Company formation in Montenegro is a quick process that can be cost-effective with a fast incorporation time which saves you, the foreign entrepreneur, time and energy.
The first step to forming a company in Montenegro is to decide on the type of company you want to incorporate. There are five business entities that foreign investors can establish in Montenegro which are limited liability companies; joint-stock companies; public limited liability companies; general partnerships; and limited liability partnerships. Entrepreneurs can also elect to establish a branch of a foreign company in Montenegro. This leaves the business owner with many options and he/she will need to take a closer look at the regulations of each type of business entity to judge the best fit for his/her business activity.
The top two companies that are formed in Montenegro are Limited Liability Companies and Joint-Stock Companies because they are both offer limited liability which protects the personal assets of the business owners. Out of the two business entities, Limited Liability Companies are the most popular type of company incorporated in Montenegro. It is the business entity with the easiest and cheapest formation process while boasting numerous benefits for foreign entrepreneurs.
General requirements for company formation Montenegro:
In order to form a company in Montenegro, the following will be required:
A company name:
The company name must not be similar to any existing company already established in Montenegro. The unique company name must be reserved at the Trade Register in Montenegro;
All company documents:
All of the documents required for the registration of the specific business entity you wish to incorporate, such as the Memorandum and Articles of Association, must be prepared and notarized;
Submission of documents:
The documents must be submitted to the Companies Registrar of Montenegro which will issue the Certificate of Registration;
Registered local address:
The business owners must register an address in Montenegro in order to incorporate a company;
Corporate bank account:
The business will require a local corporate bank account in order to be established. The share capital will be deposited into this bank account;
The company will be required to register for tax, VAT, and tax for employment purposes with the tax authorities;
A business license:
You will be required to obtain a business license before engaging in any business activity.
Business owners can rent a virtual office, if they do not require physical office space in Montenegro, at a cheaper rate in Montenegro which is faster to set up and, as a result, the company itself can be established faster.
Montenegro also offers shelf companies. Shelf companies are companies that have already been formed and are ready to function as a business, they simply need someone to kick-off the business activity.
A shelf company in Montenegro comes with:
- A unique and registered company name;
- A corporate bank account already set up and ready for share capital deposits;
- The tax identification number of the company;
- VAT registration;
- Incorporation documents, which can be changed and amended depending on the requirements of the new company owner;
- A company director.
As you can see, a lot of the requirements for company formation Montenegro have already been ticked off of the list with a shelf company. The government of Montenegro also allows for both locals and foreigners to purchase shelf companies. The purchasing of a shelf company will depend on the type of business available and whether or not the type of business is compatible with the new owner’s business activity requirements.
The shelf companies that are registered in Montenegro are registered as Limited Liability Companies which is an advantage because Limited Liability Companies boast numerous benefits such as 100% foreign ownership, low share capital requirements, and the company will only require one shareholder and one director who may be the same person and he/she may be local or foreign.
The new owner can also change the name of the company if he/she desires, the company director, the activity of the business, the legal structure of the company, the legal address of the company and the share capital. It is mandatory that the Articles of Association be updated with the new owner’s details and that a business license is obtained for the company.
Deciding whether to buy a shelf company or incorporate a new company in Montenegro is a personal decision, however, it is important to note that a shelf company is often more expensive than the process of establishing a new company. The legal entities are also restricted when purchasing a ready-made company. There are no restrictions on legal entities when establishing a new company. The biggest deciding factor is time as shelf companies can begin trading faster. However, LLC formation in Montenegro is also very quick. A company can be established and trading within 2 short weeks.