Montenegro is preparing to establish a formal legal framework for social enterprises, with Parliament expected to consider the proposed Law on Social Economy during its autumn session. The legislation would introduce a dedicated register of social-economy entities, establish a specialised council and require reporting on social impact. The framework would cover groups including people with disabilities, long-term unemployed people, young people without work experience and women in rural areas.
Wider Business Applications
Formal recognition would establish social enterprises as a defined category of businesses able to provide services to municipalities, companies and other institutions seeking activities with measurable social outcomes. Potential areas of activity include care services, recycling, rural production, training, local food, maintenance and employment-integration programmes.
Demand for Professional Services
The new framework could also expand demand for professional services supporting social enterprises. These businesses would require legal structuring, accounting, grant preparation, impact measurement, ESG reporting and financing advice as they seek to develop sustainable business models beyond project-based funding. Larger companies could provide another source of demand, particularly those facing ESG and supply-chain reporting requirements and seeking suppliers that can combine commercial services with measurable social impact. This could lead to partnerships between conventional companies and registered social enterprises.
Financing Remains a Key Issue
Access to finance is expected to remain a key issue. Formal legal recognition alone would not necessarily make social enterprises bankable, leaving many businesses dependent on blended finance, guarantees, grants or patient capital to expand. A formal framework could nevertheless give lenders, investors and public institutions a clearer basis for identifying qualifying organisations and assessing their social impact.
The proposed law would create a new business category in Montenegro, while its practical development would depend on social enterprises being able to secure contracts, employ people and generate sufficient revenue to operate without permanent subsidies.
