Incentive Measures for Innovative Activities in Montenegro: Rights, Obligations and Conditions

Innovation is the key to developing a modern economy, and Montenegro offers a wide range of incentive measures to encourage innovative activities. If you are a legal entity or individual with a vision and are ready to contribute to the market through innovative projects, here is what you need to know.

WHO CAN BE SUBJECTS OF INNOVATIVE ACTIVITIES?

• Domestic and foreign legal entities or individual
• Subjects performing innovation activities – organizations developing innovative products, services, and processes
• Innovation infrastructure entities – those providing support for innovation, such as incubators and accelerators (organizations that support innovative activities)
• Subjects investing in innovative activities – investors financing innovative projects
• Other innovation subjects – all other organizations connected with innovation

TYPES OF INNOVATION

Innovation can take different forms, including:

• Product and service innovations – new or improved market offerings
• Business process innovations – improving the way organizations function.
• Technological and non-technological innovations – involving new technologies or new organizational and methodological approaches
• Innovations in different sectors –private sector, public sector, and social innovations

CONDITIONS FOR ACCESSING INCENTIVE MEASURES

To qualify for incentive measures, entities engaged in innovative activities must meet certain conditions.

For legal entities:

• Registration in the CRPS (Central Register of Business Entities)
• An innovative program or project worth at least 25,000€, offering novelty in the domestic or international market
• Settled tax obligations
• No initiated bankruptcy or liquidation proceedings
• Must not be the founder or co-founder of a scientific research institution or an innovation entity, nor related to those who have already received incentive measures under this law

For individuals:

• Registration in the CRPS (Central Register of Business Entities)
• Settled tax obligations
• Must not be the founder or co-founder of a scientific research institution or an innovation entity, nor related to those who have already received incentive measures

INCENTIVE MEASURES AVAILABLE TO BENEFICIARIES

Entities meeting the conditions can take advantage of the following benefits:

• Tax incentives – reduction or exemption from income tax, profit tax, and contributions
• Fee reductions – more favorable conditions for utility fees, property tax, and use of state-owned land

THE TOTAL AMOUNT OF ALL REDUCTIONS CANNOT EXCEED 300 000€ OVER A THREE-YEAR PERIOD

• Support for reinvesting profits – exemption from profit tax for reinvestment in innovative projects

ACTIVITIES NOT COVERED BY INCENTIVES

Incentive measures do not apply to:

• The production and sale of weapons and military equipment
• Activities that are illegal or harmful to the environment and human health
• Political parties
• The production and trade of excise goods

HOW TO BECOME AN INCENTIVE MEASURE BENEFICIARY?

To apply to the Ministry, it is necessary to:

1. Collect evidence proving compliance with all conditions
2. Have the Ministry review the application and documents
3. Obtain approval from the Commission assessing compliance with all conditions
4. Innovation entities must be registered in the innovation activity register, with specific conditions for registration
5. If approved, the beneficiary status is granted for a period od up to 3 years

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