Law and regulation of industrial and logistics investment in Montenegro

There are no specific legal incentives for the Industrial&Logistics sector. However, it could be analysed on a case-by-case basis if a certain business falls in the scope of existing general legal incentives regulated by the current laws.

2. General incentives, from which investors in the I&L sector in CEE-17 can benefit, if no specific ones are available

Montenegro has regulated and declared business zones in eight local self-governments, and therefore investors have the opportunity to invest under favourable terms in Berane, Bijelo Polje, Kolašin, Mojkovac, Nikšić, Cetinje, Ulcinj and Podgorica. These local self-governments have defined business facilitations related to the payment of utility and other charges; bargain price for lease/purchase of premises in business zones; reduction of or an exemption from surtax on individual income; lower tax rates on real estate; the possibility to define a favourable model of public-private partnership; and improving areas that do not have a developed infrastructure.

In addition to tax exemptions and administrative facilitations, investors that choose to operate in a business zone will benefit from complete logistical support of their business operations to further facilitate.

3. Available tax exemptions or preferences for investors specifically in the I&L sector in CEE-17

There is currently no Industrial&Logistics specific corporate income tax and development tax relief, nor any Industrial&Logistics specific tax deductions.

However, regarding VAT and customs, the Montenegrin legal system provides for two concepts that allow VAT and customs exempt supplies under certain conditions: customs warehouses and free trade zones.

Customs warehouses - VAT and customs exemption is provided for the placement of goods in a customs warehouse. To benefit from these exemptions, the warehouse must be under the direct control of the Montenegrin customs authorities. The supply of goods from a customs warehouse is subject to general VAT and customs rules.

Free trade zones - The supply of goods and services to users of free trade zones is VAT exempt, as well as the supply of goods and services among users in the free trade zones.

4. General tax exemptions or preferences for investors in CEE-17 that would apply to the I&L sector

The Montenegrin corporate income tax law provides for an eight-year tax holiday for investors who operate in underdeveloped municipalities. The corporate income tax of such taxpayers can be reduced to zero, but the total tax relief for all eight years cannot exceed EUR 200,000 in total. In addition, taxpayers who pay corporate income tax timely are entitled to a reduction in the calculated corporate income tax of 6% of the tax due. The Montenegrin tax laws also provide that an employer which employs a worker for at least five years or for an indefinite period of time, is exempt from paying salary tax for four years.