Company location Montenegro
In recent years, Montenegro has established itself as an up-and-coming center for entrepreneurs and investors looking for attractive conditions for their business activities. Thanks to its favorable tax environment, low wage costs, affordable social security contributions and health insurance as well as low rental costs for commercial real estate, Montenegro offers many advantages over other European countries, especially Germany. In this article, we highlight the most important reasons why Montenegro is an advantageous location for companies.
Tax advantages compared to Germany
The low tax rates are a decisive factor in Montenegro’s attractiveness as a business location. These play an important role in the decision of many companies to relocate their business activities to Montenegro.
Tax rates in comparison
| Tax type | Montenegro | Germany |
|---|---|---|
| Corporate income tax | 9% corporation tax | 15-30% corporation tax + trade tax (7-17% depending on municipality) |
| Value added tax (VAT) | 21% standard, 7% reduced | 19% standard, 7% reduced |
| Income tax | 9% – 11% | 14% – 45% |
The corporate income tax in Montenegro is only 9%. This is significantly lower than in Germany, where corporation tax alone can be up to 30%. In Germany, there is also the trade tax, which varies between 7% and 17% depending on the municipality. These differences in the tax burden mean that companies in Montenegro can achieve significant tax savings.
Montenegro also levies a uniform income tax of 9% to 11%, which is considerably lower than the progressive tax rates in Germany (14% to 45%). This makes Montenegro particularly attractive for high-earning individuals and entrepreneurs who want to reduce their income tax burden.
Value added tax (VAT) in Montenegro is 21% for the standard rate and 7% for reduced goods and services. Although the standard tax rate is slightly higher than in Germany (19%), this is compensated for by the overall lower tax rates in other areas.
Favorable wage costs and social security contributions
In addition to the tax advantages, Montenegro also offers low labor costs and social security contributions, which makes the location particularly attractive for labor-intensive companies.
Labor costs in comparison
| Position | Montenegro (monthly) | Germany (monthly) |
|---|---|---|
| Office worker | 500 EUR | 2.500 EUR |
| Engineer | 1.200 EUR | 4.500 EUR |
| IT specialist | 1,500 EUR | 5.000 EUR |
Labor costs in Montenegro are extremely competitive by European standards. The average monthly wage is well below the European average and is very low, especially compared to Germany. This enables companies to significantly reduce their personnel costs and thus increase their competitiveness.
Social security contributions in comparison
| Position | Montenegro (monthly) | Germany (monthly) |
|---|---|---|
| Office worker | 165 EUR | 1.000 EUR |
| Engineer | 396 EUR | 1.800 EUR |
| IT Specialist | 495 EUR | 2.000 EUR |
Social security contributions in Montenegro are also relatively low. Employers and employees share the social security contributions, which amount to around 33% of the gross salary. By way of comparison: in Germany, social security contributions are around 40% of gross wages, with employer and employee contributions each amounting to around 20%. This means that companies in Montenegro not only benefit from lower labor costs, but also from lower social security contributions.
Affordable health insurance
The cost of health insurance in Montenegro is very low compared to many other European countries, including Germany. This is another benefit that is important for both companies and their employees.
Health insurance premiums in comparison
| Position | Montenegro (monthly) | Germany (monthly) |
|---|---|---|
| Office worker | 50 EUR | 400 EUR |
| Engineer | 120 EUR | 720 EUR |
| IT Specialist | 150 EUR | 800 EUR |
In Montenegro, health insurance is financed by social security contributions, which make up part of the 33% social security contributions mentioned above. Healthcare in Montenegro is cost-effective and efficient, which reduces the overall cost of healthcare for companies and their employees. In Germany, on the other hand, contributions to statutory health insurance are higher and can represent a considerable financial burden for employees and employers.
Favorable rental costs for commercial properties
Another significant advantage of Montenegro as a business location is the low rental costs for commercial real estate. These costs play a significant role in a company’s total cost of ownership.
Rental costs in comparison
| Location | Montenegro (per m²) | Germany (per m²) |
|---|---|---|
| Office space | 10-15 EUR | 20-40 EUR |
| Industrial space | 5-10 EUR | 15-25 EUR |
| Retail space | 15-25 EUR | 30-50 EUR |
Rental prices for commercial real estate in Montenegro are very low compared to Western European countries, especially Germany. This applies to office space in urban areas as well as to industrial and commercial real estate. In cities such as Podgorica, the capital of Montenegro, rents for first-class office space are significantly lower than in comparable cities in Germany. This offers companies the opportunity to rent high-quality real estate without having to bear high costs.
Availability of commercial real estate
Montenegro offers good availability of modern commercial real estate. In recent years, a great deal has been invested in the development of office buildings and industrial parks to meet the needs of international companies. This has led to a wide range of available properties that meet the different requirements of companies.
Further advantages of the company location in Montenegro
In addition to the advantages already mentioned, there are other aspects that make Montenegro an attractive location for companies:
Strategic location
Montenegro is strategically located on the Adriatic Sea and offers access to the markets of the European Union as well as the markets of the Western Balkans. This makes Montenegro an ideal location for companies looking to expand in these regions.
Investment incentives
The Montenegrin government has introduced a number of investment incentives to promote foreign direct investment. These include tax exemptions for certain investments, subsidies and simplified procedures for setting up companies. These incentives are helping to make Montenegro even more attractive to foreign investors.
High quality of life
Montenegro offers a high quality of life with breathtaking scenery, a pleasant climate and a rich culture. The cost of living is low compared to many other European countries, which is an advantage for both companies and their employees.
Infrastructure development
The infrastructure in Montenegro has improved significantly in recent years. Significant investments were made in the expansion of roads, airports and ports in order to improve access to international markets. There is also a good Internet connection and modern telecommunications services, which are essential for the operation of modern companies.
Summary
Montenegro as a business location offers a number of advantages. The country’s low tax rates, favorable labor costs and social security contributions, affordable health insurance and rental costs for commercial real estate make it an attractive alternative to the higher costs and complex bureaucracy in Germany.
Montenegro also offers a strategic location, investment incentives, a high quality of life and improved infrastructure, which make the location even more attractive. Montenegro is a worthwhile option for entrepreneurs and investors who want to reduce their operating costs and increase their competitiveness.
