Employer of Record (EOR) in Montenegro: Hire in Montenegro Without Opening a Local Entity

TL;DR: An Employer of Record (EOR) lets foreign companies hire employees in Montenegro fast and compliantly without opening a Montenegrin company. Legally, this sits on Montenegro’s regulated “agency for temporary assignment of employees” framework: the EOR is the local employer, assigns staff to your business, pays them, withholds taxes and social contributions, and keeps you compliant with labor, immigration, and payroll rules.
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What an EOR Does in Montenegro

  • Acts as the legal employer. The EOR signs local employment contracts, runs payroll, withholds taxes and social contributions, and keeps personnel files up to date.

  • Assigns your staff to work for you. The EOR (a licensed agency) employs the worker and officially assigns them to your company under a written agreement that defines responsibilities, pay, and working terms.

  • Manages immigration compliance. For non-citizen workers, the EOR can sponsor temporary residence and work permits, ensuring the employee can legally live and work in Montenegro.

    • When to Use an EOR

  • You want to hire quickly without forming a Montenegrin legal entity.

  • You’re testing or scaling operations with just a few local hires.

  • You need to employ foreign nationals in Montenegro.

  • You want to avoid misclassifying contractors who should legally be employees.

    • Legal Basis for EOR in Montenegro

    Montenegro’s Labour Law regulates “agencies for temporary assignment of employees.”

    • The agency (the EOR) is the official employer and assigns employees to another business (the “beneficiary”) under a written assignment agreement.

    • This agreement must define the number of assigned workers, job duties, assignment period, place of work, and pay calculation.

    • Assigned employees must receive equal pay and benefits to those in comparable roles at the beneficiary company.

    • Occupational health and safety (OHS) responsibilities generally fall on the beneficiary during the assignment.

    Only agencies registered and licensed by the Ministry of Labour can legally operate as EOR providers in Montenegro.

    Employment Conditions Covered by the EOR

    Employment Contracts

    • Must be in writing, outlining job role, salary, working hours, and duration.

    • Probation can last up to six months.

    • Fixed-term contracts can last a maximum of 36 months in total, after which the employment becomes permanent unless renewed under a lawful exception.

    Working Hours and Leave

    • Full-time work equals 40 hours per week.

    • Overtime is allowed but capped at an average of 48 hours per week, and up to 250 hours per year.

    • Employees are entitled to at least 20 working days of annual leave.

    Termination and Severance

    • Employment may end for business, performance, or conduct reasons, following notice and due process.

    • Employees with two or more years of service are entitled to at least one month’s salary as severance pay in redundancy cases.

    Payroll, Taxes, and Contributions

    Income Tax

    • Progressive rates apply to employment income:

      • Up to €700 – 0%

      • €701 to €1,000 – 9%

      • Above €1,000 – 15%
        The EOR withholds this tax at source.

    Social Contributions

    • Employee: 10% Pension & Disability (PIO) + 0.5% Unemployment

    • Employer: 0.5% Unemployment

    • The pension contribution is subject to an annual cap, adjusted each year.

    Some employers also contribute small additional levies such as the Labour Fund (0.2%) and Chamber of Commerce fee (0.27%).

    Minimum Wage

    Montenegro sets a national minimum wage that may vary by qualification level. The figure is periodically updated, so EORs ensure compliance with the latest threshold.

    Payroll Schedule

    • Payroll is processed monthly in euros.

    • Payslips, tax withholdings, and contribution filings are handled by the EOR.

    Public Holidays

    Official non-working days generally include:

    • January 1–2 (New Year’s)

    • January 7 (Orthodox Christmas)

    • May 1–2 (Labour Day)

    • May 21–22 (Independence Day)

    • July 13–14 (Statehood Day)

    Your EOR will align payroll and scheduling with national holidays each year.

    Immigration Compliance

    Foreign nationals working in Montenegro require a Temporary Residence and Work Permit, typically valid for one year and renewable.

    • The permit ties the individual to a specific employer and job position.

    • Changing employers or roles requires a new permit.

    • Decisions are generally issued within about 20 days after filing a complete application.

    Your EOR acts as both the employer and sponsor, handling paperwork, translations, and coordination with local authorities.

    How the EOR Process Works

  • Scoping and Quotation – Define the job role, salary, benefits, and start date.

  • Contracts and Assignment Agreement – The EOR signs an employment contract with the worker and an assignment agreement with your company.

  • Onboarding and Registration – The employee is registered for social insurance and receives proof of registration.

  • Monthly Payroll – The EOR calculates pay, withholds taxes and contributions, and issues payslips.

  • Ongoing Compliance – The EOR manages working-time records, leave, immigration renewals, and audits.

    • Alternatives to an EOR

  • Registering a d.o.o. (LLC) – Suitable for a larger or permanent presence, local invoicing, or when hiring a full internal team.

  • Hiring Independent Contractors – Works for short-term or project-based arrangements, but risky if the working relationship meets employment criteria.

    • EOR Compliance Checklist

  • Operates as a licensed temporary employment agency.

  • Ensures equal pay and equal treatment for assigned employees.

  • Uses legally compliant assignment agreements with each client.

  • Manages OHS obligations and worker protection measures.

  • Handles payroll, PIT, and social contributions correctly.

  • Provides immigration sponsorship and renewals for foreign hires.

    • FAQ
    Frequently asked questions
    We have put together some commonly asked questions.
    Is EOR legal in Montenegro?
    Yes. It’s regulated under the Labour Law through licensed agencies for temporary assignment of employees.
    Do EOR employees earn the same as direct hires?
    Yes. The law requires pay and working conditions equivalent to comparable employees in your company.
    Who handles workplace safety?
    Your company is responsible for on-site safety, while the EOR handles legal employment obligations.
    How quickly can hiring start?
    Local hires can start immediately after registration. For foreign hires, allow around 20 days for permit processing.
    What payroll costs apply?
    Standard contributions are 10% Pension & Disability + 0.5% Unemployment (employee), 0.5% Unemployment (employer), plus income tax according to the progressive rates.
    What’s the current minimum wage?
    The government sets a national minimum that is periodically adjusted. The EOR will confirm the latest amount when preparing the employment offer.
    Final Note

    Partnering with a qualified Employer of Record in Montenegro lets your company hire talent confidently, stay compliant with local laws, and focus on operations without administrative or legal risk.

    If you want help setting this up, Relocation Montenegro can act as your local EOR—handling contracts, payroll, permits, and full compliance so you can grow your team safely and efficiently.