Montenegro is set to undergo significant changes in corporate governance with the introduction of new company laws, effective from 1 January 2026. These reforms aim to establish a more formalized business environment, moving away from the previously prevalent informal structures and founder-centric decision-making processes.
The Law on the Registration of Business and Other Entities, adopted in 2025, will create a Central Register of Business and Other Entities. This electronic database is designed to enhance transparency and align with European Union regulations regarding company law and digital processes. The European Commission has acknowledged these legislative advancements, which were enacted in July 2025, emphasizing their role in improving legal certainty and the overall business climate.
The new Law on Business Companies introduces comprehensive changes, including stricter requirements for corporate governance, electronic incorporation processes, and mandates for shareholder identification. It also addresses gender representation within management teams. Key transitional deadlines have been established: companies must align their operations by 31 March 2026, ensure gender representation in public joint-stock companies by 30 June 2026, and standardize certain joint-stock-company shares by 31 December 2026.
A notable aspect of these reforms is the formal recognition of shareholder agreements as binding instruments among shareholders, although they will not be registered. This change is particularly relevant for joint ventures, family-owned businesses, start-ups, and firms backed by investors.
For directors and controlling individuals, the reforms expand fiduciary duties to include de facto directors and those whose instructions are regularly followed by formal directors. Additionally, the concept of corporate veil piercing has been broadened to address potential abuses of legal personality.
These developments signal Montenegro’s shift toward a governance framework that emphasizes accountability and substance over mere registration. Companies are advised to review their articles of association, internal approval processes, director appointments, shareholder agreements, registered addresses, document service procedures, and management authority records in light of these changes.
Foreign investors are also encouraged to update their due diligence protocols, especially concerning companies involved in real estate transactions or joint ventures. While these reforms may initially present challenges for businesses accustomed to informal practices, they align Montenegro more closely with European standards rather than creating an overly regulated environment.
