Doing Business in Montenegro Mr Milorad Katnic Deputy Minister of Ministry of Finance.
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Transcript of Doing Business in Montenegro Mr Milorad Katnic Deputy Minister of Ministry of Finance.
Doing Business in Montenegro
Mr Milorad Katnic
Deputy Minister of Ministry of Finance
Basic Economic Facts
2004 2005
GDP real growth 2.7% 4.1%
Budgetary deficit 2.1% 1,6%
Inflation rate 4.3% 3.5%
External public debt 32.7% 30.6%
Total public debt 44.8% 40.1%
Current account deficit 9.2%
Unemployement rate 22.6% 21,6%
Economic Reforms- Basic elements of concept -
Openness
Accepting a credible currency (EURO)
Low level of business regulation
Low level of taxation
According to OECD, Montenegro is champion in the region for business registration
Romania
Macedonia
Montenegro
Albania
Moldova
Croatia
Bosnia and
HerzegovinaSerbia
0
10
20
30
40
50
60
70
80
0 2 4 6 8 10 12 14 16 18
Number of procedures to register a limited liability company
Number of days to register a company
Bulgaria
Bussines Regulation
Business entry: – Requared amount of capital for Limited Liability
Company is 1 € – Procedure reacquires three documents and it
takes four working days
Business exit:
– Law on Bankruptcy: maximal length of liquidation process – 8 months
Bussines Regulation
National treatment of foreign investors
Free movement of capital is introduced with the new Law on Capital transactions
Free profit repatriation
EURO is legal currency
99% of prices are freely determined
Government tries to identify and eliminate various business barriers
Tax Regulation Value Added Tax – Flat rate 17%
Personal Income Tax – progressive rate 15-22%
Corporate Income Tax – 9%
Average tariff rate approximately 6%
Challenges are further simplification of the tax system, continual reduction of the government expenditures and tax burden and compliance with eurozone Mastrichts criterion
Privatisation and FDIAfter slow down in 2003 the FDIs increase in 2004 and especialy in 2005
Goal for 2005 achieved in the I quarter with succesful privatisation of Telecom
In first nine months FDI reached 231.8 mln euro
Further privatizations in 2005: KAP, Podgoricka Bank, Shipyard, part of the energy sector, hotels and military property
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50
100
150
200
250
2002 2003 2004 2005p 2005 / 9
FDI
Privatisation and FDI (1)FDI in 9/2005 - economy areas
4.40
183.90
27.6016.50
Production Services Financial organizations Real estate
Privatisation and FDI (2)
• Telecommunication – 100% private ownership;• Banking – 90% private ownership;• Capital market – 100% private ownership;• Services – 100% private ownership;• Gasoline import and distribution – dominante private
ownership;• Tourism – mostly private ownership
(just a few hotels remain in majority ownership of the state);
• Industry – mostly private ownership;
Banking Sector – Positive trends
Deposits increaseDecrease of interest rateConcentrationPrivatization
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50
100
150
200
250
300
350
400
2001 2002 2003 2004 Jul-05
depoziti
Capital marketOver 151000 transactions have been made in period 2001 – 2005 with turnover of 226.4 mln €
About 110 mln € of foreign capital is invested in Montenegro by buying securities
General capitalization is 560 mln € in September 2005. which is 34%GDP
2001 10,8 € mln €
2002 14,3 € mln €
2003 43,5 € mln €
2004 42, 8 € mln €
Sep-05 114,8 mln €
TOTAL 226,4 mln €
Stock Exchange Indexes NEX 20 and NEX PIF
90013001700210025002900330037004100450049005300
"NEX 20" "NEX PIF"
MOSTE
50
80
110
140170
200
230
260
290
320
Growing sectors-Telecommunication-
Total revenue was increased for 90% in period 2001 - 2004Total revenue in 2004 reached 11% of GDP (record in the region)1.1 mobile phone per capita (8/2005)60.43 SMS per capita (8/2005)
0
100
200
300
400
500
2001 2002 2003 2004
Number of telecommunication users
Fixed telephony users mobile telephony users internet users
Growing sectors-Tourism-
For the first eight months on 2005 Montenegro has been visited by 666.018 tourists which is 16.83% higher than in same period 2004
Total tourism revenues in the first eight months of 2005 were 21.8% higher than in same period 2004
According to the WTO latest research Montenegro is world’s fastest growing travel and tourism economy in the world
Do you need a good reason to invest in Montenegro?
1.We treat foreigners and nationals equally2.We are champions in business registration procedures: you can registera Limited Liability Company for 1 euro, within 4 working days and bysubmitting three documents.3.The Euro is our national currency.4.There are no restrictions on ability to remit profit, dividend or interest.5.We do have the lowest corporate tax rate in Europe – 9%%.6.Value added tax is one of the lowest in Europe – 17%%.at rate.7.Personal income tax is progressive with rates between 15.5 and 22.5%.8.Montenegro has access to the Adriatic Sea.9.Montenegro has over 180 sunny days per year.10.Visas are not required for Montenegro.
Welcome to Montenegro and have a
good business!
Ministry of Finance of the Republic of Montenegro81000 Podgorica, 2 Stanka Dragojevića Street
tel: +381 81 242 835; fax: +381 81 224 450; e-mail: [email protected]