Transcript Bussines Regulation - Ministarstvo finansija

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
Unemployement rate
9.2%
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
80
Bosnia and
Herzegovina
Serbia
70
Albania
60
Macedonia
Number of days to register a company
50
40
30
Croatia
Romania
Moldova
Bulgaria
20
Montenegro
10
0
0
2
4
6
8
10
12
14
Number of procedures to register a limited liability company
16
18
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 FDI
After slow down in 2003 the FDIs
increase in 2004 and especialy in
2005
250
200
Goal for 2005 achieved in the I
quarter with succesful privatisation 150
of Telecom
100
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
50
0
2002
2003
2004
FDI
2005p
2005 / 9
Privatisation and FDI (1)
FDI in 9/2005 - economy areas
16.50
4.40
27.60
183.90
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
400
Deposits increase 350
Decrease of interest300
250
rate
200
Concentration
150
Privatization
100
50
0
2001
2002
2003
depoziti
2004
Jul-05
Capital market
Over 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
MOSTE
NEX 20 and NEX PIF
03 03 03 3 3 0 4 04 04 04 4 4 0 5 05 05 05
ra - y- ul- p -0 v-0 n- ar- y- ul- p -0 v-0 n- ar- y- ula J
a J
a J
o Ja M
o Ja M
M M
Se N
M
Se N
M
"NEX 20"
"NEX P IF"
320
290
260
230
200
170
140
110
80
50
Ma
r-0
Ma 3
y -0
3
Ju
l-0
3
Se
p -0
3
No
v -0
3
Ja
n-0
Ma 4
r-0
Ma 4
y -0
4
Ju
l-0
4
Se
p -0
4
No
v -0
4
Ja
n-0
Ma 5
r-0
Ma 5
y -0
5
Ju
l-0
5
5300
4900
4500
4100
3700
3300
2900
2500
2100
1700
1300
900
Growing sectors
-TelecommunicationTotal revenue was
increased for 90% in
period 2001 - 2004
Total 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)
Number of telecommunication users
500
400
300
200
100
0
2001
Fixed telephony users
2002
2003
2004
mobile telephony users
internet user
Growing sectors
-TourismFor 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 equally
2.We are champions in business registration procedures: you can register
a Limited Liability Company for 1 euro, within 4 working days and by
submitting 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 Montenegro
81000 Podgorica, 2 Stanka Dragojevića Street
tel: +381 81 242 835; fax: +381 81 224 450; e-mail: [email protected]
www.ministarstvo-finansija.vlada.cg.yu