Montenegro belongs to the central Mediterranean region. It is located in South-East Europe, in the central part of the Balkan Peninsula and southern coast of the Adriatic Sea.
Montenegro regained its independence in 2006. Taking charge of its own destiny and responsibility for stability, security and prosperity has led to new priorities: integration into the European Union (EU) and the North Atlantic Treaty Organization (NATO). The process of EU integration emphasizes not only market accessibility, but also the acceptance of overall European standards and values. As a result, Montenegro has opened the negotiation process with the EU in June 2012. The Country has liberalized its visa regime with the countries of the Schengen zone. Simultaneously, integration into NATO is a safety mechanism through the collective defense guarantees provided by NATO and its legal system. Montenegro joined the Partnership for Peace (PfP) in 2006 and in 2009 Montenegro’s application for the Membership Action Plan (MAP) was accepted. NATO Foreign Ministers decided in December 2015 to invite Montenegro to start accession talks to become the 29th member of the Alliance.
Over the past years, Montenegro has placed an emphasis on creating a business friendly environment, which has attracted reputable foreign investors and resulted in significant economic development and growth. The clear message to potential investors is that Montenegro is an open and attractive investment destination. During the three year period before the economic crisis, Montenegro recorded the fastest GDP growth in the region, with an average growth rate of 9% per year. One of key drivers of economic growth was an influx of foreign direct investment (FDI). For five successive years, Montenegro has attracted significant FDI and has become a leader in Europe in terms of FDI per capita. Despite the global financial crisis in 2009, Montenegro recorded an even higher level of FDI than ever before (Euro 1.07 billion), with a somewhat changed structure of investor preferences compared to the previous years and with the energy sector attracting even more interest. However, the decline in FDI from the post-independence boom is evident, but in per capita terms Montenegro still ranks first among the five countries of the South-East Europe region. For example, in 2011, which saw the lowest level of FDI in several years, the per capita FDI of €869 was more than double the next best result – €341 in Serbia.
Continuous improvement of the business environment in Montenegro was recognized by the latest World Bank Doing Business rating (2016), in which Montenegro took 46th place out of the 189 countries that were rated. Currently, Montenegro is preparing a platform for a number of upcoming investment opportunities, including those in tourism, infrastructure, energy and agriculture related areas.
Taking into account a large number of Free Trade Agreements, Montenegro is part of a larger market of several hundred million people. With one of the most favorable tax systems, free flow of capital and Euro as the official currency, Montenegro is one of the most attractive business destinations in this part of Europe. Continuous improvement of the business environment and also constant implementation of structural reforms as well as support to priority sectors: tourism, energy, agriculture, industrial production and services resulted in the growth of GDP by 3,2 % in 2015 with the projection of further growth in the forthcoming years.
HUB FOR BUSINESS FOR THE REGION AND BEYOND
Montenegro is well-positioned to become your business hub for the regional market and beyond. The reasons include:
- A business friendly environment – perhaps the most important factor of all. Our Country, with its forward-looking legislation and customer oriented administration is very open for business. Montenegro has signed free trade agreements with the EU, CEFTA, EFTA, Russia, Turkey and the Ukraine.
- National treatment of foreign investors – foreign legal entities can do business in Montenegro under the same conditions as nationals, i.e. equal treatment of foreign and local investors.
- A competitive tax system – simple, cost effective and user-friendly system, with a flat and competitive tax rates:
Personal Income Tax 9% (15% to gross personal income above 720 EUR); Corporate Income Tax 9%; Value Added Tax (VAT) 19% (reduced to 7% for tourism and 0% for some basic products); Withholding Tax 9% on dividends / profit distribution, capital gain, royalties, intellectual property rights, rental income, consulting, marketing and audit services; Social Security Contributions 33,8%.
There are some 39 treaties on double taxation avoidance which are in force in Montenegro, including with France, Germany, Italy etc.
- A good location. Travel to Montenegro and flight connections – with daily flights to regional capitals and major cities in Europe; it is easy to travel to Montenegro on business. The Port of Bar: with a favorable geographical position (42°0’ N 19°05’ E) together with the Belgrade-Bar railway line and the road network, comprise a traffic system that enables ease of connection to the port and surrounding area.
- Currency – the Euro. That means that there is no hidden inflation and it is easy to calculate a consolidated balance sheet and income statements for your firm.
- Financial services – 15 commercial banks (none of which are government owned) are currently well-established in Montenegro.
- Telecommunications – excellent connections with the rest of the world via optical cables, a 3G/4G Networks and fast Internet-based service permit excellent business communications.
VIEW FROM OUTSIDE
Heritage Foundation – Economic Freedom Index
World Economic Forum – Global Competitiveness Index
World Bank – Doing Business Report
New investments in infrastructure, the energy sector and tourism are expected to drive the economy forward in upcoming years. Several important investment projects are either ongoing, already planned or expected to be implemented in the future among which are: ongoing Marina Porto Montenegro and development of the Luštica Peninsula, Kumbor Resort in conjunction with the One and Only hotel brand, Submarine Power Transition Cable; the upcoming projects include construction of the first Highway between Bar and Boljari, construction of hydro-electric power plants on the Morača River, tender for exploration of upstream Petroleum resources as well as the joint regional initiative for the Adriatic-Ionian Highway.
The World Travel and Tourism Council (WTTC) have estimated that Montenegro has exceptional revenue opportunities in the spheres of tourism and travel. According to their estimates, Montenegro could, in the next 10 years, become the leading economy in the region in the field of tourism and travel. WTTC has estimated that Montenegro in the next 10 years could have revenues from tourism up to 2 billion euro.
The most important thing is that the quality of the business environment in Montenegro has also been recognized by referent investors. Today we can be proud of the number and reputation of the investors, particularly in the sector of tourism. Tourist and yachting industry already recognize Montenegro by the project of a Canadian investor Porto Montenegro which is continuously and dynamically developed; the company from Azerbaijan – SOCAR is constructing a luxury resort with the first One & Only hotel in Europe worth more than EUR 500 million; Aman Resorts as one of the leading hotel brands in the world has been successfully conducting business in Montenegro, and will continue the investment cycle this year by constructing a new hotel.
More information on tourism projects is available on these websites:
The energy system of Montenegro has relatively low demand of around 4,500 gigawatt hours (GWh) annually. Of the total electricity, 42 percent is consumed by the aluminum plant in Podgorica; three percent is consumed by the Niksic steel plant; and less than one percent by the Railroad of Montenegro. Household electricity consumption covers 54 percent of the demand. Around 34 percent of consumption is serviced by imports from the regional system. The majority of electricity in Montenegro is produced at the Pljevlja Thermo Power Plant, the Perucica Hydro Plant, and the Piva Hydro Plant.
Montenegro has good potential for the development of hydro and thermal plants, as well as for solar and wind energy. As a top energy priority, the Government wants to develop the Moraca River potential through a series of four hydroelectric-power plants for a total of 238 megawatts and an annual production of 693 (GWh). Design / construction tenders for these hydro plants are expected in the near future.
The Project ”Maoče” refers to the exploitation of coal, conditioned by the construction of a thermal power plant with an estimated capacity of 500 MW. Coal reserves in the basin of Maoče are geological (123 million t) and exploitation (109.9 million tons). The annual production potential is 3,500 GWh.
HPP Komarnica would be frontal HPP and accumulation in the basin of river Piva. Location of dam is at the end of backwater of existing accumulation of HPP Piva. The construction of concrete arch dam 176 m high. Hydropower plant would be dam toe powerhouse with two power generator units with installed power of 168 MW and annual production of 232 GWh. Level of backwater accumulation is limited with the position of town Šavnik (816 mnm). Estimated value of the project is around 183 million €.
More information on energy projects and legislative framework is available on:
According to official statistics, the share of agriculture, hunting, and forestry in GDP (Gross Domestic Product) is 8% (2013). Agriculture in Montenegro is significant source of employment, income generation and it provides food for some of the most vulnerable groups of society, particularly those in the North of Montenegro, in the mountain areas, where the possibilities for employment are limited. The sector of agriculture is critical for development of rural areas. As mentioned, in the Northern Montenegro, agriculture, along with tourism, is the main strategic development branch. About 36% of total population lives in rural areas, while 70% of their total income comes from agriculture. Nevertheless, quality and productivity of agricultural production on farms have an immense potential for improvement through setting up cooperatives, development of short value chains and improving farmers’ knowledge on deploying adequate agro ecological measures. There is a significant potential for productivity increase, as well as linking agriculture (especially organic food and traditional specialties production) with growing high-end tourism offer.
Project based regional cooperation (II-Highway, II-Pipeline, and Undersea Cable)
The project of energy cable which we are realizing with the Italian company and which should connect Montenegro and the whole region with Italy and West Europe will make Montenegro become a regional hub for transmission of electrical energy. Simultaneously, this will make overall energy potential in this part of Europe more attractive and make for better export performance. At the same time we improve the energy transmission network and make better connection with the countries of the region.
Along with our partners from Albania, Bosnia and Herzegovina, Croatia and Azerbaijan, we are involved in agreements on the construction of IAP – Ionian Adriatic Pipeline, as a logical continuation of the project TAP (Trans Adriatic Pipeline).
Montenegro prepared and all the countries expressed the interest to support Memorandum of Understanding for Adriatic Ionian Highway. In addition we received expression of interest of other interested parties to support the initiative including EU Commission, international financial institutions etc.
Government owned companies
Private enterprises in Montenegro are able to compete with public enterprises under the same terms and conditions with respect to access to markets, credit and other business operations. From the beginning of the privatization process in 1999 through the end of September 2012, nearly 90 percent of the capital in Montenegrin companies had been privatized. The most important state-owned companies include the Port of Bar, Montenegro Railways, Montenegro Airlines, Airports of Montenegro, and the Plantaze Vineyard. All of these companies are registered as joint-stock companies, with the Government of Montenegro appointing one or more representatives to each Board based on the ownership structure. All must provide an annual report to the government and are subject to independent audits.
The privatization process in Montenegro is in its final phase. The majority of companies that have not yet been privatized are of strategic importance to the Montenegrin economy in such fields as energy, transport, and tourism. Further privatization of state-owned companies should contribute to better economic performance, increase the competitiveness of the country and enable the Government of Montenegro to generate higher revenues which will enhance capital investments and reduce debts. More information about the Council and the actual privatization plan is available on the Council’s website:
MINISTRY OF FOREIGN AFFAIRS AND EUROPEAN INTEGRATION
General Directorate for Economic Diplomacy and Cultural Cooperation
Address: Stanka Dragojevica 2, 81000 Podgorica, Montenegro
Tel: +382 (0)20 511 286
MINISTRY OF ECONOMY
Rimski trg 46, 81000 Podgorica
Tel: +382 20 482 203
E-mail: firstname.lastname@example.org, www.minekon.gov.me
MINISTRY OF SUSTAINABLE DEVELOPMENT AND TOURISM
IV Proleterske Brigade 19, 81000 Podgorica
Tel: +382 20 446 257
E-mail: email@example.com, www.mrt.gov.me
MINISTRY OF TRANSPORT AND MARITIME AFFAIRS
Rimski trg 46, 81000 Podgorica
Tel: +382 20 234 179
E-mail: firstname.lastname@example.org, www.minsaob.gov.me
MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT
Rimski trg 46, 81000 Podgorica
Tel: +382 20 482 109
E-mail: email@example.com, www.minpolj.gov.me
CHAMBER OF ECONOMY OF MONTENEGRO
Novaka Miloševa 29/II, 81000 Podgorica
Tel: +382 20 230 545
e-mail: firstname.lastname@example.org, www.privrednakomora.me
MONTENGRIN INVESTMENT PROMOTION AGENCY (MIPA)
Jovana Tomaševića 2A, 81000 Podgorica
Tel: +382 20 203 141
E-mail: email@example.com, www.mipa.co.me
SECRETARIAT FOR DEVELOPMENT PROJECTS
Moskovska 2b, 81000 Podgorica
Tel: + 382 20 220 030
E-mail: firstname.lastname@example.org, www.srp.gov.me
CENTRAL BANK OF MONTENEGRO
Moskovska 2b, 81000 Podgorica
Tel: +382 20 664 140
STATISTICAL OFFICE OF MONTENEGRO
IV Proleterske 2, 81000 Podgorica
Tel: +382 20 230 811
E-mail: email@example.com, www.monstat.org
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