5 Steps to: Opening a company in Montenegro
Updated: May 2023
The most common form of legal entity: Limited Liability Company
Foreign investors and entrepreneurs have the option to establish several forms of legal entities in Montenegro, but according to our research – the most common form is LLC (Limited Liability Company).
Limited Liability Company can be formed by one or more shareholders. However, the total number of shareholders can’t exceed 30. The most important characteristic of this form is that the liability of shareholders is limited by the contribution to the founding capital.
The minimal funding capital according to Montenegrin Law is 1EUR.
The capital of a Limited Liability Company is divided into non-transferable shares.
Foreigners can hold up to 100% of the company’s shares.
To establish a residential Limited Liability Company, having a local partner is not required by the law, as it might be the case in other jurisdictions.
We have divided the process of establishing a Limited Liability Company in Montenegro into 5 simple procedural steps as follows:
Step 1 – Double-check if you have all the required information to start the process
Before you even start the entire process of company incorporation answer the following questions:
Ø Do you understand clearly what are the requirements for registering a Montenegro Limited company? Do you fulfill them?
Ø What are the costs, the fiscal and legal effects of having a company in Montenegro? And do you have the budget to ensure uninterrupted monthly and yearly operations?
Ø Do you need an office or prefer to find a solution for a virtual address?
Ø Are you able/ willing to come to Montenegro to register and manage the company? Or would you prefer to set up and manage your company remotely?
Writing down the answer to these questions will help you decide precisely and understand how you will organize the setup and management of your company in Montenegro. If the initial understanding process seems to be complicated to you – you can schedule an initial informative call with us here.
Let’s move to the next step now.
We assume that you would like to finalize the establishment of your company remotely – without obligation to visit Montenegro, at least during the first part of the registration process.
Thus, your next step would be to issue a power of attorney (POA) to your legal representative in Montenegro. On that base, your local legal representative will be fully authorized to act, prepare and sign required incorporation documents and finalize the company registration process on your behalf.
The issued POA must be notarized and apostilled in your country and sent to us in the original by post. Our legal experts will assist you with the preparation of the corresponding POA.
Alongside POA, our legal experts will prepare other required founding documents such as Founding contract or Founding Decision, the Statute of the Company, etc.
In case you prefer to visit Montenegro in person – POA is not required, as our legal expert will prepare all required documentation for you and accompany you to finalize the notarization and other administrative procedures.
Step 2 – The Legal Adress – Your corporate seat in Montenegro
The official address of the corporate seat is required by Montenegrin Law. However, if your company does not require a fully-fledged office there are several solutions with a kind of ‘’virtual office’’ with letterbox – or optional shared office. However, you need to ensure the quality of your corporate seat address. There must always be a trustworthy representative of your company for the incoming post or inspection visits.
We provide our clients with a fully-fledged legal address of high quality in all cities of Montenegro.
Step 3 – Nominate the official Managing Director
Every incorporated company must have an appointed Managing Director according to Montenegrin law. Nominee – as in other jurisdictions, is not recognized by Montenegrin law. Thus, shareholders of the company have the following options:
Ø First option: To nominate the founder, one of the founders, or any other non-Montenegrin citizen at the position of Managing Director of the firm. If this option is preferred – you must understand that any foreigner is required to obtain temporary residency and a working permit (one permit that gives both rights) to ensure the right to be fully registered as the Managing Director of the company. Exactly, for this reason, opening a company in Montenegro and registering the founder as an executive director is very often used as the secure road to the temporary residency permit of Montenegro. Executive directors under this category must renew their residency and working permits each year.
Ø Second option: To nominate a trusted legal representative and Montenegrin citizen/resident as the managing director of the company. In comparison to the first option, this option requires less time and is more efficient. However, it is very important to carefully choose the executive director of your firm – as that person has all managing rights within the company and impacts the company’s business operations. If you prefer this option, our task is to ensure that you will have an appointed and trusty person executing a directorship position for you here in Montenegro
Step 4 – Go through the incorporation procedure
Now, when you have decided the most important things – it is time to complete, and sign required statutory documentation such as Articles of Association, Statute of the Company, Decision on Executive Director, etc. Together with the company registration form, notarized, and signed documents – the company’s registration application can be submitted, and the company officially registered within the Central Registry of Legal Entities of Montenegro.
If all documents are prepared by the Law and with attention to detail, the registration process runs smoothly, and it takes usually up to 7 working days.
Upon successful registration – Central Registry will issue a Registration Certificate and the company will officially be incorporated.
However, this does not mean that company is still fully operational – as additional administrative procedures (registration for VAT, opening of corporate bank account, registration of executive director and other employees for social insurance and contributions, residency, and working permit) might be required.
Step 5 – Finalize, set up, and run your company!
The next procedural step after successful registration of the company is to obtain the company’s stamp and open a corporate bank account.
Once this is completed, you can decide whether you prefer to register your firm for VAT (you are not required to until your yearly threshold reaches 18.000eur). Additionally, you are required to register the Executive Director and other employees of the company within the Tax Authority of Montenegro to be able to conduct the payments of the salaries, taxes, and contributions.
If your Executive Director requires residency and a working permit – then this step must be added as well. Usually, obtaining residency and a working permit might take up to 30 days and is run as a separate process.
In the end – incorporating a company gives you certain rights but as well brings certain liabilities and obligations by Montenegrin Law. Thus, you as the founder of the company must count on the following:
Ø Monthly accounting is mandatory – we can provide this service inhouse
Ø Yearly financial reporting is required – we can provide this service inhouse
Ø Monthly payment of salary, taxes, and contributions for Executive Director and other registered employees is required
These are 3 main obligations that you must take into consideration when starting the company. We recommend that alongside establishing procedures you create a financial plan every year that covers all expenses, obligations, and deadlines. That way you can secure uninterrupted operations of your company – no matter of its size and volume of activity.
In comparison to other jurisdictions, Montenegro falls among one of the easiest destinations for ease of doing business, and the entire process of establishing and compliantly running a company is not characterized as complex.
Should you have any additional questions or need a consultation before starting the process of incorporation, feel free to get in touch with us!
We hope this guideline article helps you to create a better picture how the process of company registration and management in Montenegro looks like.
However, the incorporation procedure should be analyzed and approached case by case. Thus we invite you to schedule consultancy hours with us and we will find the best fit for your business needs and support you with the entire process!
Author
Bojana Minic
Managing Director | Rufil Consulting Montenegro
How to get in touch with us?
minic@rufil-consulting.com | www.rufil.me | +38267555715 | Viber | Whatsapp | Telegram