Montenegro major tax and investment incentives for foreign investments 

Montenegro offers a range of tax and investment incentives aimed at attracting foreign investors and fostering economic growth. The incentives are primarily designed for entrepreneurs, micro, small, and medium-sized enterprises, and cover various economic sectors such as agriculture, tourism, innovation, and renewable energy. Here are some of the key tax and investment incentives available in Montenegro:

1. Corporate tax incentives

• Low corporate tax rates: Montenegro has a competitive corporate tax regime with a flat corporate tax rate of 9%, which is one of the lowest in Europe.

• Tax holidays for newly established companies: New companies in underdeveloped municipalities can benefit from tax holidays, reducing their tax liability for a specified period.

• Foreign tax credit: Companies can avail tax credits for income taxes paid abroad, reducing the overall tax burden on foreign-source income.

2. Value-added tax (VAT) incentives

• VAT exemptions: There are VAT exemptions for certain investments, especially for the supply of products and services related to the construction and equipping of energy facilities with an installed capacity exceeding 10 MW.

• Reduced VAT rates: Reduced VAT rates are applied to specific sectors, such as tourism, to promote growth and investment.

3. Customs and duty exemptions

• Exemptions on customs duties are offered for the import of equipment and machinery that are not produced in Montenegro and are intended for use in investment projects.

4. Incentives for research, development and innovation

• Montenegro provides financial and non-financial support for companies involved in research, development, and innovation activities. These include grants, subsidies, and other forms of financial aid to encourage technological advancements and innovative business models.

5. Incentives for sustainable development and renewable energy

• The government offers incentives for investments in renewable and hybrid energy projects, including tax benefits, subsidies and grants aimed at promoting sustainable economic development.

6. Real estate and tourism sector incentives

• Foreign investors in the real estate and tourism sectors can benefit from various incentives, such as exemptions from certain property taxes and reduced taxes on tourism-related income.

7. Investment support for job creation

• Montenegro offers support for foreign and domestic investors creating new employment opportunities. These incentives include grants and subsidies for training and hiring local workers, particularly in sectors facing skills shortages.

8. Special investment zones

• The government has designated special economic zones that provide additional benefits, including reduced tax rates, accelerated procedures for business setup and exemptions from certain fees.

The Investment Incentives Inventory for 2024, which includes 62 incentive measures, is regularly updated to reflect changes and ensure that the incentives remain relevant and beneficial to investors   .

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