TAXES AND TAX PLANNING
Tax advising for residents of Montenegro who are foreigners,
- Submitting private tax declaration,
- Obtaining residence permit,
- Tax planning according to Montenegrin legal system and tax treaties.
The tax legislation of Montenegro prescribes method of ordinary credit when determining the tax liability towards its residents.
Tax rates in Montenegro are among the lowest in Europe. That fact can be very attractive to foreigners for their tax planning if they live in Montenegro more than 185 days in one year.
- Submitting private tax declaration,
- Obtaining residence permit,
- Tax planning according to Montenegrin legal system and tax treaties.
The tax legislation of Montenegro prescribes method of ordinary credit when determining the tax liability towards its residents.
Tax rates in Montenegro are among the lowest in Europe. That fact can be very attractive to foreigners for their tax planning if they live in Montenegro more than 185 days in one year.
FAQ
WHAT ARE THE INCOME TAX RATES IN MONTENEGRO?
The corporate tax rate is 9% and the individual income tax rate is 9%.
Retirements are not taxable in Montenegro.
HOW CAN I GET MONTENEGRO RESIDENCE PERMIT?
You plan staying in Montenegro longer than allowed 90 days and buying a house on Montenegrin coast. I am glad to inform you that property ownership gives you the immediate right for a residence. Foreigners law was changed at the beginning of 2016. and enables foreigners to live legally in Montenegro .
We will be pleased to assist you with obtaining residence permit in Montenegro. Please email us for more information.
WHERE IS YOUR FIRM LOCATED AND DO YOU HAVE ANY ENGLISH -SPEAKING STAFF?
We are located in Bar. We have English-speaking staff, so you will get the reply on your email within 24 hours.
IMMIGRATION POLICY IN MONTENEGRO
Foreign nationals can stay in the country for 90 days within 180 days starting from the day of first entry, without visa. They need to be registered in local office when they enter the country.
If foreign nationals want to work in country, they need work permit.
Required documents for work permit:
- an evidence of having means of subsistence on bank account in Montenegrin bank ( 3650 euros );
- health insurance in Montenegro;
- provided accommodation;
- an evidence that a company who hires are registered in Montenegro;
- written offer of the employer for hiring a foreigner on a particular work position;
- a proof of the acquired level of education and qualification, translated by court interpreter and validated by Ministry of education in Montenegro;
- a confirmation that not being legally sentenced to an imprisonment of more than six months in country of origin ;
Limitation
The work permit will be granted only if the records of the Employment Bureau of Montenegro have on disposal no unemployed persons eligible for employment in positions to which the permit relates. It could take a month to get this document.
There are also an expatriate quotas. Every year the government determines the number of foreign citizen that could get a work permit.
There are no expatriate quotas for foreign nationals who work as a managers or a specialists for companies founded by foreign companies and registered in Montenegro.
Government subsidies for investors
The whole territory of Montenegro is divided into parts. The southern part is developed area and the northern is undeveloped one. New companies established in the northern area are exempted from paying the corporate tax for the first eight years but not above 200,000 EUR for the entire period. These companies are exempted from paying the tax on salaries for four years if they employ people from government list of unemployed persons.
If you bring your own personal assets and real estate into the company you don't have to pay 3% tax. But if you buy real estate as individual you have to pay 3% tax and then you could bring it into your company as a founder's equity without paying any tax. If the company wants to buy real estate, the tax must be paid.
When the company finished financial reports and determined the profit from last year, the tax on profit must be paid. It is 9%. If the founder wants to take some of the profit for his own purpose, he has to pay 9% withholding tax. But if the founder has a tax credit he could use it to deduct this tax obligation. When it comes to that , the tax authorities will check all the documents on which the tax credit was calculated.
Countries that have a VAT system require businesses to be registered for VAT purpose. Businesses that are VAT registered are obliged to include VAT on goods and services that they supply to others (with some exceptions). It is called output VAT. That businesses are obliged to a VAT deduction for the VAT they pay on goods and services they acquire from other VAT-registered businesses. It is called input VAT. Businesses have to pay difference between output VAT and input VAT to the tax authorities. If input VAT is higher than output VAT, we are talking about tax credit.
So, when your company buys equipment and other goods from a company that is VAT registered, you pay the price in which the tax is included. That is your input VAT . For your supplier that is output VAT which they have to pay to the tax authorities.
WHAT ARE THE INCOME TAX RATES IN MONTENEGRO?
The corporate tax rate is 9% and the individual income tax rate is 9%.
Retirements are not taxable in Montenegro.
HOW CAN I GET MONTENEGRO RESIDENCE PERMIT?
You plan staying in Montenegro longer than allowed 90 days and buying a house on Montenegrin coast. I am glad to inform you that property ownership gives you the immediate right for a residence. Foreigners law was changed at the beginning of 2016. and enables foreigners to live legally in Montenegro .
We will be pleased to assist you with obtaining residence permit in Montenegro. Please email us for more information.
WHERE IS YOUR FIRM LOCATED AND DO YOU HAVE ANY ENGLISH -SPEAKING STAFF?
We are located in Bar. We have English-speaking staff, so you will get the reply on your email within 24 hours.
IMMIGRATION POLICY IN MONTENEGRO
Foreign nationals can stay in the country for 90 days within 180 days starting from the day of first entry, without visa. They need to be registered in local office when they enter the country.
If foreign nationals want to work in country, they need work permit.
Required documents for work permit:
- an evidence of having means of subsistence on bank account in Montenegrin bank ( 3650 euros );
- health insurance in Montenegro;
- provided accommodation;
- an evidence that a company who hires are registered in Montenegro;
- written offer of the employer for hiring a foreigner on a particular work position;
- a proof of the acquired level of education and qualification, translated by court interpreter and validated by Ministry of education in Montenegro;
- a confirmation that not being legally sentenced to an imprisonment of more than six months in country of origin ;
Limitation
The work permit will be granted only if the records of the Employment Bureau of Montenegro have on disposal no unemployed persons eligible for employment in positions to which the permit relates. It could take a month to get this document.
There are also an expatriate quotas. Every year the government determines the number of foreign citizen that could get a work permit.
There are no expatriate quotas for foreign nationals who work as a managers or a specialists for companies founded by foreign companies and registered in Montenegro.
Government subsidies for investors
The whole territory of Montenegro is divided into parts. The southern part is developed area and the northern is undeveloped one. New companies established in the northern area are exempted from paying the corporate tax for the first eight years but not above 200,000 EUR for the entire period. These companies are exempted from paying the tax on salaries for four years if they employ people from government list of unemployed persons.
If you bring your own personal assets and real estate into the company you don't have to pay 3% tax. But if you buy real estate as individual you have to pay 3% tax and then you could bring it into your company as a founder's equity without paying any tax. If the company wants to buy real estate, the tax must be paid.
When the company finished financial reports and determined the profit from last year, the tax on profit must be paid. It is 9%. If the founder wants to take some of the profit for his own purpose, he has to pay 9% withholding tax. But if the founder has a tax credit he could use it to deduct this tax obligation. When it comes to that , the tax authorities will check all the documents on which the tax credit was calculated.
Countries that have a VAT system require businesses to be registered for VAT purpose. Businesses that are VAT registered are obliged to include VAT on goods and services that they supply to others (with some exceptions). It is called output VAT. That businesses are obliged to a VAT deduction for the VAT they pay on goods and services they acquire from other VAT-registered businesses. It is called input VAT. Businesses have to pay difference between output VAT and input VAT to the tax authorities. If input VAT is higher than output VAT, we are talking about tax credit.
So, when your company buys equipment and other goods from a company that is VAT registered, you pay the price in which the tax is included. That is your input VAT . For your supplier that is output VAT which they have to pay to the tax authorities.