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Open a D.O.O in Montenegro

Updated on Tuesday 08th October 2019

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Foreign investors who come to Montenegro have several business forms they can select form when deciding to open a company. Among these, the private limited liability company or D.O.O (Društvo s ograničenom odgovornošću) is preferred by the majority. This is also the most employed business form by local investors who have companies in Montenegro.

Below, our company formation specialists in Montenegro explain the requirements related to opening a D.O.O. We can assist investors who want to register D.O.O companies in Montenegro with the purpose of operating in various industries.

What is a D.O.O in Montenegro?

With the smallest share capital requested (only 1 Euro), the D.O.O represents the limited liability company in Montenegro. This type of company is the most common form of business in Montenegro. At least one shareholder is necessary for registration. The liability in the company of the shareholder is equal to its contribution at the initial capital.

The maximum number of shareholders in a D.O.O mustn’t exceed 30. The shares are not freely transferable to the public. The company’s management may be assured by a Board of Directors. If a Board of Directors is elected it may appoint a general manager to action in its name.

Requirements for opening a D.O.O. in Montenegro

The establishment of a private limited liability company in Montenegro is subject to several requirements imposed by the Company Law. Among these, we mention the following:

  1. the company must have a registered address in Montenegro (virtual office services are available with our agents);
  2. at least one shareholder who can be a natural person or legal entity, a Montenegro resident or non-resident is required;
  3. at least one manager who is not required to be a Montenegro resident must be appointed;
  4. the company will be registered based on the Articles of Association which must be filed with the Trade Register;
  5. as any local company, a bank account must be opened with a local bank (the share capital will be deposited here).

Once the company is registered, the necessary business licenses must be obtained. The D.O.O. must also register for taxation with the Montenegro Tax Administration. If the company will be involved in trading activities, a VAT number is also mandatory.

Our Montenegro company formation advisors can explain all the requirements related to setting up a D.O.O. We can also handle the preparation of the documents which need to be filed with the Companies Register for quick incorporation.

What is the company registration procedure for a D.O.O in Montenegro?

Registering with the Central Register of the Commercial Court of Montenegro requires a few documents:

  • - the articles of association;
  • - the company structure;
  • - a list with the founders and the board Members;
  • - data regarding these members (names, date of birth, place of birth, place of residence);
  • - the company name and address of correspondence and headquarter;
  • - name of the executive manager;
  • - the names of the persons responsible with the company representatiom;
  • - the proof of payment of the registration fee.

After submitting the correct documents, a Certificate of Registration is issued as evidence. Also, the registration announcement is published in the Official Gazette.

Any change that might interfere must be reported immediately to the Central Register of the Commercial Court (no longer than 7 days from the decision). The amendment becomes valid only after the registration in the Central Registry. 

Annual financial statements are also required. Our company formation experts in Montenegro can give you more details about these financial statements.

Converting a limited liability company into a joint stock company

A limited liability company may be transformed into a joint stock company if certain criteria are accomplished: the minimum share capital is 25,000 Euro paid in full, a decision is taken by the general meeting of the shareholders and the amendments are registered at the Central Registry.  In these types of situations it is recommended to ask for the help of our experts in company registration in Montenegro, who have handled company conversions before and can ease this process for you. In case you would like to start a LLC in another country, for example Moldova, our experts can put you in touch with their partners who can help you set up a SRL in Moldova.

The uses of a Montenegro D.O.O.

One of the reasons for setting up a D.O.O. in Montenegro is because it can be used for various purposes. Among these, we mention the following:

  • - trading activities – the D.O.O. can complete activities in any industry in Montenegro;
  • - holding structure – the D.O.O. can be used as a holding company for holding or controlling shares in other companies;
  • - subsidiary company – the D.O.O. can be used by foreign companies seeking to have a presence in Montenegro;
  • - shelf company – most ready-made companies are registered as private limited liability companies.

The D.O.O. is one of the most versatile types of companies which can be established in Montenegro because of its many uses. Considering the D.O.O. is subject to a few incorporation requirements and a simple and fast company registration procedure, it represents a suitable option for investors seeking to open SMEs in Montenegro (small and medium-sized enterprises).

Taxation of the D.O.O. in Montenegro

One of the most important advantages of the private limited liability company in Montenegro is taxation. As a domestic company, the D.O.O. will be subject to the corporate income tax on its worldwide income in Montenegro. The country has one of the lowest corporate tax rates in Europe of 9%.

It is also good to know that foreign investors owning shares in a Montenegro D.O.O. can benefit from the country’s double tax treaties which will enable them to obtain further tax deductions in their home countries.

As any other company in Montenegro, a D.O.O. is also subject to other taxes, among which the VAT which is levied at a standard rate of 21%. Other lower rates apply depending on the goods or services sold.

Our company registration consultants in Montenegro can offer more information on the taxes which need to be paid by D.O.O. companies here. We can also handle various taxation matters with the help of our in-house accounting department.

Why set up a D.O.O. in Montenegro?

The D.O.O. has many advantages, which is why many foreign investors choose to operate in Montenegro under this business form. Apart from the tax benefits, the D.O.O. is very versatile and can be used for various purposes, which is why it is suitable for completing various activities here.

When it comes to investing in Montenegro, it is very useful to know that foreign direct investments (FDIs) here have increased substantially in the past few years, according to the following statistics:

  • - the country’s FDI stock at the level of 2018 was 5.5 billion USD;
  • - investments in the real estate sector in Montenegro reached 147.2 million euros in 2018;
  • - greenfield investments also grew last year to a total of 17 projects;
  • - Montenegro is the 50th easiest country to do business in at the level of 2019.

If you want to open a company in Montenegro under the form of a D.O.O., our local consultants can help you.

How to liquidate a limited liability company in Montenegro

The liquidation of the limited liability company in Montenegro is made after a general meeting of shareholder’s decision or after a Court decision (in case of bankruptcy or if the law is broken). A liquidator must be appointed during the General Meeting, to carry out the liquidation process. The decision must be sent to the Central Registry and published in the Official Gazette.

After all the company’s debts have been paid, and no creditor is raising another claim, the rest of the remaining assets can be divided between the shareholders; the ones that had invested more have the priority. 

In case you would like to open a limited liability company, our team of specialists in company formation in Montenegro is at your disposal. Contact us now for a personalized offer. 
 

Russian and German investors interested in company formation services, will be put in contact with our partners: Firmengründung in Montenegro and Региситрация компаний Черногорье.

Meet us in Podgorica


Call us now at +382 20 620 312 to set up an appointment with our company formation agents in Podgorica, Montenegro. Alternatively you can incorporate your company without traveling to Montenegro.

As a Radonjic Associates client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Montenegro.

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