In Montenegro, it is not that difficult to set up a company and start making business. The most common type of legal entity is a Limit Liability Company (LLC), which is in Montenegrin DOO (Drustvo s Ogranicenom Odgovornoscu). However, also among others options, you can consider entrepreneurship, the general partnership, a limited partnership or a joint-stock company. In this regard, we asked Jacco Landsmeer, the owner of Ekonomik Accountants and Ekonomik Asset Management for advice about the process of opening of the most used legal entity in Montenegro (LLC).
It usually takes approximately 2 to 5 days to set up a standard LLC company from the day of application. The following process is typically executed on your behalf by a local accountant or a lawyer (through a notarized Power of Attorney). You as the owner do not need to be in Montenegro for the establishment. A professional accountant usually maintains the company books after the incorporation is finished and can act as well as your tax advisor. If you want to be confident in the services offered, be aware that only certified accountants can provide and ensure the quality of the company registration process.
Here are the steps that need to be done for getting the company opened:
- Define the founder (can be a Montenegrin or a foreign individual (copy of identity card for a Montenegrin, or a certified copy of a passport for a foreigner));
- Define the Executive Director (can be a Montenegrin or a foreign individual (copy of identity card for a Montenegrin, or a copy of a passport for a foreigner)). Note: the found and director can be one person;
- Prepare the following information: company name, company address, company activity, the amount of initial capital (minimum amount in Montenegro is 1.00 €);
- Prepare the Decision on the Establishment (if there are two or more founders, an Agreement on company establishment is made, and the percentage proportion of the owners is accurately determined);
- Prepare an Authorization Document for submission and withdrawal of documents to the Central Registry of Business Entities of the Tax Administration of Montenegro (CRPS);
- Prepare decision on the Establishment (the Agreement), the Authorization Document and the Notarized signatures of authorized persons (OP form) are certified by a notary;
- The Central Depository Agency of Montenegro (CDA) issues a certificate that the founder (or founders) have no ownership in the companies that are tax debtors in Montenegro;
- Prepare the Statute of the LLC and submit the Registration Form to the CRPS. Optionally you can prepare a VAT Obtaining Form to the Tax Administration of Montenegro and the Request for registration in the customs register to the Customs Administration of Montenegro;
- Prepare documents to open bank accounts needed for the bank;
- Make the seal (stamp) of the company;
- Create an Employment Agreement for the Executive Director and registration at the Tax Administration of Montenegro.
As a result, they will provide you with the following set of documents:
- A decision on the Establishment of the LLC;
- Statutory documents;
- A decision on registration in the Central Register of Business Entities;
- A decision on tax identification number (TIN) of the Tax Administration of Montenegro;
- (Optionally) A decision on the VAT number of the Tax Administration of Montenegro;
- Company seal (stamp);
- Registration into the Customs Register of the Customs Administration of Montenegro;
- Agreement on opening bank accounts in a commercial bank;
- Agreement of Employment for the Executive Director and certificate of employment from the Tax Administration of Montenegro.
Depending on the type of activity codes in the company, the entity might be subject to specific licensing requirements, for example for hygiene in case of a restaurant, for tourism in case of a travel agency, engineering licenses in case of installation works.
In Montenegro, there are several companies, which can provide you professional support on establishing an LLC company and, optionally, advise on the required licenses.
The costs may vary, but in average (excluding guidance in obtaining specific licenses) the total cost is between 500-800,- euro + 21% VAT, depending on the complexity, size and planned business activities of the company.
In the next articles, we will tell you about the taxes, wages and accounting compliances in Montenegro.
If you need a support on establishing a company we can advise companies with very good and long experience of working with foreigners.