November 24 (SeeNews) - Montenegrin policy-makers should focus on the simplification of business-related legislation in the small and-medium sized enterprise (SME) sector, the European Commission (EC) said.
The country should lower the number and amount of local authority fees and taxes, and streamline the process for issuing work permits, while the framework for business transfers needs to be improved, as does cooperation between higher education institutions and businesses, the EC said in a report reviewing the performance of SMEs in EU member states and several candidate countries published on Wednesday.
Access to finance for SMEs should also be improved, including by expanding non-financial support services in this area. Montenegro needs to ensure that its State Aid Control Commission operates independently in order to ensure a more level playing field for businesses. There is also a need to make sure that the public authorities are more customer-orientated, in particular for SMEs, according to the report.
The profile of Montenegro under the Small Business Act for Europe (SBA) presents a mixed picture, with several principles score above the EU average, including ‘second chance’, the EC noted.
"Responsive administration’ continues to improve, although it remains below the level achieved in the EU."
However, limitations in availability of data need to be taken into account when interpreting the overall results. During 2016 and the first quarter of 2017, Montenegro introduced SBA-relevant measures that address six SBA principles, the Commission said.
Nearly 70% of value added and more than three quarters of national employment in Montenegro is generated by SMEs, compared with an average of 57 % and two thirds, respectively, for SMEs in the EU. SMEs are the main growth driver in Montenegro. Value added increased by almost 20 % in 2012-2015, while employment rose around half as much in 2011-2015.
Growth is estimated to have been particularly strong in micro firms, where employment is projected to have increased by over a third between 2011 and 2015. Given the scale of SMEs’ contribution to the economy, further SME employment and value-added growth can be expected, the EC said.