COVID-19 Montenegro Update

Subsidies for Closed and Endangered Industries in Montenegro

This article will cover subsidies for closed and endangered industries under the so-called Economy and Employee Support Program presented by the Government of . More information about the Program and its novelties can be found here.

Subsidies for Closed Industries (100% of gross minimum salary)

This measure regulates the granting of a subsidy to a business entity (companies and entrepreneurs) whose work is prohibited by orders of the Ministry of Health. A business entity may receive a subsidy upon request for employees’ salaries for the months of April and May 2020.

Companies and entrepreneurs operating in closed industries are entitled to a subsidy of up to 100% of the amount of taxes and contributions to the minimum salary and 100% of the net minimum salary for employees of the business entity registered in February 2020, unless the amount is below the minimum salary (part-time employees), in which case the net amount, taxes and contributions are paid in proportion to the acquired salary.

The list of primary activities to which this measure relates is in Attachment 1 of the Program. For example, Attachment 1 lists the following activities: certain wholesale and retail trades, transport of passengers including land, water, and air transport, bars and restaurants, dental practice, artistic creation, sports, and recreational activities, etc.

The initial version of the Program was amended, thus, a particular set of categories that operate in the largest number within bookstores, children’s playrooms, optical shops, bust stations, etc. were added.

The measure does not apply to state institutions, local self-government, and majority-owned state or local government.

Subsidies for the Tourism Sector (100% of gross minimum salary)

The subsidy is given to entrepreneurs and entities in the field of tourism, whose work is not prohibited, but their scope of activities has been significantly reduced because of the orders from the Ministry of Health. Those business entities may receive, upon request, a subsidy for employee salaries for the months of April and May 2020.

Companies and entrepreneurs operating in the tourism sector are entitled to a subsidy of up to 100% of the amount of taxes and contributions to the minimum salary and 100% of the net minimum salary for employees of the business entity registered in February 2020, unless the amount is below the minimum salary (part-time employees), in which case the net amount, taxes and contributions are paid in proportion to the acquired salary.

The subsidy applies to business entities with activities such as hotels and similar accommodations; resorts and similar short-stay accommodation; the activity of campsites, auto-camps, and campsites for tourist trailers; activity of travel agencies; activity of tourist operators; other reservation services and related activities; hotels and motels, with restaurants.

All other representatives of the tourism industry will be treated through the measure of endangered activities.

Subsidies for Endangered Industries (50% of gross minimum salary)

The subsidy is given to entrepreneurs and entities in activities whose work is not prohibited, but their scope of activities has been significantly reduced because of the orders from the Ministry of Health. Those business entities may receive, upon request, a subsidy for employee salaries for the months of April and May 2020.

Companies and entrepreneurs operating in threatened sectors are entitled to a subsidy of 50% of the amount of taxes and contributions to the minimum salary and 50% of the net minimum salary for employees of the company registered in February 2020, unless the amount is below the minimum salary (part-time employees) in which case the net amount, taxes and contributions are paid in proportion to the acquired salary.

* These companies and entrepreneurs can also use the right to a subsidy of 70% of taxes and contributions to the minimum salary and 70% of the net minimum salary for employees who have used the right to paid absence from work due to the care of a child not older than 11 years or have been quarantined or isolated, under the order of the Ministry of Health. Overall, a business entity may apply for the same person only under one proposed measure for one month.

Also, a business entity may receive a subsidy if it does not reduce the number of employees over the duration of the measure, with respect to the number of employees registered in the month of February 2020.

The subsidy does not apply to state institutions, local government, and majority-owned companies of the state or local self-government, as well as companies with codes of primary activities listed in Attachment 3 of the Program.

The Course of Proceedings

The Program applications will be open for April salary subsidies from 1 May to 15 May 2020. Requests will be processed in the order of their arrival. The expected time of payment of salary to the employee’s account, in case of submission of a complete request that meets all the criteria prescribed by the program, is two to four days.

The application will be accessible on the portal e-Prijava which is regularly used by business entities for filing electronic tax documents.

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.