Tax system in Montenegro

Foreign companies in Montenegro are guaranteed an equal legal treatment as local companies. Foreign investor can operate in Montenegro either as a legal entity or as a sole trader. The term “foreign investor” applies to a company that has been set up in Montenegro by a foreigner, or foreign legal entity, whose share of investment capital is higher than 25% of the total capital invested. There is no limit on the amount of capital invested in Montenegro. Foreign investors are encouraged to invest freely within any industry. Foreign investors can purchase all types of property, such as commercial property, office space, residential property, or land for further development. Investing in Montenegro is safe and reliable. Several major international insurance companies now provide insurance policies to the foreign companies operating in in Montenegro.

Tax system

The tax system in Montenegro consists of:

• Corporate Income Tax – The tax rates on taxable profits are:
  9% on profit up to €100,000.00
  12% + €9,000 on profits from €100,000.01 to €1,500,000.00
  15% + €177,000 on profits over €1,500,000.01

• Personal Income Tax – 9% or 15% (applicable on gross monthly wages above €1000)
• Value Added Tax (VAT) - Two positive rates of value added tax (VAT) are applied:
  1. standard rate of 21%
  2. the reduced rate of 7%, and the zero rate
•  Real Estate Tax – this amount depends on the municipality where the property is located
•  Real Estate Transfer Tax:

For properties up to €150.000 Real Estate Transfer Tax is 3% of the value of the property;

For properties over €150.000 the tax is €4.500 + 5% of the amount that exceeds €150.000;

For properties over €500.000 the tax is €22.000 + 6% of the amount that exceeds €500.000

(in case of buying newly built property, transfer tax is not applicable)

• Social security contributions – contribution for compulsory pension and disability insurance, health insurance and unemployment insurance
• Excise duties
• Fees – administrative, court, utility, and registration fees
• Customs duties – According to the law, investors may be entitled to exemption from customs duties