Legislation of Montenegro provides for incorporation of the following legal forms:
General partnership is a form of business where 2 or more members jointly manage the company and bear personal liability for the company’s debts to the extent of their respective shares. In such a case each member’s share must be explicitly determined in the company’s founding documents.
A general partnership can be created by both individuals and legal entities.
Limited partnership is a form of business that includes 2 categories of members: limited partners and general partners. Limited partners make contributions to the company and bear liability for the company’s debts only to the extent of their contributions, whereas general partners bear unlimited liability for the company’s debts. General partners manage the company and make decisions in accordance with the articles of association of the company, but limited partners do not participate in the management and may not make decisions.
A limited partnership has some advantages over other forms of business as it allows limited partners to contribute money to the company without participation in its management and only bear limited liability for the company’s debts. A limited partnership, however, can be more difficult to manage than other forms of business due to the necessity to manage 2 different categories of members with different levels of liability.
Limited liability company is one of the most common and popular forms of companies used for business in the country.
DOO is a legal entity that has a legal status separate from its members (founders). In Montenegro, a DOO can be formed by one or more founders.
The authorized capital of a DOO can be any size, but not less than the minimum size set by law.
Members of a DOO bear liability for the company’s debts only to the extent of their shares in the authorized capital. The company’s liability can also be limited to the amount of its authorized capital.
A DOO is managed by its director (Izvršni direktor) or a collective management body depending on what is provided for by the articles of association of the company. The articles of association can also set other management rules, including procedures of the making of decisions, distribution of profits, etc.
A DOO may engage in any legal business, except for some industries requiring a special permission, for example, banking, insurance, etc.
The main advantages of a DOO are the possibility to form a legal entity with limited liability, management flexibility and absence of a complex management and accounting procedure.
Joint-stock company is one of the forms of legal entities that makes it possible to divide property into shares and have a big number of members.
In order to form an AD in Montenegro, it is necessary to register the company with the Central Register of the Commercial Court (CRPS). The founders must draw up the articles of association, which must be approved by the general meeting of shareholders. The articles of association of an AD must contain the main provisions, such as the name, location, purpose, authorized capital, number of shares, voting rules and other information.
The authorized capital of an AD can be any size, but not less than the minimum size set by law. It is divided into shares each of which has its par value. A company can have both ordinary and preference shares.
Shareholders of an AD do not bear personal liability for the company’s debts, but only to the extent of the amount equivalent to the par value of their shares. However, if the amount of the authorized capital does not correspond to the real state of the company’s affairs, shareholders may bear liability for the company’s obligations with their own property.
An AD is managed by the general meeting of shareholders, board of directors and executive body. The general meeting of shareholders is the supreme management body of the company and makes decisions on the main matters. The board of directors is usually elected among shareholders and appoints the executive body, which is responsible for day-to-day management of the company.
The main advantages of an AD in Montenegro are the possibility to mobilize capital by selling shares, management flexibility and ability to draw investors. The formation of an AD, however, requires more time and expenses than that of other forms of legal entities, such as DOO.
Subsidiary in Montenegro is a legal entity established and controlled by the parent company. A subsidiary can be formed both inside and outside the country.
In order to form a subsidiary in Montenegro, it is necessary to register the company with the Central Register of the Commercial Court. Both individuals and legal entities may be founders of a subsidiary, and the parent company may be the sole founder.
A subsidiary in Montenegro has its own articles of association, which contain the main provisions, such as the name, location, purpose, authorized capital, voting rules and other information.
The parent company controls its subsidiary through its directors, who are engaged in management and make important decisions in the subsidiary. The parent company can also appoint its representatives to the board of directors of the subsidiary in order to manage it.
A subsidiary in Montenegro has a number of advantages, such as the possibility to receive financial support from the parent company, the use of its brand, image, common resources and expertise. A subsidiary, however, also bears liability for its actions and obligations to the state and third parties.
Montenegrin branch office is a non-profit entity that is a division of a company and does business in Montenegro. A branch office is not a legal entity, but just continuation of the main company’s business.
In order to form a branch office in Montenegro, a foreign company needs to register with the Central Register of the Commercial Court and obtain a license to conduct its business in the country. Moreover, the branch office must have a manager appointed by the main company.
A branch office in Montenegro has a number of advantages, such as simplified process of formation and registration, use of the name and brand of the main company, possibility to receive financial and legal support from the main company, and others. A branch office, however, also bears liability for its actions and obligations to the state and third parties.
Sole proprietorship is an individual who conducts business on their own. They do not have a separate legal status.
In order to register a sole proprietorship in Montenegro, it is necessary to apply to the Central Register of the Commercial Court and provide necessary documents: application for registration, passport copy, document proving a place of residence in Montenegro, description of the enterprise and kinds of business activity.
A sole proprietorship has no limitations in terms of activities they can conduct, however they cannot draw other persons to work at their company.
A sole proprietorship in Montenegro has a number of advantages, such as possibility to form a business quickly, simplicity and convenience of business management, absence of requirements regarding the minimum amount of the authorized capital, and others. However, one should also take into account risks connected with personal liability for business debts and obligations.
Cooperative is a form of business based on cooperation of a group of individuals or legal entities that unite their resources to achieve their common goal. A cooperative can engage in different activities, such as production, service, trade, and others.
There are a few types of cooperatives in Montenegro, including agricultural, consumer, credit and housing cooperatives.
Members of a cooperative have equal rights to manage the cooperative and receive profits. Each member makes a certain contribution to the cooperative in the form of money, resources or labor.
In order to form a cooperative in Montenegro, it is necessary to register with the Central Register of the Commercial Court and provide necessary documents, including the articles of association, list of members and other documents.
One of the advantages of a cooperative is that it makes it possible to unite resources and experience of various members, which facilitates increase of efficiency and competitiveness of the business. Furthermore, members of a cooperative can receive benefits and subsidies from the state and other organizations.
However, a cooperative has some limitations and risks connected with the necessity to comply with the articles of association, restriction of the members’ right to sell their shares as well as the risk of bad management.
Each form of incorporation has its own advantages and disadvantages, so before establishing a company one should familiarize themselves with each of them and choose the one that suits the specific business best.
When incorporating a limited liability company (DOO) in Montenegro, there are certain requirements regarding the company’s name:
Requirements may differ depending on the region and place of the company’s incorporation.
In order to incorporate a limited liability company in Montenegro, the following steps must be taken:
All necessary documents must be translated into Montenegrin in Montenegro by a licensed translator, apostilled or legalized (if there is no apostille procedure between Montenegro and the respective country).
Russia and Ukraine have old effective agreements with Montenegro under which neither apostille nor legalization is required: a power of attorney can just be notarized. In the case of Belarus, an apostille is required.
The official timeframe of the registration of a company with the Register is 4 workdays. In practice, it is a little extended today and may take up to 10 workdays.
The law does not require Montenegrin companies to have a seal, however it is commonly used in business practices, for example, when working with banks.
The following documents are issued after the incorporation procedure:
In order to receive a resolution to assign a VAT number, it must be requested prior to the incorporation. The law permits operations without a VAT number if during the year the company’s account balance does not exceed 30,000 EUR.
In order to open a bank account for a company in Montenegro, the following steps must be taken:
It is worth noting that in order to open a bank account in Montenegro, a company must have an identification number.
Fees may be charged for the opening and maintenance of an account and for the use of banking services, so one should familiarize themselves thoroughly with the conditions and commissions before choosing a bank.
There are 11 banks in Montenegro, which offer services to both individuals and legal entities.
There are also 2 types of bank accounts:
To remit money from one account to another, account holder’s written order or confirmation in the app is required.
If a company proposes to hire employees in Montenegro, it must register with the local employment office.
In addition, the employer must register with the health fund and pension fund and make respective contributions for its employees.
Certain kinds of activity require relevant licenses and permits in Montenegro: for example, financial services, transportation services, construction, etc.
Every company in Montenegro must have a registered address in the territory of the country. A virtual office is allowed.
According to the law of Montenegro, limited liability companies are not required to have a seal. It means that you can incorporate a company and do business in Montenegro with no seal.
In some cases, however, banks, state authorities and other institutions may require a company to provide sealed documents. Therefore, if you have a seal, it is recommended to use it for the company’s official documents.
Redomiciliation of companies to and from Montenegro is allowed.
Director (or managing director) of a DOO in Montenegro must be appointed at its incorporation. A company must have at least one director.
Director may be a citizen of Montenegro or a foreign citizen, but if they are a foreign citizen, they may need a residence permit in the country.
Director may be an individual or a legal entity.
Director of a DOO is responsible for the management of the company’s business and fulfilment of all its obligations to the state and other concerned parties. They are also responsible for the compliance with the legislation and articles of association of the company as well as for the elaboration of the strategy of the company’s development and control over its financial indicators.
It is worth noting that every director in Montenegro must have a personal identification number (IDN) and be registered as a taxpayer.
Information on directors is available to the public.
Montenegrin companies are not required to have a secretary.
A Montenegrin DOO must have at least one shareholder, which may be an individual or legal entity, resident or non-resident.
Meetings of shareholders must be held annually. There is no requirement regarding the place of holding meetings.
Information on shareholders is available to the public.
Shareholders of a DOO have the right to vote on all issues connected with the management of the company. Shareholders’ rights in Montenegro are regulated by the articles of association of the company and the country’s law.
If a company has more than one shareholder, they must enter into an agreement on the management of the company determining the rules of management, distribution of income and other important aspects.
Shareholders may sell their shares to other persons or hand them down. In such a case, the new holders of the shares must be registered as the company’s shareholders with the relevant state authorities.
In July 2021, the Revenue and Customs Administration of Montenegro established the Register of Ultimate Beneficial Owners (UBO Register) within the Central Registry of Business Entities in accordance with the provisions of the Law on Prevention of Money Laundering and Terrorist Financing.
The UBO Register has been established in line with the requirements of European law to increase transparency and prevent the abuse of the financial systems.
Companies, legal entities, associations, institutions, political parties, religious communities, artistic organizations, chambers, trade unions, employers’ associations, foundations or other business entities, legal entities that receive, manage or allocate funds for certain purposes, foreign trust funds, foreign institutions or similar entities of foreign law that receive, manage or distribute assets for certain purposes are required to register their UBOs.
Entrepreneurs, limited liability companies with one member, and direct and indirect budget users are released from the obligation to register the beneficiary.
The Register is in electronic form, and the application shall be submitted on the website of the Revenue and Customs Administration and must be signed with a qualified electronic signature.
Information provided in the Register: full name, date of birth, citizenship, place of residence, passport number and other information necessary to identify the individual.
This information is confidential and is only available to state authorities and other authorized organizations engaged in prevention of money laundering and terrorist financing.
Nominee service is prohibited in Montenegro.
The authorized capital of a DOO is determined at its incorporation and may consist of any amount of money, real estate or other assets.
The minimum authorized capital required to form a limited liability company (DOO) is 1 EUR. However, some kinds of business, such as banking and insurance services, may require a larger authorized capital, which is determined by regulatory authorities.
The authorized capital must be fully paid within 60 days after the company’s incorporation. The authorized capital is normally paid by money transferred to a separate bank account of the company.
The authorized capital of a DOO may also be increased or decreased, which requires relevant legal procedures.
Price2 000 EUR
(including incorporation tax and state registry fee)
Priceincluded
(Stamp Duty) and Companies House incorporation fee
Price1 500 EUR
(including registered address and registered agent)
Price250 EUR
DHL or TNT, at cost of a Courier Service
Compliance fee is payable in the cases of: incorporation of a company, renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder), signing of documents
Price350 EUR
simple company structure with only 1 physical person
Price150 EUR
additional compliance fee for legal entity in structure under GSL administration (per 1 entity)
Price200 EUR
additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)
Price450 EUR
Price100 EUR
