Since gaining independence in 2006 Montenegro has made a steady GDP growth and managed to attract vast foreign direct investments in various sectors, but mainly tourism, luxury development and energy. Montenegro is a safe and politically stable country that has great potential in the long-term vision and that shall continue its economic growth quite stably in the next years, regardless of its EU membership, forecasted sometimes after 2020 and still at an initial stage of negotiation. Nonetheless, full membership in World Trade Organisation and the successful process of accessing to NATO (officially, holding an “Invitee” status which allows its representatives to participate as observers in Allied meetings, having Allied foreign ministers signed the Accession Protocol for Montenegro on 19 May 2016) are making Montenegro more competitive and safer place for investments. Therefore, investors from more than 90 countries operate in Montenegro at the moment, and a total inflow of 620 million Euros of foreign direct investments was recorded in 2015 (up for around 24% since 2014). By law in Montenegro, all foreign investors enjoy national treatment, so they can establish business organisations or invest in real estate in Montenegro territory by same conditions as nationals. By the same law, the assets of foreign investors in Montenegro cannot be subject to expropriation (except when the law stipulates the existence of public interest to do so, which is done for a fee in accordance with the law). Since January 2016, foreigners that invest in properties can obtain a residential permit with a proper support by a local professional. Montenegro also has a very open visa regime, so Russian citizens can stay up to 3 months without renewing their visa, while EU, USA, UAE and Azerbaijani citizens do not need visas for stays up to 90 days.
Constant efforts of the government, as well as the private sector, to create better business environment brings great results which are recognized by foreign investors and organisations such as World Bank which ranked Montenegro on 46th place out of 189 countries in their Doing Business Report lately. These efforts include creating one of the most attractive tax systems in Europe, various subventions for foreign investors depending on the sector they invest in, creating Business Zones in 8 cities that have special favourable business conditions, and constant improvement of business procedures, infrastructure, work force expertise, etc. Lowest corporate profit tax in Europe and one of the lowest in the world (only 9%) puts Montenegro in top of the list of most desirable investment destinations. Moreover, after paying profit tax, foreign investors have no limits to move their profit to their foreign accounts. Montenegro offers freehold real estate ownership to nationals as well as foreign citizens.
Montenegro has a favorable geo position, which makes it even more desirable for foreign investors, and is very close to many European countries, only up to 2h flight from main cities and business centers. With two internationa airports in the country (Podgorica and Tivat) and Dubrovnik international airport only 26 km from the border, Montenero is easily accessible from any country in Europe. Besides airports, there are 4 international ports (including Port of Bar which is one of the main freight ports in Adriatic), railway connection to Belgrade and Europe, and in addition to that, a new highway is being built and it will make it easier to travel or transport through Montenegro.
An access door to Europe, a gate to Russia and to the CIS members: based on bilateral free trade agreements signed with several countries, products manufactured in EU and neighbouring countries generally are not subject to Custom fees. The opportunity to re-export semi-worked products, whose manufacture is completed in Montenegro, together with an economical labour cost, inexpensive utilities, a more affordable cost of living, an attractive tax regime and a geographic strategic position, makes of Montenegro a stronghold for “players” that are looking to do business across multiple platforms, still operating in a very safe environment backed by the upcoming access to NATO.
- GDP growth in 2015 – around 3,5 %
- Expected GDP growth in 2016 and 2017 – 3,8 and 4 %
- FDI growth in 2015 – around 24 % (619 mill € in total)
- Over 5,000 foreign companies registered in Montenegro
- Investors from more than 90 countries
- Minimal founding capital for a Limited Liability Company – 1 €
- Time needed to register a company – 5 days
- Possibility of obtaining resident status based on real estate purchase or opening a company in Montenegro
- Corporate profit tax – 9%
- Personal income tax – 9% and 13%
- Property tax – 0,08% – 0,8% of the property value
- Property transfer tax – 3%
- Various government incentives and subventions
- Favorable financing options
- Possibility of accessing to financial assets from various funds (IPA, EBRD fund, Abu Dhabi Agricultural Fund, etc)
- Low work force cost
- Low operating costs in business
- High and fast real estate appreciation based on the location (up to 300% within 5 years)
Montenegro is known for low entry barriers for business, competitive economy, one of the most attractive tax regimes in the world and constant working on improving business environment for both local and foreign investors. In Montenegro, foreign investors have national treatment in every aspect of business, no matter if they act in person or through a foreign company. Offshore companies are entitled to be the sole owner of a local ltd company and to open business bank accounts, although all financial institutions will need to identify the ultimate beneficiary of the bank account. Montenegro uses EURO (€) as the only valid circulating currency and benefits from all the advantages it brings; without being part of Eurozone, the currency volatility impacts are non-existent and lead foreign investors flocking from countries which currency is constantly subject to a high volatility (e.g. Russians and Russian Rouble). Indeed, the use of Euro currency attracts many foreign investors from non-EU countries that are looking for stability for their investments abroad. As business environment is constantly improving, more investment opportunities arise together with faster procedures, faster communication, better infrastructure, more financing options, etc.
We, at AZ Consulting can support foreign investors to set up and to manage a ltd company, among several other services we provide at a European high standard. Thanks to its direct connections with the ownership and the top management of the main local banks, AZ Consulting also offers support in establishing good relationships in Montenegro banking sector and a choice of the best interlocutors based on personal experience and on successful stories of its clients. Constantly communicating with relevant ministries, our team can provide a direct access to a dialogue with the local Government and recommendations for the best subventions program that would suit your investment.