One of the most popular types of legal entities in Montenegro is the LLC (limited liability company). At the present, LLCs are particularly chosen by foreign entrepreneurs because they offer the possibility of land ownership in this country, which is not possible otherwise for foreign citizens in Montenegro.
In this article, our company formation consultants in Montenegro explain different aspects related to the taxation of LLCs in Montenegro.
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How is an LLC taxed in Montenegro?
The corporate tax rate on profits for LLCs in Montenegro is 9%. This rate is applied only to residents of the country.
Non-residents of Montenegro are taxed only on their locally sourced income. The profits which are gained from outside of the country are therefore entirely exempt from taxation.
U.S. citizens and all other citizens of other states have to declare their income to their local tax authorities. Our Montenegro company formation advisors can provide further details on this matter. We can also assist you to open such a company in Montenegro.
The capital gains tax for foreign citizens in Montenegro is 9% as well, however, it is only applied to the sale of an LLC shares which involves non-residents.
While an LLC owned by a non-resident could be entirely exempt from taxation in Montenegro, it must, though, register with the local tax authority and get a tax identification number. LLCs can apply for EORI registration in Montenegro if they intend to engage in trading activities.
The yearly financial statements for an LLC in Montenegro are not requested. Yearly audits are necessary, however, they do not have to be filed with the local government.
Standard internationally accepted accounting performs and record keeping are accepted in this state.
Taxation on dividends for LLCs in Montenegro
The owners and shareholders of LLCs in Montenegro can be legal entities or private individuals.
The taxation on the distribution of dividends issued by an LLC here is effectuated according to the Law on Corporate Income Tax (for companies) and to the Law on Personal Income Tax (for private individuals). Our company registration agents in Montenegro can offer more information on these laws.
If the shareholders or owners of an LLC in this country are companies, a withholding taxation of 9% is calculated and paid on the dividends issued by such a legal entity.
In case you have more questions about the taxation imposed on LLCs in Montenegro, or for help to open a Montenegro company, we kindly invite you to get in touch with us.