Prevention of Illegal Business Operations

The Parliament of Montenegro has adopted the Law on Amendments and Supplements to the Law on Prevention of Illegal Business Operations

(“Official Gazette of Montenegro”, no. 127/25 of 31.10.2025), thereby further improving the regulatory framework aimed at compliance with market rules, suppressing the grey economy, and increasing transparency in the business environment. This law represents a continuation of reforms harmonized with modern standards of business supervision and financial discipline, and it applies to legal entities, entrepreneurs, and other business subjects performing registered activities in Montenegro.

The law changes certain existing provisions, but also introduces new, more precise definitions and restrictions, especially in the part related to regulating payment methods and the conditions for establishing or acquiring ownership shares in business entities. The goal of these amendments is to strengthen the control system and prevent abuses in situations where there are blocked accounts, tax debts, or ongoing bankruptcy and liquidation procedures.

Key Amendments

• In the definition of illegal business operations, the word “previously” has been removed, thereby emphasizing that any work without registration is illegal business – regardless of the phase or intention of business activity.
• A new Article 5a has been introduced, which for the first time allows certain transactions through payment institutions and electronic money institutions, but with strict limitations when accounts are blocked.
• Conditions for establishing business entities have been tightened, as well as for acquiring shares or stock by persons with significant interests in companies under bankruptcy or insolvent entities with tax debt.
• Article 8 has been amended, providing a more precise definition of subjects exempt from the provisions on cash register maximums and cash operations.
• Two new penalty provisions have been added, related to improper payments and technical non-compliance of payment institutions.

Focus of the Amendments — Article 5a

One of the most significant innovations is the possibility for legal entities and entrepreneurs to make payments through electronic money institutions, representing a step toward modern and digital financial flows. However, this option does not apply if the subject’s account is blocked, thereby preventing circumvention of enforced collection mechanisms, which was previously possible through alternative inflow and payment channels.

Payment institutions are obliged to ensure technical connectivity with the Central Bank of Montenegro, in order to automatically verify the account status of each client.

Restrictions for Legal and Natural Persons in Ownership Structure

The law introduces additional restrictions for persons holding over 30% ownership in entities undergoing liquidation or bankruptcy, as well as in entities that fail to settle tax obligations. Such persons can no longer establish new business entities, register entrepreneurial activity, or acquire shares in other companies, except in special circumstances such as inheritance or a court decision.

Penalty Provisions

Additional penalties are prescribed for:

• performing transactions through blocked accounts,
• failure to provide technical infrastructure for data exchange with the CBCG.

These provisions aim to prevent misuse of electronic services and ensure full control of transactions at the financial system level.

By adopting these amendments, Montenegro further strengthens its legal mechanisms in combating the grey economy, financial non-transparency, and business abuse. Special focus is placed on digital transactions, representing a step forward toward modernization of the financial system, but with strict preservation of fiscal discipline.