Montenegro’s Tax System: A Quick Guide

Montenegro attracts entrepreneurs and investors with its simple and competitive tax system. This guide provides key information to help you understand the main aspects of taxation and business conditions in the country.

Corporate Income Tax

The corporate income tax rate in Montenegro is progressive and depends on company profits:

• 9% for profits up to €100,000.
• 12% for profits between €100,001 and €1,500,000.
• 15% for profits exceeding €1,500,000.

This system makes Montenegro attractive for small and medium-sized businesses as well as large international companies.

Personal Income Tax

• The personal income tax rate is 9% for most earnings.
• This low tax rate makes Montenegro especially appealing for freelancers, remote workers, and self-employed entrepreneurs.

Value-Added Tax (VAT)

• Standard rate: 21%
• Reduced rate: 7% (applies to essential goods such as basic food products, medicines, books, and other necessities)
• Zero rate: applies to exported goods

For small businesses with an annual turnover below €30,000, VAT registration is optional. This is particularly beneficial for service-based businesses.

Social Contributions

Both employers and employees must pay the following social security contributions:

• Pension and disability insurance: 15% (of salary)
• Health insurance: 8.5%
• Unemployment insurance: 0.5%

Real Estate Tax

The property tax rate ranges from 0.25% to 1%, depending on the region and property type. This makes Montenegro an attractive destination for real estate investment, particularly for those planning long-term residency.

Advantages of International Agreements

Montenegro has double taxation agreements with over 40 countries. This helps foreign investorsreduce their overall tax burden.

Simplified Business Registration

Montenegro offers one of the easiest business registration processes in Europe:

• Minimum share capital required is just €1.
• Company registration takes only a few days.
• Simple procedures and business-friendly laws make the country highly attractive for entrepreneurs.

Why Choose Montenegro?

✅ Low tax rates
✅ Progressive taxation adapted to income levels
✅ VAT exemption option for small businesses
✅ Simple and transparent tax system
✅ Strategic location with access to European markets
✅ Business-friendly environment and high quality of life

Montenegro presents excellent opportunities for entrepreneurs and investors. If you seek a stable tax system, minimal bureaucracy, and modern infrastructure, Montenegro is a smart choice.