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What Every Foreign National Needs to Know Before Being Appointed as Managing Director of a Montenegrin Company

What Every Foreign National Needs to Know Before Being Appointed as Managing Director of a Montenegrin Company

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When assisting our clients in the process of setting up a company in Montenegro, one of the first questions that come up is what the conditions are for a foreign national to be appointed as a managing director. In this article, we will provide a short overview of those conditions.

A managing director of a Montenegrin company must be employed with the company, based on a local employment contract. The employment contract of a foreign national must be tied to the length of the temporary residence and work permit (Permit), and obtaining the Permit is a condition for obtaining employment.

The main phases of the process for obtaining the Permit and establishing employment are the following: (1) applying for the Permit; (2) collecting the Permit; and (3) signing the employment contract and registering the employment status with the tax administration.

Before applying for the Permit, a foreign national must report their entry into Montenegro – within 24 hours. This can be done either through the hotel where they are staying, or they can report the fact themselves to the Tourist Bureau or the Ministry of the Interior.

After that, the following documents (original or certified copies) must be submitted by the foreign national, in person, to the Ministry of the Interior office in the reported municipality of residence in Montenegro: (1) written offer from the local company for their employment as managing director; (2) evidence of relevant qualifications (the recognition procedure for a foreign state diploma must be initiated at the Ministry of Education, Science, Culture and Sports); (3) evidence of an occupational health check by a certified Montenegrin health laboratory; (4) evidence of sufficient funds to cover the costs of living in Montenegro (e.g. either a salary that is higher than average or a statement by the company that it will cover their cost of living, etc.); (5) evidence of their accommodation in Montenegro (e.g. excerpt from the land registry proving ownership of real estate in Montenegro, lease contract for an apartment, etc.); (6) evidence of their health insurance coverage in Montenegro; (7) evidence that they have not been convicted of a criminal offence that is prosecuted ex officio and have not been unconditionally sentenced to imprisonment for longer than six months, or that the consequences of any past conviction no longer apply; (8) excerpt from the relevant Montenegrin registry proving that the company is duly incorporated and that they are registered as managing director; (9) copy of their passport; and (10) proof that the EUR 67 fee has been paid. In case the above-listed documents were issued by authorities abroad, their legalization by an apostille may also be necessary, depending on the country of origin, so this should be checked in advance.

If a certain document is missing or is deemed inadequate by the authorities, the foreign national must submit additional and/or adequate document(s), within ten days from the date of the initial filing. The Permit is issued within 15 days of submitting the complete application to the Ministry of the Interior, and the foreign national must collect it in person.

The employer is required to conclude the employment contract with the foreign national within 24 hours of the date the Permit is issued and to register the employment status with the tax administration. To receive a salary under the employment contract, the foreign national will need to open a bank account in Montenegro.

The Permit applies for one year and may be extended twice (each extension is on an annual term basis). A request to extend the Permit must be filed no later than 30 days before it expires. The same procedure applies to the extension as to the initial filing. However, the set of necessary documents differs slightly. Namely, all the above-listed documents must be submitted, except those under points (4), (5), (6), and (7).

Furthermore, when filing for an extension, one must submit a confirmation from the Montenegrin tax administration proving that all employment-related taxes have been duly paid. Once the conditions for the extension of the initial Permit no longer apply (i.e., three years after the first submission), a request for a new Permit must be submitted, so all the documents must be provided anew, including payment of another administrative fee.

By Dragana Bajic, Partner, CMS Belgrade and Tamara Samardzija, Attorney-at-law, CMS Podgorica

This Article was originally published in Issue 8.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

CMS at a Glance

CMS Sofia is a full-service law firm, the largest international law firm in Bulgaria and one of the largest providers of legal services in the local market as a whole. The breadth and depth of our practice means that our lawyers are specialised, with a level of specialisation that few of our competitors can match.

CMS Sofia is the Bulgarian branch of CMS, a top ten global legal and tax services provider with over 5000 lawyers in 43 countries and 78 offices across the world.

CMS entered the Bulgarian market as one of the first internationally active law firms in 2005 and is now among the most respected legal advisors in the country. We have 7 partners, 4 counsel and over 30 lawyers in our office in Sofia.

Our legal experts, who are rooted in Bulgaria’s local culture, can also draw on years of experience in foreign countries and are at home in several legal systems at once. We know the particularities of the local market just as well as the needs of our clients and combine both to achieve optimum solutions. Our lawyers are Bulgarian qualified and we also have English qualified experts – all of them regularly working on cross-border mandates.

In our work, we focus on M&A, Energy, Projects and Construction, Banking and Finance, Real Estate, Media, IP and IT law, Tax, Employment law, Competition, Procurement and any kind of Dispute resolution, including arbitration and mediation. What’s more, we also take care of the entire legal management of our clients’ projects.

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