Investment Guide

The guide is published biannually and is intended to encourage foreign investment and provide data on the relevant legal and institutional framework. It focuses also on the most attractive investment potentials and provides practical information useful when starting and expanding one's business in Montenegro.

Investment Guide Book 2014
Investment Guide Book 2016

Why Invest in Montenegro?


Since regaining its independence in 2006, Montenegro has been increasingly attractive to foreign investors. Its development is centered around attracting FDI through a competitive business environment, striving to become the business hub of South-East Europe. It offers many rewarding investment opportunities and impressive natural potential along with continuous improvements in the business climate intended to attract foreign investors.

The Montenegrin Government is well aware of the importance of foreign direct investment for sustainable growth of the economy, which makes sense since, so far, the recorded increase in wealth has been driven primarily by large volumes of foreign investment. Its activities have mainly consisted of reforms directed at improvement of the investment climate in Montenegro. We have seen improvements in competitiveness, transparency and business-friendliness. Nevertheless, there is still work to be done and challenges to be overcome. Having become a member of the WTO in April 2012 and due to the process of negotiations for its accession to the EU, as well as having received an official invitation to become a member of NATO, one can be optimistic about further improvements in the Montenegrin trade system and the general business climate in Montenegro. We are certain that it is developing into a reliable and investor-friendly business environment.


Over the years Montenegro has committed itself to establishing a modern market economy and entering the European markets. It recorded the fastest growing GDP in the region up until the decrease in the growth rate in 2009, which occurred largely due to the global economic crisis, but the country has since successfully recovered. The euro is used as Montenegrin legal tender, which is one of the reasons why it is favorable for businesses.

Due to Montenegro’s EU membership aspirations, many reforms have already taken place. They were driven by the EU reform agenda and the goal of developing an investment-friendly environment. Changes that can be observed are, for instance, reduction of some taxes and social contributions, simplification of tax procedures, improvements in the legal framework for bankruptcy procedures, a reduction of the cost and some modifications in the procedures for obtaining construction permits. Improvements in the regulatory environment proved to be necessary to ensure legal security and reducing the regulatory burden on businesses.

There is a trend of significant trade liberalization and rising competitiveness in the Montenegrin economy in general. In many reports issued by various international organizations from year to year Montenegro has been demonstrating constant improvement. For instance, Montenegro improved its position from 47th place in the Doing Business report to 46th for 2016. However, we are also expecting further progress and more developments in order to achieve even better rankings.

There are several incentives contributing to the overall business environment which are important when considering doing business in Montenegro (such as the tax system, labor market/human resources, market access and similar business preconditions).

“Montenegro’s economy is small but open, and focused on encouraging new businesses. It is recognized as an emerging economy with significant growth potential.


When presenting the opportunities for doing business in Montenegro, one should start with what is immediately evident – the strategic geographic location and natural potential of Montenegro. Being situated in South-East Europe in the Central Mediterranean area, Montenegro is certainly among the most interesting spots in the world. It has diverse climate features and diverse landscapes that offer so many different possibilities.
Investment potential has so far been identified within several sectors: tourism, energy, infrastructure and agriculture (with tourism and energy singled out as key sectors of growth in the past year).


Montenegro is predominantly a service-driven economy, with a significant portion of growth coming from tourism, as one of the main drivers of its development so far. But tourism is yet to reach its full potential and Montenegro is predicted to become one of the fastest growing tourist destinations in the next 10 years, according to the World Travel and Tourism Council. It has everything it needs to achieve that goal, such as diverse natural resources, unspoiled nature, beautiful beaches, a spectacular coastline and a central location in the Mediterranean. Montenegro was the first country in the world to be declared an ecological state in 1991. All this was recognized by several of our prominent members who have already made investments of hundreds of millions of euros and are planning on committing much more.

Up to this point, the coastal part of the country has been in the focus for development of tourism, enabling Montenegro to become one of the fastest growing tourist destinations in the world. This potential has certainly been recognized by our investors, members of the MFIC, who have already invested a large amount of money in greenfield and brownfield projects. Yet, there are still many outstanding opportunities for further development, especially in the area of yachting and cruiser tourism. There is a need to make a complete offer to tourists coming from cruisers and yachts and motivate them to choose to stay in Montenegro for a longer period of time.

Although the coast has so far proved to be the main driver of the country’s tourist industry, Montenegro’s interior has great investment opportunities which have still not been explored and the region is quite unknown. Four of the country’s five national parks are located in the interior. Also, there is a wide range of new tourist attractions to be discovered and developed in the northern region of Montenegro. The northern region represents the center for mountain tourism as it has several small ski resorts with huge development potential and areas of untouched nature. It has a diverse landscape with a combination of stunning lakes, deep river canyons and high mountain peaks which offer possibilities for adventure travel programs. Especially attractive for further investment is, for instance, Bjelasica with the potential for “soft” and “hard” adventure sports, wellness and MICE5 related activities, but also Durmitor and Žabljak, brimming with opportunities for nature-based and family tourism as well as a wide range of sporting activities. In order to capture all this potential, the still underdeveloped hotel capacities represent a lucrative investment opportunity.

The Government’s strategy for tourism development includes a wide range of quality accommodation (from luxury seaside resorts to mountain ecolodges) and various activities such as yachting and golf, as well as other adventure sports and less active sports. For example, the Government and potential investors have recently been able to identify golf tourism as a still undeveloped market segment, although there are some private golf courses in Montenegro.

The country’s topography lends itself to this sport with many suitable sites and a strong growth in demand, which is why it is open for projects in this area. One can easily notice Montenegro’s potential for becoming a golf destination. Construction of golf courses would attract visitors in the period prior to and after the summer tourist season.

A construction permit for building a golf course was issued to one of the MFIC members – Luštica Development (a company established as a joint initiative between Orascom Development Holding and the Government of Montenegro). Luštica Development is investing in the development of Luštica Bay, a highly sustainable and highly sociable coastal community, driven by the healthy lifestyle its location affords, which will, among its different facilities, now also offer a golf course. This is only an example of the openness of the market for such sports facilities. As stated many times before, the country already contains the resources necessary for a thriving tourist industry and one may expect that development in the area of tourism will certainly have a spill-over effect into the development of transport, trade, the energy sector, agriculture and construction.


Agriculture represents one of the pearls of Montenegrin economy, still underutilized. It accounts for around 8% of Montenegrin GDP. Based on official statistics, only 1.6% of all permanent employees in Montenegro work in agriculture, but, unofficial data suggest that the number is much higher, reaching around 30% of the total number of employees in the state. These people usually work on family farms and distribute their products at local markets. Covering a relatively small land area with different geographic locations and a different climate, Montenegro has a rather diversified production: growing olives and citrus fruits along the coast, to early season vegetables and tobacco in the central region and livestock breeding in the northern area.

As the first ecological state in the world (since 1991), Montenegro has the potential to grow in this area even further, given its unspoiled nature, clean water and unexhausted land resources. Organic agriculture is being developed, the number of organic food producers is constantly increasing. Producers need to follow strict standards represented in the Law on Organic Production, as well as other legal regulations, and gain special certification from the institution in charge. Organic agriculture represents a system of sustainable agriculture which is based on local resources and, as such, it minimizes negative effects on the environment. In this area there are many opportunities for investment in the production of unique and traditional products that could be marketed for consumption in tourism. There is already demand from both locals and tourists who come from all over the world for organic and healthy food originating from Montenegro. Therefore, agriculture represents a quite promising and rewarding sector for investment. The Montenegrin Ministry of Agriculture and Rural Development has initiated various projects to attract investors into the field of cultivation of medicinal herbs and milk and dairy products.

Montenegro is a country rich in various sources of drinking water, with great quality. At the moment there are seven facilities for the production of water in the country, but still, imports of drinking water are quite high, while exports of water are quite low. A small percentage of only 17% of the water resources in Montenegro is being used. Considering that water will become one of the most valuable liquids (even compared with oil) this is one of the sectors with the potential for great commercialization and monetization.


A sufficient energy supply is one of the main prerequisites for sustainable economic development. Over the last few years, the energy sector in Montenegro has been marked with significant progress. With the goal of achieving a non-discriminatory, competitive and open energy market, reforms in the energy sector have consisted of harmonization of the regulatory framework with the acquis communautaire and of gradual steps towards liberalization. The Montenegrin market for electrical energy is relatively small and so far there has been only one “vertical supplier” – the Electric Power Company of Montenegro (EPCG), which is at the same time the national supplier. Due to the fact that complete liberalization of the electrical energy market is expected to take place in the coming years, energy has become one of the most interesting sectors for foreign investors in Montenegro. Very soon citizens will be able to choose their supplier and this is an important precondition for establishing more energy supply companies in Montenegro.

Montenegro has great potential for the construction of small hydroelectric power plants and for use of alternative energy sources. Activities directed at creating necessary preconditions for the construction of small hydroelectric power plants are currently being implemented. The main parameter that defines a small hydroelectric power plant is the installed power, which by Montenegrin law must be 10 MW. In the construction of small hydroelectric power plants there are two basic parameters in defining their feasibility: hydrological data and distance and the condition of the power system. At the moment, in Montenegro concession contracts have been concluded on more than 20 watercourses.


Modern transport is necessary for sustainability in terms of economic, social and ecological aspects. In fact, the sustainable development concept shows the interdependence between the transportation infrastructure and other sectors with major investment opportunities in Montenegro (tourism, energy and agriculture). This means that the transportation infrastructure and its organization contribute to the effective usage of the economic potential of Montenegro. The long awaited construction of the Bar–Boljare highway, stretching 169.2 km, have started after finding a reliable partner, the China Road and Bridge Corporation (CRBC), a subsidiary of one of the largest and most respected companies in China, the China Communications Construction Company. The first part, the Smokovac-Uvac- Mateševo priority section will extend 41 km, with 45 bridges and viaducts and 32 tunnels, and it should be completed in four years’ time.

The highway will certainly contribute to connecting Montenegro with other countries in the region and Europe. More important, it is intended to connect the coastal and northern parts of the country and enable equal development of all regions of the country. It should enable exploitation of natural resources, development of tourism, better traffic connections and overall economic development.
The highway should connect the ports on the Adriatic coast with ports on the River Danube. It should be the shortest connection between Hungary and Romania to Italy and Albania, using roads through Serbia and Montenegro.
The transport sector in Montenegro is made up of a roughly 1,800 kmlong network of main roads and 250 km of railroads. There are two airports (in Podgorica and Tivat) and five ports for passengers and cargo transport with the Port of Bar being responsible for 95% of total passenger and freight transport. Some of the roads and airports are being rebuilt and modernized, which should contribute to better and safer utilization of the existing road infrastructure.


Only three documents are required in order to register a business: a founding decision; the bylaws; and the registration form for the particular type of company. Registration takes only four days and the Central Register of the Commercial Court is in charge of business registration. It has an electronic database of all registered business entities, contracts on financial leasing and pledges. Among the many steps taken by the Montenegrin Government, with the goal to stimulate and facilitate investment, is the launch of the one-stop- shop principle for company registration. New business entities can register a company, apply for general tax registration and obtain a VAT, excise and customs code all in one place. This means that it is not necessary to go to several different institutions, since everything can be done with the Central Register of the Commercial Court, which saves time and money. It is expected that in the coming period there will be another improvement to the implementation of the one-stop- shop principle with the possibility to register a company in one of eight regional units besides the Central Register of the Commercial Court (which has so far been the only place to provide this service). The goal of these reforms has been to simplify administrative procedures and remove business barriers.


According to Montenegrin law, it is possible to establish six types of companies:
  • Entrepreneur (minimum capital required: none, registration fee: €10)
  • Limited Liability Company (minimum capital required: €1, registration fee: €10)
  • Joint Stock Corporation (minimum capital required: €25,000 , registration fee: €50)
  • General Partnership (minimum capital required: none, registration fee: €10)
  • Limited Partnership (minimum capital required: none, registration fee: €10)
  • Part of a foreign company (minimum capital required: none, registration fee: €10)


The Law on the Courts of Montenegro follows universal values providing legal protection to all of those who would like to protect their rights and everyone is equal before the court. The legal system in Montenegro recognizes three levels of courts: the Basic, Higher and Supreme Courts.
There are 15 Basic Courts, providing basic legal protection in the areas of criminal and civil law. There are two Higher Courts, in Podgorica and Bijelo Polje, which decide on crimes where a prison sentence of more than 10 years is the main legal sanction and hears appeals against the decisions of the Basic Courts. They also have departments dedicated to resolving corruption, crimes, organized crime, terrorism and war crimes.

Within the jurisdiction of Commercial Court are disputes between legal entities, registration of legal entities, intellectual property rights, violation of the rules on competition, abuse of monopolistic and dominant positions, disputes related to maritime law and other legal matters which the law places within its jurisdiction.

The Administrative Court decides in administrative proceedings and performs other duties prescribed by law. The Appellate Court resolves the complaints of the Higher Court’s decisions, as well as decisions of the Commercial Court.

The Supreme Court is the final instance for resolving all legal disputes in Montenegro, including final complaints on the decisions of the lower courts and extraordinary legal remedies.

In the previous period the State of Montenegro has also worked on promoting alternative dispute resolutions, such as mediation and arbitration. The Parliament adopted the Law on Arbitration during 2015 with the purpose of reducing the huge number of court cases, which is very similar to the Law on Mediation. Unfortunately, the large number of disputes that come to the court shows that the awareness of alternative dispute resolutions is still quite low, but the positive thing is that it is increasing.


Personal Income Tax – 9% (11% for gross personal income above €720)
Corporate Income Tax – 9%
Value Added Tax – 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 auditing services
Social Security Contributions – 33.8%


The development of business zones represents a project of the Government of Montenegro which has the goal of stimulating business development and creating more attractive investment opportunities. A business zone represents a developed area in construction terms, which is fully equipped with utility infrastructure and directed at production activities and favorable conditions for investment.

The beneficiaries of business zones will have more encouraging work conditions in terms of lower costs and resolved infrastructural problems. Such benefits are intended for small and medium-sized enterprises engaged in light industries which do not harm the environment. These include industrial branches whose production is focused on the means of consumption (food, textiles, tobacco, furniture and electronics industries and the finishing and assembling of final products).

Business incentives offered by the zones are:
  • Developed land with all the necessary permits
  • Lower lease prices of business premises
  • Reduced administrative costs
  • Integration of complementary business activities
  • Other business incentives

Some municipalities have already recognized the importance of business zones and used the concept to make attractive business environments in order to attract foreign and domestic investors.

Average customs rate in Montenegro
The average customs rate on the import of goods amounts to 6.28% for countries with which Montenegro has not signed an agreement on free trade. Customs rates for countries with which Montenegro has signed an agreement on free trade change annually. Import duties are set by the Customs Tariff as part of the Customs Tariff Law, which is based on the Commodity Description and Coding System (HS System) and coordinated with the EU Combined Tariff.

Free trade agreements
Montenegro has signed several free trade agreements:
  • CEFTA (Central European Free Trade Agreement)
  • Free Trade Agreement with EFTA (European Free Trade Association) – signed in 2011
  • Free Trade Agreement with Russia –concluded in 2000
  • Preferential Trade Agreement with the European Union
  • Free Trade Agreement with Turkey – signed in 2008


Montenegro can be easily reached by plane. There are two airports (in Podgorica and Tivat) which offer many regular connections. Podgorica is the capital of Montenegro and it represents the political, economic, administrative and cultural center. The airport in Podgorica offers direct connections to: Frankfurt, Vienna, Rome, Ljubljana, Belgrade, Paris, Naples, Bari, Moscow, Zurich and London. Tivat is a coastal town in southwest Montenegro. With major tourism potential and investment projects in the area, the airport in Tivat has gained particular significance. It offers direct connections to: Belgrade, Moscow and Paris.
It is also possible to come to Montenegro by train, as railroad traffic is active between Bar and Belgrade and Bar and Subotica, but during the summer, there are direct lines from Prague to Bar, Moscow to Bar and Budapest to Bar.


Montenegrin coastal areas enjoy a Mediterranean climate with long, dry summers and short, mild winters, while a continental climate is predominant in the immediate hinterland where the winter is colder and the summer warmer than on the coast. Montenegro has on average 180 sunny days (its coastal town of Bar has as many as 270 sunny days on average per year) and a coastline of 293 km, of which 73 km are sandy beaches. The average air temperature is 27.7°C (during the summer) and the maximum sea temperature is 27.1°C.