The tax system has undergone substantive reforms in order to create a business-friendly environment and attract foreign investors. The tax regime ranks amongst the most competitive in Europe.
PRINCIPAL TAXES IN MONTENEGRO:
-
Personal Income Tax – 9% (11% for gross personal income)
-
Corporate Income Tax – 9%
-
Withholding Tax – 9% on dividends/profit distribution, capital gain, royalties, intellectual property rights, rental income, consulting, marketing and auditing services
Investors are able to remit dividend and interest profits fully, without any restrictions.
Value Added Tax – 21% (reduced to 7% for tourism, 7% on marine related services and 0% for some basic products).
Another important aspect is the use of euro as currency. It has a positive impact on foreign investors, since it significantly reduces inherent foreign exchange risk as well as inflation risk when conducting business in Montenegro.
In late 2010, Montenegro was granted candidate status for European Union Membership and in June 2012, the European Council opened accession negotiations. In December 2015, the country also received a formal invitation to become a member of NATO and finally became a member in June 2017.
The country is dedicated to improving luxury tourism and infrastructure. International bodies such as the World Bank, the European Investment Bank and the EBRD have partnered with the Government of Montenegro and foreign engineering firms to improve the country’s infrastructure. It is predicted that Montenegro will become one of the hottest tourist destinations in the following years. It also has the potential to become a magnet for investment. Apart from tourism, there is also significant potential in real estate, infrastructure, agriculture and renewable energy.
REASONS TO INVEST
-
Dynamic economic growth and development
-
Multi-ethnic harmony and political stability
-
Strategic geographic location, full sea access
-
Foreign and domestic investors have the same rights
-
Easy business start-ups (four days to set up a company)
-
The tax system is one of the most competitive in Europe (9% tax rate)
-
Euro as the national currency
-
Excellent quality of life
-
Hub for regional business
-
Qualified human resources
-
Young population with multilingual talent
