Registering a Company in Montenegro: How to Start a Business in Budva

Registering a company in Montenegro offers a simplified procedure and an attractive tax climate, as it boasts one of the lowest corporate tax rates in Europe. The country has become popular among foreign entrepreneurs seeking to enter the European market. Choosing the right location and receiving legal support at the outset are critically important. In particular, opening a business in Budva is a strategic decision because the city is not only a tourist destination with high seasonal traffic but also a business hub, offering excellent opportunities for the service, tourism, and real estate sectors year-round.

If you want to open a company in Montenegro for a residence permit and don't know where to start, contact our specialists for a consultation and legal support: +382 69 777 680 Viber/WhatsApp/Telegram

For many foreign citizens, starting or relocating a business is a direct and reliable path to legalization. Citizens of Russia and the CIS countries are actively pursuing the opportunity to obtain a residence permit by opening a company in Montenegro. In this article, we'll detail the step-by-step procedure, required documents, and all the nuances.

1. Why open a business in Montenegro

Opening a company (D.O.O.) in Montenegro offers the following advantages:

• Low taxes
• Access to the European market
• Simplified registration process
• Ability to obtain a residence permit by opening a company
• Stable market
• Low competition in underdeveloped industries
• Friendliness to Russian speakers

All of this attracts entrepreneurs from abroad. Below, we will examine each of these advantages in more detail.

1.1. The lowest corporate tax in Europe

• The corporate income tax rate (Porez na dobit) is a flat 9%.
• The standard VAT rate is 21%, with a reduced rate (7%) for certain tourism services and products.
• Dividend tax is withheld at a rate of 9%.

1.2. Access to the European market

• Membership in the World Trade Organization facilitates international trade transactions. • Duty-free access to the regional markets of Central and Southeastern Europe.
• The country's official currency, the Euro (€), completely eliminates currency risks and simplifies settlements with European partners.

1.3. Simplified Registration and Residence Permit Process

• The company registration process (D.O.O.) takes on average 1 to 3 weeks.
• The minimum required authorized capital is only 1 euro.
• The director has a reliable basis for obtaining a residence permit (VNZ) in Montenegro for the entire family.

1.4. Stable and Growing Market

• A constant influx of tourists guarantees high demand for services, the hotel business, and the restaurant industry.
• High demand for housing and real estate investments ensure the continued growth of the construction industry and related services.
• The country is becoming an attractive hub for remote workers and IT companies due to tax incentives and a comfortable climate.

1.5. Low competition and underdeveloped niches

• High-tech IT sector (Software Development and Outsourcing): Despite attractive tax conditions, the domestic IT services market is far from saturated, especially in specialized B2B software, fintech, and cybersecurity.
• Specialized tourism and services: Ecotourism, agritourism, high-end yacht services (outside of Porto Montenegro), as well as unique themed tours (wine, gastronomy, cycling).
• Modern medical and wellness services: High-quality private medicine, specialized dental clinics, spa centers, and international-class rehabilitation facilities.
• Organic agriculture and processing: There is a huge demand for local organic products (cheeses, olive oil, wine, honey), but supply is still limited. Projects for the advanced processing of local raw materials have high potential. • Modern retail and logistics: Implementation of modern logistics systems (especially for last-mile delivery), specialized online stores, and modern retail concepts in regions remote from the coast.

1.6. Loyalty to Russian-speaking entrepreneurs

• The high percentage of Russian-speaking residents and specialists (lawyers, accountants, agents) significantly simplifies adaptation and negotiations.
• Similar cultural codes and a friendly attitude toward entrepreneurs from the CIS countries facilitate the rapid establishment of business connections.

2. Profitable Business Ideas in Montenegro

• IT Sector: Thanks to a low tax burden (9% corporate tax) and a government program to attract "digital nomads," the country is becoming an attractive hub for startups, outsourcing, and software development.
• Green Energy: Given the abundance of sunny days, mountain rivers, and extensive coastline, investments in solar and wind power plants, as well as energy efficiency projects, are actively supported by the government and subsidized by international funds.

3. Types of Companies in Montenegro

For most foreign investors and entrepreneurs planning to open a business in Budva or any other city, the most suitable and common form is a limited liability company (D.O.O.).

3.1. Društvo sa Ograničenom Odgovornošću (D.O.O. – OOO)

Key advantage: The founder is liable only to the extent of their contribution (minimum share capital is 1 euro). Ideal for small and medium-sized businesses, consulting, IT services, tourism, and real estate rentals. Registration of a D.O.O. directly qualifies the director and their family for a residence permit for opening a company in Montenegro.

3.2. Preduzetnik (Sole Proprietor)

A form similar to a sole proprietorship (SP) or private entrepreneur. Key advantage: Minimal accounting requirements and a quick start. Unlike a D.O.O., the entrepreneur is fully liable for obligations with all of their assets. This form is often used for freelancers and small, low-risk services.

3.3. Akcionarsko Društvo (A.D. – Joint Stock Company)

This form is designed for large businesses requiring significant external investment and a public offering of shares. It requires a significantly higher minimum authorized capital and a complex management structure (Board of Directors). It is suitable for opening banks, insurance companies, and large manufacturing plants.

If your goal is to quickly and safely start a business in the country with minimal risk and obtain a residence permit, registering a D.O.O. is the optimal and most practical solution. Learn more about opening a D.O.O. in Montenegro from our specialists: +382 69 777 680, Viber/WhatsApp/Telegram

4. Why Budva is the best city for starting a company

If you are planning to open a business in Montenegro, Budva offers a combination of developed infrastructure and a dynamic market that is difficult to find in other regions. Budva is not only the tourist capital of the Adriatic, but also a year-round business hub, making company registration in Montenegro the most advantageous.

4.1. Developed Infrastructure and Office Rentals

• A wide selection of commercial real estate is available, from modern office centers in new districts to cozy spaces in the Old Town. Due to constant demand, office space in Budva can be rented on favorable terms and for long-term periods.
• The city is home to branches of all major Montenegrin banks, as well as offices of law and accounting firms specializing in working with foreign capital, simplifying business operations.

4.2. Dynamic Market and High Demand

• High tourist traffic (including from the luxury segment) creates a huge demand for services, catering, hotel, and transportation businesses.
• A constant influx of investors and residents supports demand for construction, design, and renovation services.

4.3. Simplified Legalization and Residence Permit

• All key institutions required for legalization—the Ministry of Internal Affairs, the Social Insurance Fund (Fond PIO), and the Tax Office—are located in Budva or in the immediate vicinity.

5. Step-by-step instructions for registering a company in Montenegro (D.O.O.)

5.1. Preparing and collecting constituent documents

• Checking the uniqueness of the name in the Central Register of Business Entities (CRPS).
• Submitting notarized copies of the founders' and director's passports (if the director is a foreigner, the document must be translated into Montenegrin by a certified translator).
• Determining the minimum authorized capital: 1 EUR.

5.2. Registration in the Central Register (CRPS)

• Drafting the company's founding document and articles of association in accordance with Montenegrin law.
• Submitting the complete set of documents (application, articles of association, and decision on the appointment of the director) to the Central Register in Podgorica or the regional office (to expedite the process, this is usually done in Podgorica).
• After a few days, the CRPS issues a Registration Decision (Rješenje), which serves as legal proof of the company's existence.

5.3. Obtaining a seal and opening a bank account

• Creating a company seal (Obavezna pečaćenja).
• Opening a temporary bank account required for further payments.
• Obtaining a taxpayer identification number (PIB) and registering for the VAT system if turnover exceeds the limit.

5.4. Registration with funds (PIF/PIO) and employment

• A foreign director must be officially employed by their own company. Documents are submitted to the Social Insurance Fund (Fond PIO) to obtain a social security number (JBB).
• Obtaining a registration certificate from the Social Insurance Fund, which is a key document for applying for a residence permit.

After completing these four steps, the company is considered fully operational, and the director can apply to the MUP to obtain a residence permit for opening a company. The entire registration process (D.O.O.) takes on average 1 to 3 weeks.

6. Documents Required for Registering a Business in Montenegro (D.O.O.)

6.1. Documents of Founders (Individuals)

• A notarized copy of the passport. This document must then be translated into Montenegrin by a certified translator (sudski tumač).
• If you are not present in person, a notarized and apostilled power of attorney in the name of your legal representative in Montenegro will be required.

6.2. Documents for the Legal Address and Capital

• Three name options for uniqueness verification in the Central Register (CRPS).
• Documentary evidence of the minimum share capital of 1 EUR (it is sufficient to indicate this in the Articles of Association; the actual deposit can be made later).
• Lease agreement for office or residential premises, which will serve as the official legal address of your new Montenegrin company.

6.3. Constituent Documents

• Company Articles of Association (Osnivački Akt): A document defining the structure, objectives, powers of the director, and the size of the founders' shares.
• Minutes of the founders' meeting (or the decision of the sole founder) on the appointment of the company director.
• An application in the prescribed form, which is submitted to the Central Register of Business Entities (CRPS).

By collecting and properly completing these documents, you will speed up the process of company registration in Montenegro and be able to quickly move on to the legalization stage.

7. Tax Rates for Business in Montenegro

• Income Tax (Corporate Tax): Flat rate of 9%.
• Personal Income Tax (PIT): 9%.
• Dividend Tax: 9%. Withdrawal of profits from a company is one of the cheapest in the region.
• VAT: 21%, but a reduced rate of 7% applies to the tourism sector, basic food products, and certain services.

8. Tax Accounting and Liabilities

D.O.O. companies are required to maintain accounting records in accordance with Montenegrin standards and submit annual reports. Proper recordkeeping and timely payment of social contributions (taxes and levies on wages) are mandatory for maintaining the residence permit of the director and founders, ensuring the legal and transparent conduct of business in Europe.

If you are looking for an accountant in Montenegro or need a business tax consultation, please contact our specialists at GoMonte: +382 69 777 680 Viber/WhatsApp/Telegram

9. How to open a branch of a foreign company in Montenegro

Before starting the procedure, it is important to understand the difference:

• Branch (Poslovna Jedinica): Not an independent legal entity. It is entirely dependent on the parent company, which bears full legal and financial responsibility for its obligations.
• Subsidiary (D.O.O.): Is a separate legal entity.

9.1. Step-by-step registration

• The parent foreign company must adopt and notarize a resolution to establish a branch in Montenegro, indicating its address (for example, to open a business in Budva) and the name of the director.
• All constituent documents of the parent company (Articles of Association, Certificate of Incorporation, and extract from the Commercial Register) must be apostilled in the country of origin and translated into Montenegrin by a certified translator.
• Submission of the application, the resolution on establishing a branch, and all legalized documents to the Central Registry.
• Appointment of the branch manager.

9.2. Tax Status and Reporting

A branch, despite not having the status of a separate legal entity, is required to maintain independent tax records and pay all taxes in Montenegro (9% on profits). The branch's financial statements are included in the parent company's overall financial statements, but its financial results must also be reported to the Tax Administration. Working with a qualified local accountant is critical to comply with local laws and avoid double taxation.

10. How to open a bank account in Montenegro

The Montenegrin banking system is fully integrated into the European financial space and uses the euro (€), guaranteeing stability and transparency of transactions.

10.1. Features of the Montenegrin banking system

All banks operate in accordance with European AML (Anti-Money Laundering) and KYC (Know Your Customer) standards, which require thorough verification of the origin of funds and the company's activities.

10.2. Types of accounts and their purposes

• Company current account (Poslovni Račun): Mandatory for all registered legal entities (D.O.O.). It is used to receive payments, pay employee salaries, and pay taxes. Without this account, it is impossible to fully open a business in Budva or any other city.
• Personal account (Tekući Račun): Used for everyday expenses, receiving salaries, and managing personal finances. A personal account is required when applying for a residence permit.

10.3. Account Opening Requirements and Process

• For individuals (personal account): A passport and proof of residential address (e.g., a lease agreement) are required.
• For legal entities (D.O.O. account): A registration decision (Rješenje) from the CRPS, the company's articles of association, the director's identification documents, and (often) a detailed description of the business activities are required.
• Compliance: Banks may request additional documents confirming the founder's source of funds (e.g., bank statements for the last 6-12 months).

11. How much does it cost to open a company in Montenegro?

11.1. Initial costs for registering a D.O.O.

The legally required share capital is just 1 euro. The main expenses at this stage include government fees (usually up to €50), notarization of documents, and legal translation services (up to €150). The largest expense is legal support for the turnkey registration, which ensures the proper preparation of the Articles of Association, filing with the Central Registry (CRPS), and bank account opening. These services typically range from €300 to €600, allowing you to legally start your business with minimal effort.

Learn more about the cost of a turnkey company registration from our consultants: +382 69 777 680 Viber/WhatsApp/Telegram

11.2. Mandatory Operating Expenses (Residence Permit and Salary)

A foreign director must be officially employed by their own company. With a minimum salary (€600 gross), monthly taxes and social security contributions amount to approximately €100–€130. This is the minimum mandatory payment to maintain legal status. Additionally, monthly accounting fees must be factored in, ranging from €80 to €150. Therefore, regular mandatory expenses for maintaining a residence permit and company operations will amount to approximately €180 to €280 per month.

11.3. Hidden Costs and Rent

Among the less obvious expenses, one should consider office rent. Opening a business in Budva requires a legal address. Renting a small office can cost between €200 and €500 per month.

TOTAL MONTHLY: Regular mandatory expenses for maintaining a residence permit and company operations (accountant + taxes) range from €180 to €280 (excluding office rent).

12. Government Support and Funds

• Investment Fund (IRF): The Investment and Development Fund of Montenegro (Investiciono-Razvojni Fond) offers preferential loans and guarantees for startups and existing DOOs, particularly in the green energy, tourism, and manufacturing sectors. Programs often include reduced interest rates and long grace periods.
• Subsidies and Grants: Competitions for non-repayable grants are regularly announced for innovative projects, small businesses, and companies creating new jobs, which is especially relevant for firms planning to open a business in Budva or Podgorica and hire local employees. • Support for the IT sector: There are special programs aimed at attracting “digital nomads” and IT specialists, including tax incentives and simplified conditions for launching start-ups.

13. Legal and Accounting Support for Business in Montenegro

Successfully opening a business in Budva or any other city in Montenegro is just the beginning. For the long-term and smooth operation of a D.O.O. (LLC), professional legal and accounting support is critical. Using high-quality legal support services ensures that your company registration in Montenegro and subsequent operations are fully compliant with local laws.

13.1. Legal Support

A professional lawyer is indispensable not only during the company registration process in Montenegro but also during the process of obtaining and renewing a residence permit for the company. Lawyers oversee the submission of documents to the Central Registry (CRPS) and ensure the timely processing of all paperwork for the Ministry of Internal Affairs (MUP), minimizing the risk of residence permit denial. Ongoing consultation on employment matters for the director and employees is essential for the correct payment of contributions and taxes, which is the basis for legal status. Drafting and reviewing lease, sale and purchase agreements, and customer contracts in Montenegrin protects your business from potential lawsuits and financial losses.

13.2. Accounting Services

An accountant will help you take full advantage of the low corporate tax rate (9%) and VAT, as well as maintain proper bookkeeping to avoid double taxation. They will also handle the timely submission of monthly, quarterly, and annual reports to the Tax Office (Poreska Uprava) and the PIO Fund, as well as the calculation of salaries, taxes, and employment-related contributions (a key factor in maintaining the director's residence permit).

GoMonte provides accounting services in Budva, as well as legal advice on any matter. Contact us for a consultation: +382 69 777 680 Viber/WhatsApp/Telegram

14. Frequently Asked Questions:

- What are the legal requirements and procedures for opening a company in Montenegro?

For a Limited Liability Company:

• Minimum authorized capital: 1 EUR.
• Appointed director (can be a foreigner).
• Notarized copy of the founder's and director's passport, as well as a legal address in the country (lease agreement).

The procedure includes preparing the Articles of Association, submitting documents to the Central Registry (CRPS), obtaining a registration decision, and opening a bank account. The entire process takes on average 1 to 3 weeks.

- What are the tax obligations for entrepreneurs in Montenegro?

• Corporate income tax: flat rate of 9%.
• Personal income tax: 9%.
• VAT: 21%.
• Salary contributions (for a residence permit): minimum rate of 600 EUR.

- How much does accounting support for a business cost in Montenegro?

The cost of business accounting support in Montenegro depends on the company's volume of operations (VAT, number of employees, transactions).

• VAT-exempt D.O.O. (small business): Monthly legal and accounting services start from €80 to €150 per month.
• VAT-exempt D.O.O. or active operations: The cost may be higher, averaging from €150 to €300 per month.

- What kind of business can I open?

Almost any legal business can be opened in Montenegro. The most promising and rapidly growing sectors are:

• Real estate rentals, travel agencies, catering, and hotel business, particularly relevant for Budva.
• Software development, web design, and outsourcing (due to the low corporate income tax rate).
• Sales, rentals, construction, and repair services. • Private clinics, spa centers (in industries with low competition).

- Is it possible to open a company and obtain a residence permit in Montenegro?

Yes, it is possible, and this is the most common method of legalization.

Company registration in Montenegro is a direct and reliable basis for obtaining a residence permit for opening a company in Montenegro. A foreigner who registers a DOO and appoints themselves as director gains the right to apply for an annual residence permit. This legalization route is also available to their family members.

If you need assistance preparing documents or want to open a business in Budva without the hassle, we are ready to provide full legal support: +382 69 777 680 Viber/WhatsApp/Telegram