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A step-by-step procedure for setting up a new Montenegro company

This post is a further guide to our main article on setting up a Montenegro company and provides a complete checklist of tasks and procedure for registering a Montenegro company.

Stage 1: Pre-registration Tasks

The following pre-registration guide can help you in the planning, organization and information collection for your incorporation application. You should use it to coordinate your activities before you submit the application.

Decide whether you going to register the company yourself or hire a professional firm?

But Montenegro resident individuals have the choice of doing the application on their own or hiring a professional corporate services firm. Given the legal nature of setting up a company and its ongoing compliance, the use of a professional firm is highly recommended; such a firm can assist you with all the pre-registration, company registration process, and post-incorporation tasks and ensure that they are done correctly.

Decide on possible names for the company

Before company name registration process, you should identify few potential names for your proposed company because the name application is subject to review and approval by Montenegro Company Registrar. The following general guidelines apply:

  • The name should not resemble an existing business name in Montenegro
  • The name must not be an undesirable name in the view of Montenegro government; it should not include vulgar or offensive terms
  • Use of certain words such as “bank”, “insurance”, “university”, and “education” may be subject to control and regulation by Government authorities. The use of such terms will require additional permissions before you can proceed to set up the Company

For 12 months after incorporation, the Montenegro Company Registrar has the discretion to direct you to change your company name if anyone lodges a valid complaint that your name resembles the company or business name of the complainant and/or is likely to be mistaken for it by the general public. Since the company name is an important decision from a marketing and branding perspective, you should choose a name carefully. It is also a good idea to ensure that a relevant domain name is available for the selected company name.

Decide on business activities

When setting up a company in Montenegro, company, you can list up to two main business activities using Montenegro Standard Industrial Classification Code. In cases where a company has more than two business activities, the two activities that generate the most revenue should be selected.

Check for licensing requirements

Certain business types such as restaurant, employment agency, financial advisory, etc. require a license to operate legally. These licenses typically have certain conditions that have to be met (such as a higher minimum paid-up capital, professional qualifications, etc) before a license can be granted. As part of your registration planning activities, you should find out if your business will require a license and that you will be able to meet the license requirements.

Decide on share capital and shareholders

Very often, entrepreneurs first set up their companies with a nominal paid-up capital of 1 EUR  and subsequently increase the capital as necessary. Note that you will need to deposit the paid up capital amount into your company’s bank account immediately after the company registration.You will also need to decide on the initial shareholders and their corresponding stake in the company. A minimum of 1 shareholder (a local or a foreign person or corporation) is required. For a more sophisticated company structure, you may need to think about different classes of shares but for a simple and straightforward structure, you will likely issue ordinary shares only.

Decide on directors of your company

Decide on who will act as the director(s) of your company. A Montenegro company can be registered with a minimum of one director. If it is your personal company, you can act as the director of your company. There is no upper limit on the number of directors. Additional directors can be added anytime later as per your company needs. If you are relocating to Montenegro, you may be able to act as the local resident director after the approval of your relocation visa; alternatively, the firm that you have hired to incorporate your company can offer the services of a local nominee director. Discuss your specific circumstances with your professional services firm to decide how best you can satisfy this requirement.

Decide on registered address

Registered address is the legal address of your company and this is the place where your company’s statutory books are kept. All government correspondence is sent to this address.  If you have hired a professional firm, they will usually offer registered address as a packaged service.

Decide on company constitution

Previously known as Memorandum and Articles of Association, the Constitution of a Montenegro Company is a legal document that sets out the details of company’s name, shareholders, shareholder rights, directors, powers of directors, registered office, meeting procedures, dividends payment procedures, etc. Most new companies can use the sample Constitution that has been made available by Montenegro Company Registrar.

Stage 2: Registration Tasks

Montenegro prides itself with efficiency and transparency of its government and its business friendly policies. Not surprisingly, it takes you four days to start a new company, and the process can be done in the next 3 easy steps.

Apply for Company Name

Before registering a new company in Montenegro, the company name must be reserved. Therefore, application to reserve your proposed company name must be filed first. If the proposed company name does not conflict with any existing names and does not fall into the category of undesirable names, it should take only 10-15 minutes to get the company name approval. Once approved, the name will be reserved for you for 60 days from the date of name approval.

Apply for company registration

File Company Registration Application Form
The online application to register a company can be filed after approval of the company name has been obtained. The following information has to be filed as part of the application:

  • Details of business activities
  • Details of the shareholder(s) and the shares issued
  • Details of the company director(s)
  • Details of company secretary
  • Details of registered office
  • Signed Constitution of the Company

If you use a professional services firm, it can assist in ensuring that the information in your application is accurate and complete. If everything is in order, the incorporation application will be processed within a few minutes and you will receive a notice of incorporation via email. Note that the incorporation approval can take longer if the application needs to be forwarded to additional authorities for further review.

Receive the Notice of Incorporation from the Central Registry

Upon successful processing of the incorporation application, you will receive an incorporation document confirming the registration of the new company in Montenegro. Once you receive this document, your business registration is complete!

Stage 3: Post-registration Tasks

After you register a company in Montenegro you should complete several important tasks to finish the company registration procedure. This short post-registration guide presents all these tasks that are grouped into two categories: short term and long term. The short terms tasks should be completed within a few days after incorporation whereas the long-term tasks should be completed on an ongoing basis each year your company stays in existence.

Soon-after-registration tasks

Here is a list of common tasks that you should review and complete as appropriate for your company soon after successful registration of your Montenegro Company:

  • Buy company seal
  • Open bank account
  • Issue share certificates
  • Set up statutory books
  • Apply for business license(s), if applicable
  • Appoint auditor, if applicable
  • Register for Goods and Services Tax, if applicable
  • Set up bookkeeping and payroll system
  • Get necessary business insurance

Ongoing tasks to keep your company in good standing

To keep your new company in good standing, you will need to satisfy certain ongoing compliance requirements. Failure to comply can lead to penalties and (in serious cases). Non-compliance can also negatively affect your company’s reputation. Here is a list of common compliance requirements:

  • Annual Return filing with Montenegro Company Registrar
  • Annual Tax Filing with Montenegro Tax Authority
  • Notifying Company Registrar of any changes to the legal structure of the company in a timely manner
  • Director’s disclosure
  • Complying with Employment Law
  • Complying with Data Privacy Law
  • Complying with Financial Reporting Standards
  • Complying with applicable rules and regulations of the business licenses

Contact us today if you need help with registration and compliance management of your Montenegro company.

Final Thoughts

Setting up a new company in Montenegro is a rather straightforward and simple process. In most cases, a Montenegro resident, a foreign individual or a foreign company can create a new business entity in a matter of days, if not hours. However, it is advisable to take the assistance of a corporate services firm to guide you through the incorporation process and ensure that the company is set up according to all the requirements.

 

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