Montenegro

Ease of Doing Business Rank: 50

Overview

 

Geographic location

Montenegro is a southeastern European country. The Adriatic Sea lies to the west, Bosnia and Herzegovina lies to the north, Albania to the south, and Serbia and Kosovo to the east.

Spoken language

Montenegrin is the official language of Montenegro. However, according to the 2011 census 42% of the population speaks Serbian, while only 37% declared Montenegrin their native language.

Recognized minority languages include Albanian, Bosnian and Croatian.

Some Montenegrins speak English in tourist areas, but it is uncommon in other regions. Older residents may speak German, Italian or Russian.

Population

The 2019 population estimate is 687,987.

The largest city is Podgorica with a population of 150,977. All other cities and towns have populations of less than 60,000.

Popular industries

The top industries in Montenegro are steel and aluminum production, agricultural processing, consumer goods and tourism.

Education

The Times Higher Education World Rankings only includes one Montenegrin university in its rankings, and none in its top 1,000 ratings.

The Legatum Prosperity Index ranks Montenegro’s educational system 54th out of 149.

Popular entity types

The most common type of business entities in Montenegro are Entrepreneurship, Limited Liability Company, Joint Stock Company, General Partnership, and Limited Partnership.

The overwhelming majority of businesses are in the form of a Limited Liability Company.

Montenegrin incentives for business

Montenegro offers several notable incentives for business. These include an eight-year tax exemption for new production companies in underdeveloped municipalities, up to a maximum of EUR 200,000. However, the incentive is industry-specific.

NGOs may also enjoy a corporate tax reduction of EUR 4,000, providing their profit directly relates to organizational goals.

The country also offers a 6% discount when companies pay their corporate profit tax by the prescribed deadline.

Montenegro also offers a foreign tax credit equal to the amount paid in the foreign country, but not exceeding the amount due in Montenegro.

History & Features

 

Main cities for business

Podgorica is the capital city of Montenegro and the financial center of the country.

Popular historical & tourist attractions

Kotor is a UNESCO world heritage site as it was an important artistic and commercial center during the Middle Ages. The site was restored after a major earthquake and includes four Romanesque churches, town walls and other historic buildings.

Cetinje is the former capital of Montenegro. It includes Montenegro’s National Museum, the well-reserved palace of King Nikola’s Court, the Cetinje Monastery and the official residence of the President of Montenegro; the Blue Palace.

Budva’s old town is a major attraction as it is one of the oldest settlements on the Adriatic coast. Its stone walls were built by the Venetians and surround a medieval old town. The area also includes many religious sites such as the Church of Santa Maria in Punta, established in the 9th century.

The Ostrog Monastery is the most important site in Montenegro for Orthodox Christians. It was built into a cliff face 900 meters above the Zeta valley. It is one of three most visited Christian destinations on the planet attracting almost a million visitors annually. It is best known for its cave-like chapel and human ingenuity.

Montenegro also has many areas of outstanding natural beauty. The Blue Cave is only accessible by the sea and features iridescent blue waters, swimming and snorkeling.

Lake Skadar is the largest lake in the Balkans and an important wetland and bird sanctuary. It is home to the endangered Dalmatian pelican, white great egrets, cormorants and more.

The Tara River canyon reaches 1300 meters, over six times the depth of the Grand Canyon. The river offers rafting opportunities and spectacular canyon views.

In the northern region in the Durmitor range a national park with eighteen glacial lakes known as mountain eyes is one of the country’s jewels. The most visited lake is Black Lake as it offers views of the Bear, a unique rounded mountain in the distance.

History

Illyrians were the first settlers in the Balkan region and later Greeks established colonies in the region too.

By the 3rd century BC, Romans had arrived. They eventually absorbed the Balkans into their provinces. When Roman power subsided, nomadic tribes invaded the area. Slavic tribes eventually settled and formed a semi-independent dukedom by the 9th century.

However, their power began to decline at the start of the 12th century and nobles ruled the region for several centuries. Later, Venice dominated the coast and the Ottomans occupied the north. The rest of Montenegro was independent.

By 1516, Montenegrin clans had united under a leader and formed a theocratic state. These leaders begrudgingly agreed to Turkish rule. After centuries of domination and many uprisings, the Principality of Montenegro and the Ottoman Empire went to war between 1876 and 1878. The war ended with Montenegrin victory and Montenegro became a sovereign nation in 1878.

Montenegro became a kingdom in 1910, but was occupied by Austria-Hungary during World War I. After liberation by the Allies, Montenegro united with Serbia to become the Kingdom of Serbia in 1918.

By 1922, Montenegro was part of the newly-formed Kingdom of Serbs, Croats and Slovenes. This eventually became the Kingdom of Yugoslavia in 1929. During World War II, Italian forces occupied the Kingdom of Yugoslavia and created the puppet Kingdom of Montenegro under fascist control.

In 1944, socialist Partisans liberated the area and Tito acknowledged Montenegro’s massive contribution to the war by recognizing it as a constituent republic of the Socialist Federal Republic of Yugoslavia.

In 1992, the larger republic dissolved, but Montenegro and Serbia formed a smaller Federal Republic of Yugoslavia. In 1996, Montenegro broke ties with Serbia, but by 2002 they were negotiating the future of the republic. By 2003, their union was called Serbia and Montenegro. Finally in 2006, Montenegro declared independence.

Today, Montenegro operates as a parliamentary republic. They are transitioning to a market system.

Other relevant facts

Almost half of the population identifies as Montenegrin (45%), followed by Serb (29%), Bosniak (8.6%), Albanian (4.9%), Roma (1%), Croat (1%), Serbo-Montenegrin (0.3%), Egyptian (0.3%) and Montenegrin-Serb (0.3%).

Most Montenegrins are Orthodox Christian (74.24%), followed by Islamic (17.74%) and Roman Catholic (3.54%).

Additional Information for Business

According to Forbes’ 2019 Best Countries for Business, Montenegro is the 72nd best country in the world for conducting business.

The 2019 Index of Economic Freedom rates Montenegro 92nd globally and states, “The government needs to strengthen public-sector finances and rein in the large current-account deficit, but the combined effects of large public infrastructure investments and several expensive new social programs have directly challenged fiscal sustainability. The court system remains vulnerable to political interference and inefficiency.

World Bank’s “Doing Business” rankings rate Montenegro 50th for ease of doing business in the world.

Montenegro Entity Support Services by Blueback Global

Blueback Global provides a one-stop integrated solution to managing all aspects of your global operations. We can take the burden off you or your company’s internal resources by managing Entity Setup, Local Payroll, Accounting, Tax Reporting, HR Admin and Regulatory Compliance matters associated with operating in a foreign country. Our services are designed to be flexible and customized, so whether you are starting from entity registration, or have already registered but need support in setting payroll or hire employees, we can help at every point of the process.

The common scenarios that may give rise to the need for Blueback Global’s services include the following:

With our integrated approach, you can expect the following experience:

We have an initial complimentary meeting to discuss the scope, objectives and plans for your expansion plan into Montenegro. After this meeting, you can expect a follow-up proposal from Blueback Global within 1 to 3 business days, that outlines that the approach, scope of work and expected deliverables and outcome. Thereafter, our implementation team will then work closely with your team to register the local entity, set up payroll, accounting process, employee social security and benefits. We will then develop a mutually agreed timeline and approach for ongoing payroll, accounting, tax reporting and HR support. Blueback Global will set up a compliance calendar so that you know exactly what and when compliance items such as tax reporting and payroll returns are due. We will of course facilitate all of these, so you do not have to keep track of the compliance dates.

Our goal is to make the process as smooth, simple and successful as possible, and remove the anxiety of operating in a foreign location, to deliver a great customer experience.

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