How ideal is Montenegro from the point of view of business?
What is better in Montenegro compared to others?
The corporate tax in Montenegro is 9%, and it is one of the lowest ones in Europe.
In France, it’s 33.3%, in England 30%, in Slovenia 25%, in the Czech Republic 25%, in Croatia 20%, in Hungary 18%, in Macedonia 15%, in Serbia 10% and in Montenegro 9%.
The profit of the company (gain) is due to the company owner that he can transfer to his own foreign bank account.
The owner may draw the profit after the final settlement at the end of the year (it shall be submitted to the national tax authority of Montenegro until 28 February)
For example, if the company produces a profit of 10 000 euros, and the owner wishes to draw or transfer the amount for himself after the passing of the final account, he may do it in the following way: For 10 000 euros, the tax is 9%, which is 900 euros; the local tax rate is 15% (15% payable for 900 euros), which is € 135, thus actually the owner can account for himself 8965 euros and it can be used for bank transfer anywhere, in Montenegro or on a foreign bank account. If the owner does not draw the profit, but he wishes to invest it into his sector, in this case, he does not have to pay tax for it.
In Montenegro, the value of the VAT is 21%.
The reduced VAT (7%) applies to basic foodstuff, medicines and certain implants, course books, books, newspapers and magazines.
The extent of VAT is 20% in Serbia, 23% in Croatia, 17% in Bosnia and Herzegovina, 18% in Macedonia, 20% in Albania, and it is between 15% and 25% in the EU countries.
Cyprus and Luxemburg have the lowest value added tax, it is 15%; the highest is in the Scandinavian countries, like Sweden and Denmark, that is 25%.
It seems that the difference is between 17% and 19%, which is not so significant. You are not right. If you pay 19% of value added tax in your own country, comparing the amount of the same tax to that paid in Montenegro, you pay 12.37% less in Montenegro. The difference between 17% and 19% represents that much.
Montenegro is the only country, which is not the member of the European Union, and is allowed to use the euro - with the permission of the European Commission. It is possible to withdraw money from cash machines. According to these, a unique situation has evolved: you can benefit from Europe’s advantages. There is no risk of local currency inflation.
Investment motives in Montenegro
Foreign companies, which wish to do business in Montenegro, have the same rights as the national enterprises. As for the establishment procedure - it is fast and simple. In case of company registration, foreign individuals shall comply with the same requirements as national entrepreneurs.
The business language is English, the local currency is the Euro, the tax system is one of the most competitive ones in Europe, and the country has qualified workforce. The country is democratic and politically stable, it is an EU candidate state and Montenegro is, without a doubt, the next country in the region to join the Union after Croatia. It is a 2-hour flight from the European capitals; furthermore, Montenegro enjoys the economic freedom. The attractive sectors are finance, tourism, energy, health tourism, agriculture and the real estate market.
Advantages of purchasing real estate in Montenegro:
- Foreign citizens may finally take possession of their purchased asset
- There is on further wealth tax
- Extremely low, 3% property tax which must be paid to the income authority
- One of the lowest income taxes among the European enterprises - only 9%
- The property may be sold again in any forms, without tax penalty
- Quick arrangement of ownership documents
- The real estate may be rented out without any restrictions
- The value of the purchased property grows continuously
- Tourist destination - fastest growth in the world
- The longest port in Europe, especially designed for super yachts, is under construction in the Bay of Kotor
Direct flights from all big European centers to the Bay of Kotor (Tivat Airport). The expansion of the airport and the increase of the number of flights is under planning.
Compared to other countries in the region, in Montenegro, there is a more simple procedure in force related to company registration, accompanied with the lowest registration fee.
By the easiness of starting an enterprise, according to the World Bank, New Zealand is the best country. There the registration only takes one day, and it does not even cost a dollar. Australia is at the second place, and Canada is the third. In our region Macedonia is the best - it is at the sixth place. After it, there is Slovenia at the 28th place, and Montenegro is the 47th in the world. Croatia falls behind with 20 places, to the 92nd place. Serbia and Bosnia-Herzegovina are now at the 162nd place.
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Limited liability company D.O.O. (Ltd.) – € 1650,00 Establishment of D.O.O. (Ltd.) with bank account opening in Montenegro € 1850,00 It is most similar to the English Ltd. and this is the most popular form. One or more persons may set up the Ltd. – national or foreign, private person/persons or legal entity or entities. […]
AD €2380 +19% VAT
Setting up a Public Limited Company AD (PLC): € 2580.00 Establishment of AD (PLC) with bank account opening in Montenegro: € 2580,00 The lowest capital for the establishment is 25 000 euros, and this amount is deposited in a commercial bank by the shareholders until the establishment of the company. After setting up the PLC, […]