Residents & Work Permits in Montenegro

Montenegro, a picturesque country nestled in the heart of the Balkans, has become an increasingly popular destination for individuals and families seeking residency opportunities. 

The appeal of Montenegro lies in its stunning natural beauty, affordable cost of living, and business-friendly environment. In this comprehensive guide, we will delve into the various types of residency permits available in Montenegro, the process to obtain them, the real estate market, taxation, and the Montenegrin lifestyle.

Montenegro Residence and Citizenship Program 2023

Montenegro has gained popularity as an attractive destination for residency due to its natural beauty, cost of living, and business-friendly environment. This comprehensive guide covers various types of residency, real estate market, taxation, and lifestyle in Montenegro.

Montenegro Residence Permits

If you plan to stay in Montenegro for more than the maximum duration allowed by your passport (usually 30 or 90 days), you'll need a Montenegro Residence Permit, which allows a stay of up to 12 months. As Montenegro approaches EU membership, its central location, natural beauty, and business opportunitiesare drawing individuals looking for long-term residency.

Types of Residency Permits in Montenegro

Montenegro's residency program caters to a diverse group of applicants, including Digital Entrepreneurs, Business Owners, Traders, Outsourcers, and families looking to start a business in or relocate to Montenegro. The residency options in Montenegro can be classified into the following categories:

1. Montenegro Temporary Residence Permit

• Eligibility: Individuals seeking to stay in Montenegro for more extended periods than their passport allows, typically 30 or 90 days.
• Duration: This permit is valid for up to one year, with the possibility of annual renewals.
• Path to Permanent Residency: Renewing this permit annually for five years can lead to permanent residency.

2. Montenegro Temporary Residence & Work Permit

• Eligibility: Available to those who either establish a company in Montenegro or are employed by a company in the country.
• Duration: Like the Temporary Residence Permit, this is renewable on an annual basis and can lead to permanent residency after five years.
• Advantages: This permit allows both residence and work rights.

3. Montenegro Permanent Residence Permit

• Eligibility: After five years of uninterrupted Temporary Residence, individuals can apply for Permanent Residence.
• Duration: Permanent Residence Permits last for five years and are renewable.

Application Process for Temporary Residence

You can apply for temporary residency in Montenegro for various reasons, but two popular options are temporary residency by property ownership or work permit

Temporary Residence by Property Ownership

If you own residential property in Montenegro, you are eligible to apply for a Montenegro Temporary Residence Permit. Here's how to do it:

Requirements:

• Title document of the real estate (original copy, less than seven days old).
• Certificate of No Criminal Record from your home country (less than six months old and apostilled, depending on the country).
• Proof of financial ability: a minimum of 3650 Euros held in a Montenegrin bank account (Bank Certificate).
• Proof of local health insurance.
• Birth Certificate for children under 18 (apostilled, depending on the country).
• Marriage Certificate for married spouses (apostilled, depending on the country).
• Passport valid for at least three months after the permit's expiry (at least 15 months for a 12-month permit).

Application Process:

• Ensure your property is legally registered.
• Provide a clean criminal record background check certificate from your home country.
• Maintain a Montenegrin bank account with a specified minimum balance.
• Secure local health insurance.
• Ensure that all documents not in Montenegrin or Serbian language are translated by a court-certified translator.

Temporary Residence by Company Formation

Foreign citizens can establish an LLC (Limited Liability Company) in Montenegro to operate their business. Here's how to apply for Temporary Residence through company formation:

Requirements:

• Signed and notarized special power of attorney (SPA).
• Valid passport.
• Company name.
• Certificate of no criminal record with apostille (less than six months old).
• Education diploma and transcript of grades (minimum high school level).
• Proof of accommodation in Montenegro: a 12-month accommodation rental contract.

Application Process:

• Sign a Power of Attorney to establish the company with a notary (Personal attendance required for the executive director).
• Incorporate the company (7 to 15 days).
• Find and rent an apartment for at least 12 months.
• Apply for the Executive Director Work Permit (Personal attendance required for the executive director).
• Collect the Executive Director Work Permit (approximately 15 days later).
• Submit family permit applications.
• Open company and personal bank accounts (Personal attendance required for the executive director).
• Set up accounting for the company.
• When family permits are ready, the spouse can also open a personal bank account by showing their permit at the bank (Personal attendance required for any bank account applicants).

Applying for Permanent Residence in Montenegro

To be eligible for permanent residency in Montenegro, you must meet the following criteria:

• Have maintained five years of uninterrupted Temporary Residence.
• Pass a Montenegrin language test.
• Provide a criminal record background check with no serious criminal history, unspent convictions, or outstanding warrants.

Obtaining Citizenship in Montenegro

Montenegro offers two primary pathways for obtaining citizenship:

• Citizenship by Investment Program: This program was valid until the end of 2022, and its renewal is uncertain.
• Residency-Based Citizenship: Obtain Temporary Residence for 5 years, followed by 5 years of Permanent Residence, making you eligible for Montenegrin citizenship.

Tax Residency Rules in Montenegro

Montenegro offers a tax-friendly environment, making it an attractive destination for tax optimization. Depending on your home country's tax treaties with Montenegro, you may have the opportunity to relocate your tax residency to Montenegro while achieving non-resident status in your home country.

Income Taxes in Montenegro

• Personal income tax is levied at a rate of 9% for income up to EUR 700 gross, and 15% for higher income.
• Corporate income tax rates range from 9% to 15% depending on the level of profit.

Double Taxation Treaties with Montenegro

Montenegro has established double taxation treaties with numerous countries. At the time of writing, these countries include Albania, Austria, Azerbaijan, Belarus, Belgium, and many others. These treaties can be highly beneficial for individuals seeking to manage their tax liabilities efficiently.

In conclusion, Montenegro offers an attractive opportunity for individuals and families seeking a second residence. Whether for retirement, property ownership, or business purposes, Montenegro provides a cost-effective alternative to neighboring European countries. 

By understanding the various residency options, taxation policies, and lifestyle in Montenegro, you can make an informed decision about embarking on your Montenegrin journey.

FAQ

1. Who is eligible for Montenegro's Temporary Residence Permit?

Montenegro's Temporary Residence Permit is available to individuals who wish to stay in the country for more extended periods than their passport allows, typically 30 or 90 days. It is often sought by those who plan to live, work, or invest in Montenegro.

2. How long does a Temporary Residence Permit in Montenegro last?

A Montenegro Temporary Residence Permit is valid for up to one year. It can be renewed annually, and after five years of renewals, it can lead to permanent residency.

3. What is the process for obtaining Temporary Residence by Property Ownership?

To apply for Temporary Residence by property ownership, you need to own residential property in Montenegro, ensure it is legally registered, and provide documents such as a clean criminal record certificate, proof of financial ability, and health insurance. The permit can be limited to spending no more than 90 days outside Montenegro during the 12-month period.

4. Can I work in Montenegro with a Temporary Residence Permit?

A Montenegro Temporary Residence Permit does not automatically entitle you to work in Montenegro. If you want to work, you should explore the Temporary Residence & Work Permit option, which is granted through company formation or employment by a Montenegrin company.

5. What is the Montenegro Permanent Residence Permit, and how can I obtain it?

The Montenegro Permanent Residence Permit is granted after having five years of uninterrupted Temporary Residence in the country. You must also pass a Montenegrin language test and provide a clean criminal record background check.

6. Is Montenegro an attractive option for tax optimization?

Montenegro offers an attractive tax environment with relatively low personal and corporate income tax rates. Depending on your home country's tax treaties with Montenegro, you may be able to relocate your tax residency to Montenegro while achieving non-resident status for tax purposes in your home country.

7. Can I become a Montenegrin citizen through residency?

Yes, you can become a Montenegrin citizen through a combination of residency permits. By first obtaining Temporary Residence for five years, followed by five years of Permanent Residence, you become eligible for Montenegrin citizenship.

8. Which countries have Double Taxation Treaties with Montenegro?

Montenegro has established Double Taxation Treaties with numerous countries. Some of these countries include Albania, Austria, Azerbaijan, Belarus, Belgium, China, Croatia, Cyprus, Denmark, France, Germany, India, Italy, the United Kingdom, and many others. These treaties can be beneficial for managing your tax obligations efficiently.

9. What is the expected processing time for obtaining residency in Montenegro?

The processing time for obtaining residency permits in Montenegro can vary. For example, the LLC setup, which is often the initial step in the process, can take several weeks. The overall duration to obtain residence permits, including all required steps, can range from 6 to 8 weeks for a family, assuming no significant delays in processing.

10. Is it possible to obtain health insurance in Montenegro as a resident?

While the Montenegro Temporary Residence Permit by property ownership does not provide access to the national healthcare system, some residents may be eligible for local health insurance, which can be subject to charges. Residents under other permit categories may have access to the national healthcare system.