The Government of Montenegro has sent to the Parliament of Montenegro the proposal for the Law on Social Economy thus introducing a clear legal frawework for this area for the first time.
Under the proposal, organizations seeking social economy status would have to define a clear social mission and reinvest at least 50% of their net profit, or surplus revenue, into activities that generate social or community benefits.
According to the draft law, reinvesting could be used to expand operations, purchase equipment, support social innovation and education, develop organic production or create jobs, particularly for vulnerable and hard-to-employ groups such as people with disabilities, young people without any work experience, women from rural areas and the long-term unemployed.
The law would also introduce democratic or participatory governance models and require transparent operations, including annual reports on social impact.
A register of social economy entities would be established and managed by the Ministry of Labour, Employment and Social Dialogue.
The Government says the sector has so far lacked a clearly defined legal status, reliable data and tailored financial instruments, leaving many organizations dependent on project-based and donor funding.
The proposed framework is aligned with the European model of social economy development.
