consultations with specialists. Agree, the conditions are very attractive, especially if you take into account the prospect: it will be possible to establish useful contacts with Montenegrin entrepreneurs.
Conclusion
Summing up, we note that opening your own business is one of the best ways to obtain a residence permit in Montenegro. It simplifies its implementation by the absence of the need to attract a resident of the country to register a company. In addition, significant cash costs are not required at the initial stage. For example, to open an enterprise with the status of LLC, it is enough to contribute only 1 euro as the authorized capital.
The main disadvantage of doing business in Montenegro is that cooperation with local authorities is based largely on personal contacts. Difficulties are also caused by the abundance of checks by various authorities.
