Foreign investors may invest in any industry and are free to transfer funds, assets and other goods, including profit or dividend. Foreign investors enjoy national treatment, that is to have the same status as Montenegrin citizens.

The tax system for foreign investors is the same as for local business entities.

• Corporate income tax amounts to 9%.
• The tax rate on personal income is 9% . Upon payment of corporate income tax, business, entities operating in Montenegro have the possibility to transfer funds to their accounts abroad at the end of the year.
• There are two VAT rates, which are the standard rate of 21% and the reduced rate of 7% .
• Real estate tax rate is proportional and amounts to 3% of the tax base.
• The contributions for compulsory social insurance are:
  • Contribution for compulsory pension and disability insurance
  • Contribution for compulsory health insurance
  • Contribution for unemployment insurance.

The economic cooperation agreements aim primarily to establish an institutional form of cooperation through the strengthening and promotion of economic interests.

These agreements identify the areas of mutual interest, with particular emphasis on agriculture, water management, energy, research and development, construction and infrastructure, transport and logistics, environmental protection, tourism, investment promotion, cooperation in the field of SMEs, ICT and services.

20 agreements on economic cooperation are in effect in Montenegro with the following countries:

Romania, Austria, Bulgaria, China, Hungary, Qatar, Serbia, Turkey, Macedonia, Slovenia, Greece, Croatia, Germany, Spain, Azerbaijan, UAE, Czech Republic, the Slovakia, Albania, Argentina.

These agreements ensure further enhanced mutually beneficial cooperation between two countries, by establishing an adequate legal framework for cooperation in the field of investment. They define the conditions for investments, allow free transfer of funds, and regulate the right of subrogation, compensation in the event of expropriation and settlement of disputes between the countries themselves.

24 agreements on the mutual promotion and protection of investments are in effect in Montenegro: namely with: Austria, Slovakia, Serbia, Czech Republic, Denmark, Finland, Qatar, Macedonia, Malta, France, Greece, the Netherlands, Israel, Cyprus, Romania, Lithuania, USA, Germany, Poland, Spain, the Switzerland, Azerbaijan, Moldova, and the UAE.

Implementation of these agreements implies greater volume of trade and facilitation of foreign investments and joint access to third markets.

Montenegro has FTAs with the following countries: Russian Federation signatories of CEFTA 2006 Agreement, Turkey, Ukraine and the EFTA states.

Following ratification by all the EU member states, the Stabilization and Association Agreement (SSA) with Montenegro came into force on 1 May 2010.

The SAA is the international agreement between the signatory and the European Union setting the legal framework for mutual cooperation and gradual harmonization with the European standards.

The Decree on fostering direct investment sets forth the financial incentives for new investment in Montenegro, as well as for expansion or diversification of the existing ones; it aims to improve the business environment and enhance the competitiveness of the economy.

The Government of Montenegro adopted the Promotion Program of Business Development, which included the plan for development of Business Zones. Business Zones are unique entities at the territories of the respective local governments. They are partly or fully connected to the utilities. Potential investors of the Business Zones will have tax and administrative reliefs both at the national and local level.

There are two types of Business Zones. Business Zones of Strategic Importance, designated and managed by the Government of Montenegro, and Business Zones of Local Importance, designated and managed by the local governments.

Investors in both categories of Business Zones will be granted national and local level incentives. At the national level, the employers who hire staff to work in a Business Zone are exempt from the contribution for compulsory insurance paid to salaries and from personal income tax over a period of five years. Local-level reliefs include:

• Lower utility and other fees
• Favourable lease/purchase of premises within the business zone
• Lower or zero surtax to PIT
• Lower real estate tax rate
• Opportunity to define a favourable public-private partnership model

Access to utilities, where required.is situated