On May 31, 2023, the Ministry of Internal Affairs presented a draft amendment to the Law on Foreigners (“Amendments”). This legal act aims to further align with EU legal standards and improve procedures related to temporary residence and work permits.
Responsibility of Foreign Companies:
Foreign companies are required to designate a responsible person for maintaining documents related to temporarily assigned foreign workers, including employment contracts, salary calculations, proof of salary payments, working hours records, proof of social insurance during the temporary assignment, health care documents, and work permits.
Temporary Residence and Work Permits: Executive directors with more than 51% ownership, entrepreneurs, and seasonal workers are exempt from the obligation to provide evidence of education and nostrification. A significant improvement introduced by these amendments is the authorization for foreigners to empower their employer, another company, or an individual when applying for a work permit, using a template provided by the Ministry of Internal Affairs.
The extension of temporary residence and work permits for entrepreneurs and executive directors with more than 51% ownership is granted under the condition that they can prove the employment of at least three employees, with at least one being a Montenegrin citizen, all under full-time employment contracts. If the foreigner has already submitted evidence of education, nostrification, and health certificates during the initial work permit application process, they are not obliged to resubmit these documents during the extension process.
Special attention is given to foreigners employed in companies governed by special laws requiring regulatory approval for establishing employment. In such cases, work permits can be extended for the duration of regulatory approval, even exceeding the standard three-year period. This is particularly relevant for top management in corporations operating in Montenegro, such as banks and other credit institutions.
Regulation for Temporarily Posted Foreign Workers:
Regardless of the law governing the employment relationship, foreign companies sending employees to Montenegro must adhere to local labor regulations. This includes areas such as working hours, leave, salary, health and safety, discrimination, as well as protection for pregnant women, women on maternity or parental leave, children, and youth.
Simplified Process for Family Reunification Permit: One significant amendment relates to exempting foreigners obtaining a temporary residence permit as close family members of foreigners or Montenegrin citizens from the requirement to provide proof of sufficient funds for temporary residence approval.
Digital Nomad Permit: Foreigners applying for temporary residence permits as digital nomads must now provide proof of the registration of a foreign company.
Real Estate Residence Permit: The amendments introduce complexity to the process by establishing a legal basis for the government to determine the conditions for assessing the value of real estate used as a basis for obtaining a residence permit. Additionally, foreigners seeking an extension for a real estate residence permit must prove the payment of related taxes.
Permanent Residence: In addition to the general requirements for obtaining permanent residence (valid documents, sufficient funds, health insurance, accommodation, and knowledge of the Montenegrin language), the amendments introduce an obligation to prove that the foreigner has settled taxes.
Inclusivity for Same-Sex Partners: Individuals in same-sex partnerships can now obtain temporary residence permits, ensuring equal treatment and recognition of their relationships as with married couples. However, questions arise about the absence of recognition for non-marital unions as a basis for acquiring residence permits.
In conclusion, these amendments exhibit both positive and negative aspects. While they contribute to inclusivity, transparency, and alignment with EU standards, certain conditions and requirements may pose challenges for businesses and foreign workers, necessitating a careful balance between global openness and domestic interests.
Positive Aspects:
Diversity and Inclusion: The amendments showcase a commitment to diversity by allowing individuals in same-sex partnerships to obtain temporary residence permits, promoting inclusivity and recognizing a broader spectrum of relationships.
Streamlining Processes: The empowerment of foreigners to authorize other entities during the application for work permits, as well as the simplification of family reunification procedures, contributes to a more streamlined and efficient administrative process.
Modern Approach for Digital Nomads: The requirement for digital nomads to provide proof of a registered foreign company aligns with contemporary work trends and facilitates the incorporation of remote work styles into legal frameworks.
Transparency in Employment: The insistence on foreign companies maintaining specific documentation for temporarily assigned workers enhances transparency and legal compliance in employment relationships.
Negative Aspects:
Business Barriers for Entrepreneurs and Executives: The conditions set for the extension of work permits for entrepreneurs and executive directors, including the requirement to employ a certain number of individuals, may be perceived as potential barriers to business operations.
Administrative Burden for Foreign Companies: While the aim is greater transparency, the additional documentation requirements for foreign companies could impose an administrative burden, potentially affecting the efficiency of their operations.
Complexity in Real Estate Residence Permits: The introduction of a legal basis for the government to determine real estate values adds complexity to the process, potentially making it more challenging for foreigners seeking residence permits based on property ownership.
Limited Recognition of Non-Marital Unions: While recognizing same-sex partnerships is a positive step, the absence of recognition for non-marital unions raises questions about the inclusivity of the amendments regarding various relationship structures.
Overall Implications:
These amendments reflect Montenegro’s efforts to align its legislation with EU standards and foster a more inclusive and transparent legal framework. However, balancing openness to global trends with the protection of domestic interests remains a delicate task. The positive steps toward recognizing diverse relationships and modern work arrangements should be weighed against the potential challenges posed to businesses and the administrative burden on foreign entities. Striking a careful balance will be crucial to ensuring the successful implementation of these legal changes in practice.
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