Montenegro: Investing

FDI in Figures

Montenegro has the potential to become a magnet for investment because of its business-focused economic system and low corporate tax rate. According to the latest data available from the World Bank, Montenegro´s total FDI inflows reached EUR 877 million in 2022, up by 25.4% year-on-year and above the pre-COVID level. The stock of FDI was estimated at USD 5.68 billion in 2021 (around 93.1% of GDP – data UNCTAD - World Investment Report 2023), with a per capita investment ratio among the highest in Europe. The sectors attracting most FDIs are tourism, real estate, energy, telecommunications, banking, and construction. Data from the Montenegrin Investment Promotion Agency shows that the main investing countries are Russia (14.8% of inflows between 2010-20), Switzerland (6.8%), Serbia (6%), Austria (5.9%), Italy (5.9%), and the Netherlands (5.4%). According to preliminary data by the Central Bank, total FDI inflow declined by 26% to EUR 857 million in 2023. The decrease was due to reduced investments in the form of intercompany debt, lower investments in companies and banks, and an increase in the withdrawal of foreign investments. Investments in companies and banks saw a 57% decrease to EUR 95 million, while investments in real estate increased by 3.3% to EUR 463 million during the same period. FDI inflow in the form of intercompany debt also fell by 34% to EUR 265 million.

The country offers great economic freedom and monetary stability. Domestic and foreign companies enjoy equal treatment in Montenegro. Foreign companies can own 100% of a domestic company, and their profits and dividends can be repatriated without limitations or restrictions. Furthermore, Montenegro does not have foreign investment screening. Nevertheless, corruption, the politicization of justice, organized crime, an approximate and unreliable land registry, and sluggish bureaucracy are obstacles to FDIs. The Privatization and Capital Investment Council is the governmental institution that manages, controls, and implements the privatization process in the country, which already involved almost 90% of formerly state-owned enterprises. Some initiatives have been taken to improve the business environment such as the establishment of the Credit Guarantee Fund to foster credit lines for banks. The country has implemented dedicated legislation providing guarantees and safeguards for foreign investors. Additionally, the country has adopted over 20 other laws related to business, all aligned with EU standards. Montenegro ranks 75th among the 132 economies on the Global Innovation Index 2023 and 83rd out of 184 countries on the latest Index of Economic Freedom.

What to consider if you invest in Montenegro

Strong Points

Montenegro's key assets in terms of attracting FDI include:

- one of the most competitive tax systems in Europe (rate of 9%);
- qualified and low-cost workforce;
- touristic potential (sea, mountain, climate);
- hydroelectric potential;
- negotiations for accession to the European Union;
- good quality of education and health systems.

Weak Points

Montenegro's weak points impeding FDI include:

- small size of its domestic market;
- high dependence on tourism, construction and energy sectors;
- electricity generation largely based on subsidised coal;
- deficient road and electrical networks;
- structural unemployment (14%) and lack of qualified personnel;
- importance of ethnic voting and political blockage;
- poor business environment;
- substantial informal economy (39% of GDP) and low participation rate (54%).

Government Measures to Motivate or Restrict FDI

In Montenegro, private ownership is protected by the Constitution and includes equal treatment of foreigners.
Montenegro has a favorable tax regime with the lowest corporate tax rate in the region at nine percent.
Foreign investors can participate in local privatization processes and can own land in Montenegro generally on the same terms as locals. Expropriation of property can only occur for a "compelling public purpose” and compensation must be made at fair market value. There has been no known expropriation of foreign investments in Montenegro. International arbitration is allowed in commercial disputes involving foreign investors.

Registration procedures have been simplified to such an extent that it is possible to complete all registration processes online. In addition, bankruptcy laws have been streamlined to make it easier to liquidate a company; accounting standards have been brought up to international norms; and custom regulations have been simplified. There are no mandated performance requirements.

To learn more you can visit the MIA website, the government agency dedicated to investment promotion.  

Bilateral Investment Conventions Signed By Montenegro

The bilateral investments treaties signed by the Montenegro may be found on the Policy investment hub website.

Procedures Relative to Foreign Investment

Freedom of Establishment

Foreign  legal  and  natural  persons  have  the  right  to  establish  a  company  in  Montenegro  under  the same conditions as nationals. The most common forms of companies are: limited liability company (LLC) and joint stock company (JSC).

Acquisition of Holdings

There are no limits on foreign control and right to private ownership in Montenegro.

Obligation to Declare

Since May 2011 new business entities are able to register in one place any economic activity. A one-counter operating system allows business entities by registering in the Central Registry of Business Entities to be automatically registered in the register of the Department of Statistics, the register of taxpayers and customs payers, the register of payers of value added tax (VAT) and excise taxpayers. With changes in the regulations electronic registration of companies is enabled through the portal www.euprava.me.

To learn more about the registration process of a foreign company, you may visit the dedicated page on Invest in Montenegro website.

Competent Organisation For the Declaration

E-Regulation portal (one-window portal)

Requests For Specific Authorisations

Any foreign investor is free to invest anywhere in the country, except in places defined by the Law as forbidden areas (national parks, border zones, etc.). Sensitive sectors such as arms are subject to specific legislation.

Investment Opportunities

Investment Aid Agency

Montenegrin Investment Agency (MIA)

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Montenegro
DgMarket, Tenders Worldwide

Other Useful Resources

Ministry of Economy
Investing in Montenegro
Montenegro Foreign Investors Council
Montenegro Official Investment and Business Opportunities Guide 2018

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