Sole trader (preduzetnik) in Montenegro 2026: €5 registration, 0, 9 and 15% tax, flat-rate tax up to €30,000, contributions and self-employment alongside a job

A sole trader (preduzetnik) registers in Montenegro with the Central Register of Business Entities (CRPS) at the Tax Administration, for a fee of €5. Income tax on primary self-employment is 0% up to €8,400 of taxable profit a year, 9% up to €12,000 and 15% above that, and a sole trader with turnover of up to €30,000 can apply for flat-rate taxation. Contributions are 10% for pension insurance and 1% for unemployment insurance, on a base of 60%, 100% or 150% of the average wage depending on turnover. Since 1 January 2026 employees can also be supplementary sole traders, taxed at 15%.

The rules come from the new Companies Law, applied since 1 January 2026, the Personal Income Tax Law as amended in 160/2025 and the Law on Compulsory Social Insurance Contributions. This guide explains the types of sole trader, registration, tax and the flat-rate option, contributions, VAT and liability for debts.

Primary or supplementary sole trader?

• The business name must contain the name and surname, the seat and the designation "preduzetnik" or "PR", and may also contain a trading name and the activity.
• A supplementary sole trader pays 15% tax on taxable profit and, like a primary one, makes monthly advance payments.

How do you register as a sole trader?

• Fill in the Single Registration Application and submit it to the CRPS with a copy of your identity card, or a certified copy of your passport if you are a foreigner; you can also apply online through the eFirma service.
• Pay the €5 fee to the Tax Administration and choose the code of your main activity when registering.
• Within 15 days of registration submit an information return with your estimated income to the tax authority, which sets your monthly tax advances.
• If you want flat-rate taxation, apply within five days of registration, or later by the end of January for that year.
• After registration you open a business bank account, because tax and contributions are paid from it.

How much is the tax?

• Taxable profit is the difference between income and recognised expenses, including depreciation.
• Flat-rate taxation can be granted to a sole trader whose turnover in the previous or planned year does not exceed €30,000; the tax is paid monthly, as 1/12 of the amount in the Ministry of Finance tax scale.
• A flat-rate taxpayer keeps only books of turnover.

How much are contributions?

• A primary sole trader pays 10% for pension and disability insurance and 1% for unemployment insurance on that base, and may choose a higher base.
• Under flat-rate taxation the base is the taxable income set under the tax rules.
• Since 2026 a supplementary sole trader pays a 10% pension contribution on a base set by the same turnover scale.
• The health insurance contribution was abolished on 1 January 2022.

When does VAT apply and how is a sole trader liable for debts?

• VAT registration is mandatory once turnover in the last 12 months exceeds €30,000; the standard VAT rate is 21%.
• A sole trader answers for business obligations with all of their assets, and that liability does not end when they are removed from the CRPS.
• Anyone who wants limited liability sets up a limited liability company (DOO), and a sole trader can decide to continue the business as a company.
• Sole trader status ends with removal from the CRPS, at the trader's request or by operation of law, for example when their account has been blocked for more than two years.

How tax and contributions on an employee's salary are worked out is explained in our guide to income tax on salaries, opening an account in our guide to bank accounts, and advertising your services in our guide to free classifieds. How a tradesperson chooses a flat-rate group and issues invoices is explained by Glatko, and how freelancers combine the sole trader route with residence and VAT by RoNa Legal.

Frequently asked questions

How much does sole trader registration cost in Montenegro? The fee to the Tax Administration is €5, and the application is submitted to the CRPS in person or online through the eFirma service.

How much tax does a sole trader pay in Montenegro? A primary sole trader pays 0% on annual taxable profit up to €8,400, 9% up to €12,000 and 15% above that, and a supplementary sole trader pays 15%.

Who can pay flat-rate tax? A sole trader whose annual turnover does not exceed €30,000, on an application made within five days of registration or by the end of January.

Can I be a sole trader if I am employed? Yes, since 1 January 2026, as a supplementary sole trader, but then you cannot hire staff.

How much are contributions for a sole trader? A primary sole trader pays 11% on a base of 60%, 100% or 150% of the average wage, depending on annual turnover.

When does a sole trader enter the VAT system? When turnover in the last 12 months exceeds €30,000.

Sources

Types of sole trader, the business name and liability are set by the Companies Law (Official Gazette 90/2025, Articles 84 to 96, applied from 1 January 2026). Tax rates, flat-rate tax and the information return are set by the Personal Income Tax Law (Articles 10, 48 and 49), as amended by Official Gazette 160/2025. Contribution bases and rates come from the 94/2024 amendments to the Contributions Law and 160/2025, and the registration documents and fee are listed by the Government's Point of Single Contact. The information was checked on 26 September 2026. Fijaka is a classifieds platform; this article is not tax advice.