Employer of Record in Montenegro: What the Law Actually Allows

If your company wants someone working in Montenegro next month and you do not want to incorporate first, you have probably been offered an "employer of record". The offer is framed as a commercial choice. In Montenegro it is not: the arrangement either fits a licensing regime the Labour Act sets out in detail, or it does not — and the company that receives the worker carries statutory duties and fines of its own either way.

No Montenegrin statute uses the phrase and no such licence exists. What the law has is a temporary employment agency regime (agencija za privremeno ustupanje zaposlenih) in Labour Act Articles 52 to 59, and a separate set of posted-worker permits in the Law on Foreigners. One of those posted-worker routes is exactly the cross-border staffing model international EOR providers run — written into the statute, but switched off until Montenegro joins the EU.

Sources, checked 12 September 2026: Zakon o radu ("Sl. list CG" 74/19, 8/21, 59/21, 68/21, 145/21, 77/24, 84/24, 86/24, 122/25, 165/25, 51/26, 103/26); Zakon o strancima ("Sl. list CG" 12/18, 3/19, 86/22, 77/24, 3/26, 33/26); Zakon o porezu na dobit pravnih lica. The Government's consolidated Labour Act text runs only to 51/26, so Articles 57 and 58 below are stated from amending act 103/26 in the gazette; a Constitutional Court decision of 26 December 2025 ("Sl. list CG" 30/2026) rejected a challenge to the 8/21 amendment, which stands. General information, not advice; confirm any figure against the printed gazette before relying on it in a filing.

The four structures, and which ones work today

Everything else — paying a person in Montenegro directly from abroad, a "contractor" who works fixed hours under your instructions, an intermediary who invoices you and pays the person without an agency licence — is not a further structure. It is one of the above done without the paperwork.

Route one: the licensed Montenegrin agency

This is the closest thing Montenegro has to an EOR. An agency is an employer that concludes an employment contract with a worker in order to lease that worker to a user for fixed-term work (Labour Act Article 52(1)-(2)), and the worker's rights sit with the agency (Article 55(2)). So far, the EOR model. The gate is Article 53:

• The agency is entered in a register kept by the Ministry responsible for labour (Article 53(1)).
• It may carry on leasing only as its sole activity, and only with a work permit issued by the Ministry on the proposal of a Commission for issuing and withdrawing such permits (Article 53(2)) — three members and a secretary, all Ministry officials (Article 53(3)).
• The Ministry decides on an application within 15 days (Article 53(5)).

The sole-activity rule disqualifies most improvised arrangements: a Montenegrin consultancy, accountancy or recruitment firm that also "employs your people for you" cannot lease staff lawfully, because Article 53(2) permits leasing only where it is the entity's sole activity. The agency also may not charge the worker for being leased, or for being subsequently hired by the user (Article 52(5)).

The register kept under Article 53(1) is published on the Government's document service. It records each agency's name, date of entry, seat, authorised representative, the number and date of the licensing decision and — where it applies — a deletion date and reason, including entries marked as licence withdrawn by a named decision. Having been on the list is not the same as being licensed now, and the register itself shows that the distinction is real.

The eight situations in which the leasing agreement cannot be concluded

The agency and the user sign a leasing agreement (sporazum o ustupanju zaposlenih) stating at least the number of workers, the period, the place of work, the jobs, the health and safety measures at that workplace, and how and when the user will send the agency the payroll calculation (Labour Act Article 54(1)-(2)). Article 54(4) then forbids that agreement in eight cases, several of which catch ordinary commercial intentions:

1. Replacing workers on strike at the user.
2. Work for which the user made redundancies in the previous six months.
3. A worker already engaged at the user under a leasing arrangement within 24 months.
4. A worker employed by the user within 24 months.
5. Jobs with special working conditions under health and safety rules that the leased worker does not meet.
6. Work within the agency's own activity.
7. Where the user founded, or holds a stake in, the agency.
8. Other cases contrary to the public interest under a collective agreement binding the user.

Points 3 and 4 do not apply to seasonal work (Article 54(5)). Point 7 closes the obvious workaround: you cannot set up your own leasing agency and lease staff to yourself.

The 24-month clock, and how an arrangement turns into permanent employment

This is the exposure a service agreement with a provider cannot contract away. A fixed-term contract with the same worker cannot run, continuously or with breaks, for more than 24 months (Labour Act Article 37(2)), and a break shorter than 70 days does not count as a break (Article 37(3)). Critically, time the worker spent leased to you through an agency counts towards that same 24-month period (Article 37(4)).

If a fixed-term contract or leasing agreement is concluded contrary to Article 37 and Article 54(4)(3)-(4), or the worker keeps working after the term expires, the worker is deemed to have entered into an indefinite employment relationship, and the employer has five days from the irregularity being established to conclude an indefinite contract (Article 38(1)-(2)). Failing to do so costs a legal person €2,000 to €20,000 (Article 208(1)(8)).

One limit deserves candour. Article 55(2) puts the worker's rights with the agency, while Article 38 speaks of "the employer" without saying which one in a leasing chain. Whether a defective arrangement converts into indefinite employment at the agency or at the user is not resolved in terms by the statute. Plan on the question being open, not on the user being safe.

What you owe as the user, even though you are not the employer

The Labour Act imposes duties on the user directly:

• You are treated as the employer for health and safety and for the special protection of certain categories of worker (Article 58(1)).
• New since 16 July 2026: you must take the measures needed to carry out health-and-safety activity and prevent occupational and work-related illness, and inform the agency about the fulfilment of obligations arising from the employment relationship (Article 58(2), inserted by "Sl. list CG" 103/26, in force on publication). The former paragraphs 2, 3 and 4 became 3, 4 and 5.
• At least once every six months you must tell the trade union or workers' representative how many leased workers you engage and why — now Article 58(3). The same 2026 amendment renumbered the penalty cross-reference; a breach costs a legal person €1,000 to €10,000 (Article 209(1)(15)).
• You must post vacancies for which leased workers qualify on the notice board (Article 58(4)), and leased workers count equally towards trade union representativeness at your company (Article 58(5)).
• You must keep a record of workers engaged through a temporary employment agency (Article 19(1)(8)).
• Damage the leased worker causes to a third party is compensated by you; damage the worker suffers at work is claimed from the agency unless the leasing agreement says otherwise; damage the worker causes to you is the agency's liability (Article 59).

The labour inspectorate's published checklist for these agencies runs to 18 questions, and the last three are addressed to the user: the six-month union notification, the notice board and union representativeness. The inspector arrives with them already written down.

Foreign nationals: the cross-border route is drafted and switched off

The Law on Foreigners issues a temporary residence and work permit for three purposes — employment, seasonal employment and the work of a posted worker (Article 68(1)). The posted-worker permit covers contracted services, intra-corporate movement, and supply of a foreign national to a Montenegrin employer through an agency registered outside Montenegro (Article 68(3), Article 75a).

Article 75a is the international EOR model in statutory form: an agency registered outside Montenegro may supply a foreign national to a user here under a leasing agreement, and the agency is deemed the employer, except for health and safety where the user is. Article 75b sets the evidence and caps the permit at one year, extendable to two.

None of it is in application. Article 221b provides that Article 21(7)-(10), Article 68(3)(3), Articles 75, 75a, 75b, 75v and 75g, and Article 78(1)(7a) and (7v) apply from the day Montenegro accedes to the European Union. Montenegro has not acceded. A provider telling you its foreign entity can be the employer of record of a foreign national working in Montenegro is describing a provision that does not yet operate.

The contracted-services route is intact: Article 72 allows a foreigner to provide services under a contract between a foreign company and a Montenegrin legal person, Article 73 caps the permit at one year and at most two, and the quota exemption in Article 78(1)(7) is untouched. The intra-corporate route is not clean: Article 74 and the Article 78(1)(6) quota exemption are in application, but Article 75, which sets out the evidence for that permit, is itself deferred. Confirm the filing basis before anyone books a flight.

Where the user company gets fined

A foreigner may work only on the jobs the permit or work registration covers, and only with the employer that employs them (Law on Foreigners Article 66(2)). Keep a copy of the permit at the workplace (Article 66(5)), notify the Ministry within eight days if the foreigner stops work early (Article 66(6)), and do not employ or use the work of a foreigner staying unlawfully in Montenegro (Article 66(7)).

That phrase — "or use the work of" — is why the user cannot outsource this risk: the penalty reaches the company that benefits from the work, not only the entity on the contract.

A ban on carrying on the activity for up to six months may also be imposed for the Law on Foreigners offences (Article 210, final paragraph). There is no per-worker multiplier in either statute.

One more exposure sits outside labour law. A non-resident is taxed on profit made through a permanent establishment — a fixed place of business in one of the enumerated forms, a building or installation site counting only beyond six months (Corporate Profit Tax Act Articles 3-4), with preparatory and auxiliary activity excluded (Article 4(5)). The Article 4(4) definition is drafted around fixed places and contains no dependent-agent limb in its own terms; where a double tax treaty applies, the treaty's own article governs and may be drawn differently. This page resolves neither for your facts — only that "we used a provider, so we have no presence" is a conclusion, not a starting position.

Six questions to put to a provider before you sign

1. Which of the four structures is this, by article number?
2. If it is agency leasing: show the entry in the Ministry's register and the current work permit under Article 53(2), and confirm leasing is the sole activity of the employing entity.
3. Has this worker been employed by us, or leased to us, in the last 24 months (Article 54(4)(3)-(4))? Have we made redundancies in this role in the last six (Article 54(4)(2))?
4. Do we or any group company hold a stake in the agency (Article 54(4)(7))?
5. Which entity signs the employment contract, and which appears on the foreigner's permit (Article 66(2))?
6. Who carries the Article 58 user duties and the Article 19(1)(8) record? These stay with us whatever the service agreement says.

If a provider cannot answer question two with a register entry and a decision number, the other answers do not matter.

What we are, and what we are not

RoNa Legal is a registered employment intermediary under activity code 78.10 and a legal adviser. We are not an employer of record, a leasing agency or a labour supplier, and we do not employ your people for you. We read the structure you have been offered against the articles above, tell you which of the four it actually is, and coordinate with licensed agencies where the structure requires one.

Before you sign a service agreement or a leasing agreement, send it to us with the intended start date and the worker's nationality. This work is most useful before the arrangement exists; once a leasing chain has run past the Article 37(4) clock, the options narrow to the ones the statute leaves. If the answer is your own entity, company formation in Montenegro sets out what that involves; if you are hiring foreign nationals directly, read the employer work permit process and the penalties for unlawful employment of foreign workers. To check that a provider's Montenegrin entity exists at all, start with the company register.