♦Where is Montenegro?

Montenegro is located in the Middle Mediterranean region. It lies in thesoutheast part of Europe, on the central part of the Balkan Peninsula, onthe southern coast of the Adriatic Sea.

♦What are the neighboring countries?

Montenegro is bordered by Albania on the east, Serbia on the northeast,Croatia and Bosnia and Herzegovina on the west, and Italy across theAdriatic Sea.The length of the borders are 614 km with a coastline of 293km with beaches that are 73 km long.

♦What is the total land area?

Total land area of the Republic of Montenegro is 13,812 km2.

♦What is the capital of Montenegro?

Podgorica is the Montenegrin capital. With a population of 180,000, itrepresents the political, economic and cultural heart of Montenegro.Cetinje is a historical capital of Montenegro.It has a population of 15,137.

♦What are other major cities?

Niksic with a population of 75,000,Bijelo Polje with 50,000 inhabitants, Cetinje with 15,137 inhabitants,Bar with a population of 13,719, Budva with a a population of 10,918...

♦What is the currency in Montenegro?

The Euro is the legaltender in Montenegro.

♦What is the time zone for Montenegro?

West European time zone (GMT+01:00).

♦What is the climate in Montenegro like?

The climate is temperate Mediterranean. In the northern part of Montenegro,it is continental. Average temperature of the air is 27.4°C, summerand 13.4°C, winter. Montenegro has in average 180 sunny days.

♦What is the total population in Montenegro?

According to the latest census conducted in 2003, the total population is662,000.

♦What is the ethnic structure?

Based on the 2003 census, the ethnic composition of the Republic ofMontenegro is as follows:

Montenegrins 43,16 %; Serbs 31.99 %;Bosnians 7.77 %; Croats 1.1 % ;Roma 0.42 %;Muslims 5.07 %;

Albanians 3.01 %; Other 6.18 %

♦What are the main religions?

Montenegro is a multi-religious state with Christian Orthodox, Islamic,Roman Catholic..

♦What is the Human Development Index for Montenegro?

The Human Development Index for Montenegro is 0.799, which meansthat Montenegro has a medium-level human development index,together with Bulgaria (0.796), Russia (0.795), Macedonia (0.793), andBosnia and Herzegovina (0.781).

♦What is the average life expectance?

73.1 years

♦What is the literacy rate?


♦What is the political system in Montenegro?

Montenegro is a democratic, social and ecological state.State form is parliamentary republic.The Parliament has a President and working bodies and commissions. The head of the state is the President elected by universal voting.The Prime Minister is appointed by the members of the National Assembly. The legislative organ of the country is Skupština (parliament), executive - government.

♦How to reach Montenegro by plane?

There are two international airports: in Podgorica and Tivat (80 kmsouthwest of Podgorica). The Podgorica airport offers dailyconnections to major cities in Europe, while the Tivat airport is usedmore for charter flights.The national air carrier is Montenegro Airlines.

♦What does the railroad network look like?

The Montenegrin railway network is 250 km long.The Railroad links the Port of Bar, threwPodgorica, Bijelo Polje and next to Serbia (Belgrade), as well as Nikšić,Podgorica and on to Albania via Tuzi. The Podgorica-Nikšić track is forfreight transport only, while the link from Bar to Podgorica and further toBelgrade is used for freight and passenger transport.

♦What is the total road network in Montenegro?

The road network of the Republic of Montenegro consists of approximately850 km of main roads, 950 km of regional roads and a veryextensive local network (of 5,300 km).

♦What are the possibilities for sea transportation in Montenegro?

There are four ports for passengers and cargo transport in Montenegro,located in: Bar, Herceg Novi, Tivat and Zelenika. The most importantport is the Port of Bar, which is responsible for 95% of the totalpassenger and freight transport. The Port of Bar has conditions for anannual turnover and transport of 5 million tons of cargo. The Port of Baris situated in the southern part of the Adriatic Sea.Due to its favourable position, thePort is the right place for setting up a distribution centre for the wholeregion.There are regular passenger boat lines between Montenegro,Italy and Croatia.

♦How many banks are currently present in theMontenegrin market?

There are 11 banks currently operating in Montenegro:

Hipotekarnabanka, Podgorička banka as a member of SocieteGeneral Group, Crnogorska komercijalna banka NLBMontenegrobanka,Erste banka,Atlasmont banka,Prva banka Crne Gore,Komercijalna banka Budva,Invest banka Montenegro AD Podgorica,First Financial bank AD Podgorica,Hypo Alpe-Adria Bank AD Podgorica.

♦Which securities are traded on the Montenegrincapital market?

Three types of securities are traded: shares of companies, shares ofprivatization investment funds and old currency savings bonds. Twostock exchanges operate on the Montenegrin capital market.

♦How can one get information about the securities he owns?

The Central Depository Agency (CDA) is the agency that executes thedeposit of dematerialized securities, clearing and settling securitiestransactions, and other business associated with dematerializedsecurities.

♦What is the international credit rating of Montenegro?

Standard & Poor's Rating Services assigned a BB long-term sovereigncredit rating to Montenegro. The outlook is evaluated as stable.Montenegro is the 107th sovereign government to be assigned a creditrating by Standard & Poor's.

♦What is total and GDP per capita?

Trend of total and per capita GDP is as follows:

GDP(in mill.€) / 3.025,0
GDP Per Capita (PPP) / 4.877,9

♦What is the annual inflation rate in Montenegro?

Inflation(Average Consumer Price Change) 3.559%

♦What is the total number of employees in Montenegro?

The total number of employees in 2008 was 166221.


♦Who can be a foreign investor?

A foreign investor can be a legal entity or private person.Both haveequal rights.In the Republic of Montenegro a foreign investor can establish a company and invest in it in the manner and under the conditions which are the same as for domestic persons. This means that a foreign investor is given a national treatment,the same regulations applied for domestic investors apply to foreign investors – not any „other“ regulations which might deprive him of any rights or limit such rights.Domestic citizens can also obtain foreign investor statusif they have been living abroad for more than a year.

♦What are the possible forms of foreign investment?

Foreign investment can take the form of money, securities, objects,services and assets rights.Inland investment can also take all of thesame forms.

♦What amount of investment is required?

There is no limit.The amount of investment is stated in the investmentcontract or other act prescribed by law.

♦Who can join in a mutual investment?

Foreign investors can invest with one or more foreign investors, inlandinvestors, or a combination of foreign and domestic investors.

♦Can foreign investors acquire rights to real estatein Montenegro?

Foreign persons can acquire rights to real estate, in Montenegro, suchas company facilities, place of business, apartments, living spaces andland for construction. Additionally, foreign persons can claim propertyrights to real estate by inheritance in the same manner as a domesticcitizen.

♦Can foreign investors be taxed differently than domesticinvestors?

Foreign investors cannot be taxed differently than domestic investors.

♦What are the rights and obligations of the foreign investor?

By his/her investment, the foreign investor has made it his right to takepart in the operation and/or management of a company, to retrieve allinvestments and all capital (in cases predicted by contract or founding act), to take part in profits, to transfer and reinvest profits including tradeof currency, and to make use of all rights guaranteed by the domesticlegal framework.


♦Is it complicated to register your business?

No. Actually according to OECD, Montenegro is champion in the regionfor business registration.

♦How long does it take to register a business?

It takes 5 working days.

♦What is the minimum financial requirement for a limitedliability company?

1 euro.

♦Which institution is in charge of business registration?

The Central Register of the Commercial Court is in charge of businessregistration. It has an electronic database of registered businessentities, contracts on financial leasing and pledges.

♦How many documents do you need to register LLC?

Three documents: Founding decision, Bylaws and Form for specifictype of company.

♦What types of companies are permitted by the Montenegrinlaw?

Montenegrin law permits establishment of six types of companies, themost common being:

Limited Liability Company (d.o.o.)

Minimum capital requirement €1.

Joint Stock Company (a.d.)

Minimum capital requirement of € 25,000.

General partnership (o.d.)

Two or more personsMinimum capital requirement – no minimum equity requirement.

Limited partnership (k.d)

Two or more individuals:Min. capital requirement - no minimum equity requirement.


Min. capital requirement - no minimum capital requirement.

Part of a foreign company

Min. capital requirement - no minimum capital requirement.


♦What is the corporate profit tax rate?

The corporate profit tax is the lowest in Europe - 9%.

♦What are Value Added Tax rates?

VAT is calculated and paid at the rate 17% on all supplies of products and services, and imports, unless when exempt or zero-rated.There is a list of products and services wich are realised of paying VAT 7% (medical product, books and news papers).Export products are realised of paying VAT 0% andexemption from VAT tax for(insurance and agencies for reinsurance,banking and financial servicies).

♦What is the withholding tax regulation?

Withholding tax is calculated for dividends,royalities and interests.Withhollding tax rate is 9%.

♦Which countries have signed the Double Taxation Treatywith Montenegro?

Montenegrohas signed a number of double taxation treatieswith the following countries: Belgium, Belarus, Bulgaria, UnitedKingdom, Denmark, Korea, Egypt, Italy, China, Cyprus, Kuwait,Hungary, Macedonia, Malaysia, Germany, Norway,Netherlands,Poland, Romania,Russian Federation, Slovakia, Slovenia, Sri Lanka, Ukraine, Finland,France, Holland, Croatia, CzechRepublic, Sweden, and Korea.

♦What is the regulation on Personal Income Tax?

Taxable income represents the difference between income and recognised losses which the taxpayer had at their realisation. The losses have to be recorded. Tax rates are 9 %. Apart from this, the following contributions on the personal income are calculated at the gross rate: for pension insurance 15%, health insurance 8,5% and the unemployment insurance 0,5% for the employees and 5,50% pension insurance, 3,8 % health insurance and 0,5% unemployment insurance for the employer.
♦What are property tax rates?

The property tax rate is proportional.The property tax rate can total from 0.08% to 0.80% of the immovable property's market value.The local governance unit may set the property tax rates by types of immovable property.


♦What are the conditions for establishment ofemployment relations?

Employment relations may be established with a person who meets the criteriafor the position established, as defined by the employer. The legal baseof employment relations is the labor contract, which can also be signedby invalid persons who are capable of performing the work in question.

♦How can foreigners obtain work permits?

A work permit is a document which is required for foreigners employedin Montenegro. It is issued by the employment bureau in Podgorica. Thevalidity of a work permit can not be longer than the validity of theresidence permit issued to the foreigner by the Ministry of InteriorAffairs. The time for granting a work permit is no longer than 30 days.Work permits can be renewed without obstacles and the procedure isidentical to the first application.

♦Which employment types are stipulated by the law?

A labor contract may be drawn for an indefinite or definite period of time.A labor contract for a definite period of time may be established forspecific engagements such as seasonal jobs, specific projects etc.

♦Is it possible to conclude a part time work contract?

Yes, the labor contract may be concluded for part time work, for a definite or indefinite period of time. The employee who signs this kind ofcontract has the same rights as employees who work full time, inproportion to the time spent at work.

♦Is it possible to conclude a special service contract?

Yes, an employee may conclude a special service contract to performjobs outside the line of business of the employer, and with the aim ofindependent execution of particular physical labor or intellectual work.

♦Is there a minimum wage?

The employee is entitled to a minimum wage for standard performanceand full working hours. Minimum wages are established by mutualconsent of the government, the representative trade union and therepresentative association of employers. Minimum wage is €55.

♦What are full time working hours?

The working week consists of 40 working hours. According to the LaborLaw, it is possible, under particular circumstances, to sign a contractspecifying a minimum 10 hour work week.

♦How many public holidays are there in Montenegro?

Public holidays in Montenegro:

New Year:1st and 2nd of January;

Orthodox Christmas Eve- January 6;

First and second day of Christmas: 7th of January,January 8;

Orthodox Christmas Easter holidays:starting with Good Friday concluding with Monday;

Labor day: 1st and 2nd of May.

Independence Day- May 21,22;

Statehood Day- July 13.

♦Are overtime working hours limited?

Yes, they are limited to 8 hours per week. Overtime is authorized foremployees in the case of a sudden increase in the scope of work, and inother cases imposing the need of completion of unplanned work, withina specific time-limit.

♦What is the minimum annual leave?

For each calendar year, an employee has the right to no less than 18working days of annual leave in a period to be determined by generalact or contract of employment.

♦How long can a maternity leave last in Montenegro?

A female employee shall be entitled to a 365-day maternity leave andleave for nursing a child. During maternity leave, the employee isentitled to the same salary that she would have earned if she hadworked. The salary is paid by the employer, but is fully refunded.

♦In which cases are employees entitled to increased earnings?

The employee is entitled to increased earnings, in accordance with theGeneral Collective Agreement, for overtime work, work on public holidays,work at night and work in shifts, with a minimum of:

For work during public holidays: 50% over base wage, per hour

For night work and work in shifts (between 22h and 6h): 80% overbase wage, per hour

For overtime work: 40% over base wage, per hour.

♦How are employees compensated during absences?

For absences on public holidays, annual leave and paid leave, theemployee is entitled to a salary in the amount that he would have earnedif he had worked. The employee is also entitled to compensation ofearnings for absence from work due to temporary inability to work,lasting up to 30 days. The amount equals 100% of the salary if theinability is work related.

♦What is the correlation between net and gross salaries?

In 2010 average gross wage is 702€,while average net wage(without taxes and contributions)is 471€.

♦In which cases does the employer have the right to terminatean employment contract?

An employer may dismiss an employee for just cause related to theemployee's work ability and behavior, as well as the employer's needs;If the employee has unexcused absences from work longer than5 days consecutively or 7 working days with breaks;If an employee violates work duties and obligations as determinedin the contract of employment;If the employee fails to respect work discipline;If the employee works for another employer, without authorizationof the employer with whom he/she has a full-time labor contract;If the employee does not show appropriate results during theprobationary period.

♦How are lay-off costs regulated in Montenegro?

An employee, whose contract of employment has been terminated dueto unsatisfactory performance at work or due to lack of required qualificationsand ability, is entitled to a severance pay. The minimum amount,in the Republic of Montenegro, is six average wages, according to theLabor Law.