As from  the third quarter of 1996, the Republic of Montenegro has  been free to trade under new regulations pertaining to the foreign investments and companies.  

General Provisions  

• Freedom of Enterprise 
• The freedom to establish International Enterprise in the free trade zone of Montenegro is granted to all foreign individuals and legal entities by the terms defined in this law.
• The Incentives 
• The Republic of Montenegro provides tax exemptions and other incentives to encourage the establishment of foreign companies.

• Freedom of Opportunity
• Foreign companies are free to engage in all activity related to the global economy, including but not limited to: international trade, provision of financial, management, and consulting services; development of information technology; real estate activity; and audio-visual production and distribution.
Business Partners 
• Foreign company has no restrictions regarding to its business partners while operating in Montenegro. The companies are encouraged to cooperate with local businesses.
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• Business restrictions
• A company must adjust its operations according to environmental protection laws, health protection laws, and state security codes in the Republic.

• Legal Safety
• Benefits such as rights, exemptions, and incentives defined by this law can not be modified for a period of 15 years.

• Ownership Guarantee
• An enterprise in Montenegro will not be subject to nationalization or expropriation.

• Contractual Employment
• Individual employment contracts can be drawn between employer and employees.

• Definition of Terms
• "Foreign legal entity" is any foreign enterprise, company, corporation, partnership, or any other legal entity from abroad.
• "Foreign individual" is each individual who has been foreign resident for at least five years.
• "Company" is any enterprise, corporation or other legal entity which is registered to carry out business in the Republic, in accordance to the law.
• "Qualified individual" is a foreign individual employed by a company, or granted residency in Montenegro.
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• Types of companies
• A company may be established as:

A limited liability company

Shareholding company

Anonymous entities.

• Number of Founders
• A Limited Liability company can be established by one or more founders, and a Shareholding company must be established by at least two founders.

• Registering of the Company
• A company is recorded by Registry of the Finance.

• Founders' Obligations
• To register the company, the founder submits an entry form to the Ministry of the Finance. The founder also encloses:
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The data about the firm, the center of the management, activity and the form of the company to be established

Establishment act or its certified copy

Background information on Representative

Registration Tax Receipt

Deposit Receipt, i.e. the proof of the founder's capital 

• Obligations of the Ministry of Finance
• -The Ministry of Finance is obliged to carry out the registration and to return the results within ten days from the time of registration. 
• -If the Ministry of the Finance fails to refuse the company within this time period, the company is considered registered.
• -A company may not appeal decisions of Ministry of Finance; however, a court may request an appeal.
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• The Lowest Amount of the Founder Capital
• The lowest amount of the capital for the establishment a company is:
• -Limited Liability $US 1,000,
• -Shareholding Company $US 10,000.

• Tax
• Foreign individual is subject to government regulated taxes.

• Confidentiality of Data
• The state guarantees that its officers will protect confidentiality of all information made available to them in the course of their relationship with a foreign company.
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• Independence and Freedom of Operation
• The company is independent and free to operate, gain, and distribute its income, as well as dispose of its property.
• Investment Right
• The company and qualified individual can invest capital in the territory of the republic of Montenegro with government consent.

• Profit Tax
• The company pays profit tax at the rate of 2.5%.

• Tax Basis
• The taxable revenue will be determined by Internationally accepted accounting rules.
• Government Regulation
• The Government will provide further definitions of what can be counted as expenditure when calculating the total revenue.
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• Tax Breaks
• A company is exempt from sales, property, building or land taxes.

• Exemption from Sales Tax
• Qualified individuals do not pay sales tax on cars, yachts, household appliances, or other technical facilities and furniture for personal use. Qualified individuals do not pay any on the transfer of assets for land and buildings used for accommodation. Qualified individual cannot transfer such products and equipment to any legal entity or individual for at least five years commencing the date of their arrival.

• Tax on emoluments of employees
• The emoluments of company employees are subject to tax at the rate of 5%. Contributions on the emoluments of the company employees who are Yugoslavian citizens are payable only to pension and health insurance funds at rates defined by the Government.

• Exemptions from Taxes on Services
• The income of a qualified individual services earned by rendering services outside the Republic are tax exempt.

• Other Tax Exemptions
• All investments made by a qualified individual in Montenegro (such as: business and residential buildings, equipment for the offices and homes, ships, yachts, cars, and similar items) will be tax exempt.
• Tax on the Income of a Qualified Individual
• Personal income tax will be 5%.
• Any pension income will be taxed at a rate of 2%.
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• Exemptions from Inheritance and Capital Gains Taxes
• A qualified individual will be exempt from inheritance tax and any tax on capital gains made in the Republic.

• Fixed Assets Sale
• Fixed assets referred to in Art 19 of this law can be sold by a qualified individual to a local legal entity or to an individual on condition that the sales tax from which he was exempted at the acquisition is now paid.

• Exemption from Fees and Local Charges
• A company or a qualified individual does not pay local administrative fees or other charges.

• Exemption from Customs Duties
• A company does not pay any customs duties or other charges on imported equipment and objects necessary for company activity.
• A qualified individual does not pay duties or other import charges on cars, yachts, household equipment, technical appliances, and furniture to be used personally.

• Exchange Control
• A company or a qualified individual has the status of a foreign company regarding exchange control.

• Tax Returns
• A company is obliged to file a tax return i.e. to submit data necessary for the assessment of the taxable income to the tax authorities.

• Company Bookkeeping
• A company keeps books in accordance to accepted international bookkeeping standards. A company may open accounts at the authorized banks in the Republic.

• Foreign and Local Currency Accounts
• A company may open a currency account at the bank which has considerable authority in Montenegro, and local currency account with National Bank of Yugoslavia.

• Company Closing
• A company may close by ministerial decree. This may occur for the following reasons: 

- if the company fails to comply with provisions of this law, or 
• - if the company is inactive for five consecutive years. Annulment of Company registration occurs within 15 days decree.
• 4. Registration of Ships, Yachts and Air crafts 

• Registration of Ships, Yachts and Aircrafts
• -A Company or an individual is allowed to register a ship, a yacht or an aircraft.
• -If a registered ship, yacht, or aircraft is commercially employed, a foreign legal entity or an individual are obliged to establish a company in accordance with the provisions of the law.
• -If a registered ship, yacht, or aircraft is subject to taxation unless it is commercially employed. 
• Registry of Ships and Aircrafts
• The ministry of Seamanship and Traffic keeps the registry of ships, yachts, and aircrafts.
• Fees for Ships and Aircrafts
• Registration fee will be required.