Montenegro is set to implement significant corporate governance reforms with the new companies act, effective from 1 January 2026. This legislation marks a pivotal change in the way businesses operate, transitioning from informal structures and decision-making processes to a framework that emphasizes formal governance and accountability, aligning more closely with European Union standards.
The Law on the Registration of Business and Other Entities, adopted in 2025, establishes a Central Register of Business and Other Entities as a publicly accessible electronic database. This law incorporates EU directives concerning company law and the use of digital tools in business operations.
In July 2025, the European Commission acknowledged Montenegro’s adoption of both the Law on Companies and the Law on Registration of Business and Other Entities. These reforms aim to enhance legal certainty and improve the overall business environment through electronic registration.
The upcoming Law on Business Companies introduces more stringent requirements for corporate governance, including electronic incorporation processes, mandatory shareholder identification, and enhanced gender representation within management structures. Key transitional deadlines have been set for companies to align their operations by 31 March 2026, ensure gender representation in public joint-stock companies by 30 June 2026, and standardize certain shares by 31 December 2026.
A notable change for company owners is the formal recognition of shareholder agreements as binding documents that govern rights and obligations among shareholders, particularly beneficial for joint ventures, family businesses, startups, and investor-backed entities.
Directors and controlling individuals will face an altered risk profile as fiduciary duties now extend to de facto directors and those whose directives are regularly followed by official directors. The concept of piercing the corporate veil has also been expanded to address potential misuse of legal personality.
This reform signals a departure from a company-law culture focused primarily on registration towards one that prioritizes governance, accountability, and substantive compliance.
Companies are advised to reassess their articles of association, internal approval processes, director appointments, shareholder agreements, registered addresses, document service protocols, and management authority records. Foreign investors should also revise their due diligence procedures, especially concerning entities involved in real estate or joint ventures.
While these reforms may appear to introduce more regulation, they aim to align Montenegro’s practices with typical European norms. For businesses accustomed to informal governance structures, this transition represents a significant adjustment.
