Montenegro: Investing in Montenegro
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 664 million in 2021, up by 25.5% y-o-y and above the pre-COVID level. The stock of FDI was estimated at USD 6.3 billion in 2021 (around 109.4% of GDP – data UNCTAD - 2022 World Investment Report), 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, net FDI inflows to the country grew to USD 623 million in the first three quarters of 2022, up by 70% compared to the same period one year earlier.
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 a foreign investment screening. Nevertheless, corruption, the politicisation of justice, organised crime, an approximate and unreliable land registry and a 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. Montenegro ranks 65th out of 180 economies on the 2022 Corruption Perception Index and 77th out of 176 on the 2023 Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Stock (million USD) | 5,819 | 5,360 | 5,681 |
Number of Greenfield Investments* | 5 | 3 | 9 |
Value of Greenfield Investments (million USD) | 872 | 104 | 127 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Montenegro | Eastern Europe & Central Asia | United States | Germany |
Index of Transaction Transparency* | 5.0 | 7.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 8.0 | 5.0 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 6.0 | 6.8 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
To learn more you can visit the MIA website, the government agency dedicated to investment promotion.
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Latest Update: November 2023