Foreign investors who want to do business in Montenegro must start by choosing the legal entity under which they can complete their activities. The Company Law is the main legal framework which provides for the types of companies which can be registered in Montenegro.
There are a few types of companies that an entrepreneur may open in Montenegro, among these simple business forms with unlimited liability and more complex types of companies which offer limited liability, as well as other advantages.
Our experts in Montenegro can help you select a company type and register it with the Central Registry of Montenegro.
With a vast experience in corporate matters and years of assisting foreign entrepreneurs, our Montenegro company formation advisors can help you set up any type of company in this country.
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The main types of entities under the Montenegro Company Law
As mentioned above, there are several types of companies which can be established in Montenegro. The choice of the legal structure of a company should be based on the size of the business the entrepreneur wants to set up and the activities to be undertaken.
The following types of companies can be incorporated in Montenegro, according to the law:
- – the sole proprietorship which is the simplest business form in Montenegro and can be changed into another one at any time;
- – the partnership which can be general or limited and which requires at least two founding members;
- – the limited liability company which can be private and public and have different requirements in terms of shareholding structures and number of founders;
- – the subsidiary company which can be set up by foreign companies under the same rules applicable to domestic companies;
- – the branch office which is suitable for foreign banking institutions interested in expanding their operations in Montenegro.
Other business forms which can be set up in Montenegro and are acknowledged by the law are the representative office which can be established for marketing purposes and the joint venture which can take the form of a limited liability company.
If you want to open a company in Montenegro and cannot decide on the right business form, our specialists can help you in making a choice.
Trading companies should also consider EORI registration in Montenegro when entering trading relations in EU countries.
Sole proprietorship in Montenegro
The sole proprietorship is the smallest form a business can take in Montenegro. It doesn’t require any minimum share capital and the personal goods of the entrepreneur are not protected in case the company cannot pay its debts.
Limited liability company in Montenegro
The limited liability company (Drutvo s ogranienom odgovornou) is the most common form a business can take in Montenegro because it’s advantageous incorporation procedures. Only 1 Euro is required as a minimum share capital and the company may be formed by at least one shareholder. However the number of shareholders may not exceed 30. If the share capital exceeds 25,000 Euro than the company may be reorganized after a few procedures as a joint stock company.
Joint stock company in Montenegro
A joint stock company (Akcionarsko drutvo) is a type of business designed for high capital investors. The minimum share capital of an A.D is 25,000 Euro paid in cash. The decisions are taken by the General Meeting of the shareholders which appoints a Board of Directors as managing body. Also an auditor is required for this type of business that will check the company books every year. Our company formation experts in Montenegro can give you more information about the joint stock company.
General partnership in Montenegro
The general partnership (Ortako drutvo) doesn’t require a minimum share capital and may be registered with the Central Register of the Commercial Court but it’s not mandatory. The registration status must include: the name of the partnership and the name and addresses of the partners. Also an agreement may be signed but it’s not compulsory.
All the partners are liable for the company’s debts and the partnership might be dissolved if the term stated in the Articles of Association has expired or at the death or bankruptcy of one of the partners.
Limited liability partnership in Montenegro
The limited liability partnership (Komanditno drutvo) is formed by two parties: the general partners and the limited partners. The general partners are liable for the company’s debts, unlike the silent partners, liable in the limit of the amount of capital invested. The limited partners have no decisional power and cannot ask for dissolution of the partnership. Also, if a third party requires being a part of the partnership, doesn’t need the consent from the limited partner.
The dissolution of a limited partnership cannot occur at the death or bankruptcy of the limited partner.
You can also rely on us if you want to apply for Montenegro residency.
The branch office and subsidiary in Montenegro
Foreign companies can also expand to Montenegro by opening either a branch office or a subsidiary. These business forms have different characteristics and our company registration consultants in Montenegro can offer you more details about them.
The branch and subsidiary are two of the three business forms under which a foreign company can activate in Montenegro. The main differences between these two types of companies reside in the control exercised by the foreign companies on them, the taxation treatment applied to them and the activities they can undertake.
The branch office will fully depend on the parent company, will be taxed on the income it generates in Montenegro and can complete the same activities as the parent company.
The subsidiary, on the other hand, is a fully independent Montenegro company which is treated like any other domestic company from a taxation point of view. Also, there are no limitations in the activities it can complete in Montenegro.
The third and most simple business form which can be used by foreign companies interested in researching the Montenegro market is the liaison office which cannot engage in commercial activities, however, it is recognized under the local legislation.
Our Montenegro company formation specialists can help you set up any of these business forms.
You can also use the Montenegro citizenship by investment program for starting a business.
What are the main steps for company formation in Montenegro?
Even if each type of Montenegrin company has its own particularities, the registration steps are the same, no matter the chosen structure. The incorporation must be completed with the Trade Register and implies the following steps:
- choosing and reserving a trade name in the case of limited liability companies (sole traders and partnerships can use the name of the one of the founders);
- preparing the statutory documents which can consist in the Articles of Association or a partnership deed in the case of partnerships;
- filing the incorporation documents alongside information on the shareholders/founders and directors;
- registering for taxation, employment, social security contributions and obtaining a VAT number;
- applying for the necessary business licenses in accordance with the activities to be completed in Montenegro.
Our company registration agents in Montenegro can handle the incorporation procedure of any type of company based on a power of attorney.
Why open a company in Montenegro?
Montenegro is one of the East European countries with a great economic development. In figures, Montenegro registered:
- – a great foreign direct investment injection from more than 100 countries, among which Russia, Italy and Austria;
- – an increase of more than 8% from tourism activities undertaken by foreign investors between 2015 and 2017;
- – real estate is another sector which performed well, as in 2016 the income generated by this industry rose to 117,4 million euros;
- – most foreign investors declared that taxation, alongside free trade, the steady economy and the legislation are the main attributes of Montenegro.
No matter the company type you choose for your business in Montenegro, our local agents are ready to take care of all the administrative and legal aspects when opening a company in the country. Contact our company registration experts in Montenegro for a personalized offer.
German investors interested in starting businesses in Montenegro or in other countries, please contact our partner: Firmengründung in Montenegro. Our company formation firm is part of Bridgewest, an international legal network. Clients that need company formation services in Croatia, United States of America or Seychelles or legal assistance in Montenegro are invited to contact our partners.