How to Start a Nonprofit in Montenegro

Starting a foundation or nonprofit organization is a magnificent way for idealists, daydreamers, and visionaries having the passion and motivation to bring people in their community together, to make a real difference. Unlike forprofits, NGOs are established to foster charitable, scientific, educational, or religious causes for the public good. Nonprofits are tax-excempt in Montenegro under the national revenue code.

Even though foundations and nonprofit organizations ressemble corporate entities in their legal structure, a big difference is that they are not allowed to distribute profits from their commercial operations to their shareholders. Nonprofits in large parts finance themselves through grants and public, individual, or corporate donations.

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The Process of starting a NGO

Montenegro’s Law on Nonprofit Organizations differentiates between foundations, which can be established by just one person, and nonprofit organizations that require at least three founders, including one Montenegrin resident. Founding a nonprofit can be be protracted process, depending on how fast you can form a board of directors, incorporate it, and file for tax-excempt status. Here are the steps in the process:

draft and sign the Memorandum of Association, the Articles of Association, and the Records of the Inaugural Meeting
notarize the Memorandum of Association
fill out the registration form and file it together with the documents mentioned above with the Ministry of Public Administration
make a stamp
register with Montenegro’s Statistical Office (Monstat)
obtain a tax identification number (PIB) from the tax office
register with Montenegro’s Company Register (in case the NGO plans to engage in any sort of commercial activity)
open a bank account

Can Your Nonprofit Make Money?

While nonprofits are technically allowed to make a profit, they are not permitted to pay them out as dividends to their shareholders. Instead, they must reinvest all profits back into the administration of the NGO to further its cause and cover its expenses like office rent, software, and marketing costs.

When it comes to salaries, employees including founders are paid the same way as employees in a regular company. However, the compensation mustn’t be tied to the profit the NGO generates and be ‘reasonable’, as determinted by the national pay scale and the amount usually paid by enterprises for similar services.

Nonprofit Funding Sources

Most nonprofits finance their operations through a diversified mix of revenue streams, including the following ones:

fundraising events (auctions, charity galas, sports tournaments, etc)
private and corporate contributions/sponsorships
government grants
monthly/yearly membership fees
sale of merchandise

Are you ready to start your Nonprofit?

We can help you get started for just 799€ + state fees