Residency and Tax Residency in Montenegro and how you can achieve it

12 Aug 2019
Written By Jonathan Howe
Temporary and Permanent Residency in Montenegro
Relocating to Montenegro is an exciting and rewarding process that will enrich your life. The sun, sea, healthy lifestyle, and Mediterranean culture make Montenegro the perfect place to live, to retire, to start a business or to work remotely as a “Digital Nomad.” However, if you don’t understand how the residency system in Montenegro works for foreigners, then you could make a mistake at the first hurdle.
The important topics that this page covers, are the regulations around how long you can stay in Montenegro, how to obtain a Montenegro Residence Permit and how the tax residency in Montenegro works for foreigners.
If you already know that you are interested in moving to Montenegro, but would like personalized advice on the process and how to get started, contact us to book a consultation call!
What Types of Montenegro Visas for Foreigners?

Tourist visas and visa-free travel

The citizens of many countries, including Australia, Canada, the EU, UK and US, can enter Montenegro without a visa and stay for up to 90 days if they have a passport. EU citizens can enter Montenegro with only a government ID card and stay for up to 30 days.
Holders of other passports will have to apply for a visa that allows for stays of up to 90 days.
Holders of non-visa-free passports may enter Montenegro visa-free for 30 days if they also hold one of the following visas: Ireland, United Kingdom, USA, Schengen.

Montenegro Tourist Visa - Type C

Any foreign tourists who do not hold a passport that allows visa-free entry to Montenegro will be required to apply for a Type C Visa (Montenegro Tourist Visa).
This application can be made at the nearest Montenegro Embassy, or at the Serbian embassy if one is not available.
There are specific requirements that must be satisfied in order to be eligible for a Montenegro Tourist visa, including an invitation letter from a Montenegrin citizen or a Montenegrin Legal Entity, such as a tourism-based company. All applications must be approved by the local police department, the Ministry for Internal Affairs and the issuing embassy.

Montenegro Business Visa - Type D

Any foreign business visitors who do not hold a passport that allows visa-free entry to Montenegro will be required to apply for a Type D Visa (Montenegro Business Visa).
This application can be made at the nearest Montenegro Embassy, or at the Serbian embassy if one is not available.
There are specific requirements that must be satisfied in order to be eligible for a Montenegro Business visa, including an invitation letter and special “Guarantee” from a Montenegrin citizen or a Montenegrin Legal Entity, such as a Montenegrin company or organization. All applications must be approved by the local police department, the Ministry for Internal Affairs and the issuing embassy.
Montenegro Residence Permits
With Montenegro edging closer each year to EU membership, a central position close to major transport hub cities and a natural environment most people only dream about living in, it is no surprise that many people visit once and then decide they want to stay forever!
If you want to stay in Montenegro for longer than the maximum stay your passport allows (with or without a visa), then you will need to apply for a Montenegro Residence Permit which will allow a stay of up to 12 months.
Montenegro is a very open country in its approach to inviting foreigners to visit for tourism and business. It is also very open to allowing foreigners to obtain residency in Montenegro, providing they meet some basic criteria and agree to follow some very simple rules.
What are the Types of Residence Permits in Montenegro?

Montenegro Temporary Residence Permit (privremeni boravak)

To stay in Montenegro longer than 90 days (or 30 days depending) you need a temporary residence permit. This permit lasts for up to a year as long as the requirements are met (e.g., employment, studying, property ownership) They can be renewed each year which can lead to permanent residency after 5 years.

How can I apply for Temporary residency in Montenegro?

There are several acceptable reasons to apply for temporary residency in Montenegro, but the two most popular are:
  1. Temporary residency by property ownership.
  2. Temporary residency by Work Permit.

Montenegro Permanent Residence Permit (stalni boravak)

These last for five years and can be renewed. This grants all the privileges of Montenegrin citizenship, except voting and carrying a Montenegrin passport.

How can I apply for a Permanent Residence Permit in Montenegro?

Currently, to be eligible for permanent residency in Montenegro you must have:
  • 5 years of uninterrupted Temporary Residence and a language test.
  • A criminal record background check with no serious criminal history, no unspent convictions or outstanding warrants.
How Can I get Citizenship in Montenegro?

There are officially two options for obtaining Montenegrin citizenship:

  1. While there is a Montenegro Citizenship by Investment program, only a handful of applicants have ever been approved and the whole program is under review.
  2. The most accessible method for most people of obtaining Montenegrin citizenship is to hold Temporary Residence for 5 years, followed by 5 years of Permanent Residence, after which you may be eligible for Montenegrin citizenship.
How can I Obtain Temporary Residency in Montenegro?

Temporary Residency by Property Ownership

If you are the owner of residential property in Montenegro then you are eligible to apply for a temporary residence permit.
While there are some requirements to qualify, they are quite basic as long as the property is registered as a legal dwelling in the Katastar (national property register).
It is essential that applicants for temporary residence permits have no outstanding warrants or serious crimes on their record. This is proven via an original Criminal Record Background Check Certificate from the applicant’s home country.

Temporary Residency by Company Formation

Foreign citizens can start a company in Montenegro in order to operate their own business. The main advantage of this is that the director of that company is eligible for an annual work permit by meeting some simple requirements, which are very similar to those for Temporary Residency by Property Ownership.
This a more expensive option as not only will you need to operate a business, but you are required to pay yourself a minimum salary as well as taxes and social contributions.
In this situation, the married spouse of the director and any children of dependent age can also be issued a residence permit as dependents of the company director.
What are the Tax Residency Rules in Montenegro?
While not tax-free the tax system in Montenegro is one of the most attractive in the world, especially when combined with the lifestyle that can be achieved here.
Depending on whether or not your home country has a Double Taxation Avoidance Agreement with Montenegro, you may be able to relocate your own tax residency to Montenegro, whilst achieving non-resident status for tax purposes in your own country.
How Much are Income Taxes in Montenegro?

Personal Income Taxes in Montenegro

Income taxes in Montenegro are significantly lower than many other countries, with the base income tax rate being 9% for both corporate and personal income tax and 15% for higher rates of domestic and worldwide income.
According to PWC - Worldwide Tax Summaries, personal income for foreigners is taxed in the following manner:
“From January 1st 2022, Montenegro introduced a progressive taxation of salary:
  • Salaries up to EUR 700 (gross) are exempt from tax;
  • Salaries ranging from EUR 701 up to EUR 1,000 (gross) are subject to 9% tax;
  • Salaries from EUR 1001 (gross) are subject to 15% tax.”

"One of the biggest changes in 2022 is the introduction of a new rate of income tax for entrepreneurs:
  • From EUR 8,400.01 to EUR 12,000 is subject to 9% tax;
  • From EUR 12,000.01 is subject to 15% tax.”

Corporate Income Taxes in Montenegro

“Entities operating in Montenegro are subject to progressive corporate profit tax (CPT). Applicable tax rate depends on the realized profit of taxpayers and tax rate varies from 9% -15%. Progressive tax rate are as follows:
  • On the profit up to EUR 100,000, the tax rate shall be 9% fixed;
  • On the profit from EUR 100,000.01 to EUR 1,500,000, the tax shall be paid in the amount of EUR 9,000 fixed + 12% on the profit above EUR 100,000.01;
  • On the profit above EUR 1,500,000, the tax shall be paid in the amount of EUR 177,000 fixed + 15% on the profit above EUR 1,500,000.01.
Resident taxpayers are taxed on their worldwide profit. Non-resident taxpayers are taxed on their Montenegrin-sourced income or income attributed to their Montenegrin permanent establishment (PE). Non-residents are also subject to withholding tax (WHT) on income sourced in Montenegro.
(There are more details to the regulation of income taxes in Montenegro for both domestic and foreign income, which are broader than the scope of this article).
Which Countries have Double Taxation Treaties with Montenegro?
The following list of countries have double taxation treaties with Montenegro at the time of writing this article:
Albania, Austria, Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Italy, Ireland, India, Korea, Kuwait, Latvia, Macedonia, Malaysia, Moldova, Malta, Holland, Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, Sri Lanka, Sweden, Switzerland, Turkey, Ukraine, United Kingdom, and the United Arab Emirates. Income tax treaties with Spain and Qatar are pending.
A Brief Summary of the Residence system for foreigners in Montenegro
As you can see, Montenegro offers an attractive opportunity for a second residence for foreigners.
For retirement and property ownership, it offers the ability to live on the beautiful Adriatic coast at fraction of the cost in neighbouring European or EU countries. Check out our article about the Cost of Living in Montenegro.
By setting up a company in Montenegro foreigners can take advantage of the low rates of taxation while living here full time with an annual work permit and permits for their family.

If you would like to learn more about the process of moving to Montenegro and gaining temporary residence through any of these methods, then please get in contact to arrange a consultation call.
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