Montenegro is certainly one of the most interesting spots in the world. Even though it only covers around 14,000 km2 and it only has about 650,000 citizens, its contribution to the World cultural heritage is impressive compared to its size. Montenegro is a Southern European and a Mediterranean country. Its landscape combination of mountains, deep valleys, natural ice lakes, sandy beaches and attractive islands is breathtaking.
Since regaining its independence in 2006, Montenegro has proved to be a safe, politically stable and economically viable state with the potential to grow rapidly. The country has signed the Stabilisation and Association Agreement with EU, has liberalised visa regime with the Schengen zone and become member of NATO’s MAP program.
Montenegro is rapidly changing and becoming the business platform of the Western Balkans. With many projects under way, consistent and strong economic development, euro as its currency, competitive labour costs, close proximity and access to South East European Market, emerging private universities and lifestyle advantages, Montenegro is already a new business and residential location. With over 80 percent in privatisation of the state enterprises, strong competition in telecommunication, gasoline import and distribution, transportation, with one private bank per 55,000 people and one university per 200,000 people, you can feel the upcoming dynamic of change. It is diverse, open, with its eyes on the future and better connected every day. At the same time country has low level of public debt (around 30 percent of GDP) and deficit (below four percent).
During the three-year period before the crisis, Montenegro recorded the fastest GDP growth in the region, with the average growth rate reaching nine percent. A key driver of economic growth was an influx of FDI. For five years in a row, the country has attracted increased FDI, becoming a leader in Europe according to the level of FDI per capita. Despite the global financial crisis in 2009 Montenegro recorded even higher level FDI than ever before (€1.07bn), with a somewhat changed structure of investors’ preferences compared with previous years and the energy sector attracting more interest.
This was possible due to the overall course of continuing economic reforms relying on: (i) openness, (ii) monetary stability, i.e. the euro as a legal tender, (iii) a low level of business regulation, (iv) a low level of taxation (with corporate income tax amounting to 9 percent, as well as personal income tax, while VAT rate amounts to 7 percent and 17 percent); (v) free regime of capital flows; (vi) a high level of the economy privatised or under the process of privatisation. In addition investors are able to remit dividend and interest profit in the full amount, without any restrictions.
All this has resulted in improvement of Montenegro’s position in various rating lists of relevant international institutions and organisations like the World Bank, World Economic Forum, Transparency International, Heritage and Fraser Foundation, etc. Growing economic freedom is becoming countries hallmark. Standard & Poors has given Montenegro a credit rating of BB+, confirming that Montenegro is a stable country with somewhat fragile economy, interdependent from various factors, but with strong motivation for further reforms in accessing the European Union.
Foreign investors in Montenegro are guaranteed national treatment by law. You can freely set up a new company, invest in it or buy an existing company or share of a company. Foreign persons can have property rights on movable or immovable assets and property, and have inheritance rights the same as a Montenegrin, as well as free transfer of assets and property to foreign or domestic legal and natural persons. There is no limit on the amount of investment capital. Foreign investors are allowed to invest in any industry and freely transfer all financial and other assets, including profits and dividends. All major national and international investment insurance companies insure investment projects in Montenegro.
Several important investment projects are recently completed, such as reconstruction of an icon of Montenegrin tourism – St. Stefan (now managed by Aman Resort), completion of the first phase of Porto Montenegro – the first marina for mega yachts in Mediterranean or development of the Lustica peninsula by Orascom.
Over 5,000 foreign companies from 86 countries are conducting their business in Montenegro and the number is growing from one year to the next. Their positive experience are resounding testimonials for the further attraction of new investors and further progress of Montenegro. Despite being a small country, Montenegro has a significant potential, opportunities and clear vision of future development. The confidence that is crucial for such development is already achieved and serves as a guarantor for the future investments.
Montenegrin Investment Promotion Agency (MIPA) is a promoter of investment projects. Among other things, MIPA assists investors in obtaining permits and licenses; helps investors in locating greenfield and brownfield site options according to their specific requirements; and also gives initiatives and supports cooperation with domestic supplier companies and other local partners. So far, MIPA has provided many one-stop-shop services for potential foreign investors.
Tourism: 13km long send beach with an unobstructed view of the Adriatic Sea, the islands Ada Bojana and Mamula, as well as spectacular hillsides of Jaz and Buljarica.
Energy: construction of four hydropower plants of a 740 MW on the River Moraca, Maoce coal mine with construction of 500 MW thermal power plant and exploration of the natural gas. After signing an agreement with the government of Italy for connection of the electricity networks of two countries through an undersea cable with 1,000 MW capacity energy sector is becoming more and more attractive.
Infrastructure: construction of two highways, reconstruction of the railroad, long-term concession of the Port of Bar and Airports, privatisation of Adriatic Shipyard Bijela and Montenegro Airlines.
Banking and Insurance: are opened for greenfield investments that can support overall economic development.
Industry: Plantaze 13 jul, the largest producer of wine in the Balkans; Tobacco Company with the network of retail stores and warehouses; industrial, service and warehousihng zones around capital Podgorica.
Dr Petar Ivanovic is CEO of the Montenegrin Investment Promotion Agency (MIPA). Tel: +382 20 203 140; Email: firstname.lastname@example.org. Find more resorts and info at www.mipa.co.me