This small Mediterranean country—known as the perfect blend of gorgeous coastline and dramatic mountains—has much more to offer than meets the eye.
In terms of the business climate, significant progress has been made in the last couple of years towards streamlining business start-up procedures. Many investors have entered the market which has resulted in a remarkable rise of foreign direct investment. But, is there perhaps a development opportunity which might have been overseen? Does Montenegro have the potential to become a regional IT hub?
IT businesses are running the world nowadays. The lure of the digital nomads’ lifestyle has caused the proliferation of flexible, location-independent companies. Tax legislations and European regulations are adapting slower than business development in this sector. For some countries, this transition has already brought opportunities which have been welcomed (for example Estonia), but for others, this can be a crucial moment for further development.
Research conducted among expats and freelancers shows that they consider Montenegro a paradise country. Easy to navigate, they can move from the coast to the north and enjoy a wide range of scenery. Living costs are affordable and the quality of life is the highest in the region. Moreover, the start-up procedures for businesses are simple and fast. It takes no longer than 10 working days to establish a company and open a bank account.
Current tax policies are structured to allow IT businesses to enjoy a number of benefits, including:
• VAT on foreign transactions is 0%
• Corporate income tax is 9%
• Personal income tax is 9%
• There is no obligation for an executive director to spend a certain number of days in Montenegro, which allows for smooth location-independent business operations
• With a residency permit, investors can become tax residents of Montenegro and pay taxes on their worldwide income per Montenegrin rates
What needs to be improved?
• Full integration of PayPal and additional payment processing systems must be completed
• There is a lack of legal, tax and accounting advisers specialised in digital/IT business and transactions
• Lack of proper co-working spaces and culture
The potential of Montenegro in this sector is still unused and unexplored.
Although there is a growing expat and IT community, common initiatives are required to improve the infrastructure.
This development will contribute directly to creating a better future and exploring the entire potential of Montenegro becoming a hub base.
It’s high time to explore all the opportunities Montenegro has to offer. Get in touch with us to discuss your ideas and get specific advice on how Montenegro can become your IT hub, Campden FB writes.