Economic Overview & Business Opportunities
Montenegro, one of the Southeast European countries, borders Bosnia, Herzegovina, Serbia, Kosovoto, Albania, and Croatia. Spanning over 13,452 square kilometres of land and 360 square kilometres of water, Montenegro is the world’s 163rd largest country which is also home to a population of approximately 0.6 million people. Situated in South-East Europe in the Central Mediterranean area, Montenegro’s strategic location has given it an edge as one of the interesting spots in the world due to its diverse climate features and landscapes that open up the Pandora of possibilities.
An Overview of Montenegro’s Economy
Montenegro’s economy is the world’s 92nd freest in the 2019 Index with the economic freedom score of 60.5. In terms of ease of doing business index, Montenegro ranked 50 out of 190 economies, according to the latest World Bank ratings. Montenegro is the member of the World Bank, IMF, WTO and NATO, and is currently a candidate country to joining the European Union (EU). Since its independence in 2006, Montenegro has an investment framework in place to facilitate economic growth, create employment opportunity, and boost exports in the country. Montenegro’s economic performance has seen monumental improvement with the adoption of the Euro as the legal tender and investment in the infrastructure like tourism, energy, water and transport links.
Many foreign investors favour Montenegro as their investment destination due to the following reasons: favourable tax regime with the low corporate tax rate at 9%, a business-friendly economy, economic freedom, and a stable currency (Euro). In Montenegro, foreign companies can have 100% ownership of a local company, and foreign companies can repatriate profits and dividends without limitations or restrictions.
Why Invest In Montenegro
On top of the economic and political stability, Montenegro’s economy has seen monumental growth due to its vibrant tourism industry. It is one of the attractive tourist destinations due to its well-preserved natural beauty. The growing tourism industry is not only the major driver of economic growth; it has also propelled investments in other sectors of the economy. The World Travel & Tourism Council and Oxford Economics (2014) has predicted that Montenegro’s economy will thrive due to the rapidly-growing travel and tourism economy in the world over the next decade, outpacing Brazil, Russia, India and China.
Montenegro’s appealing taxation system is another factor that attracts foreign investors. Montenegro’s corporate tax is levied based on tax residency. The 9% corporate tax rate is one of the lowest in Europe, while the withholding taxes (applied to dividend and interest payments) are also fixed at a rate of 9%. Meanwhile, the real estate taxes in Montenegro – 0.1% to 5% depending on the value of the property, are the lowest real estate tax in Europe.
In 2018, Montenegro’s government rolled out the Citizenship by Investment Scheme to help both the country’s economy but also those keen in doing businesses. Montenegro economic citizenship program enables foreign investors to secure the citizenship of Montenegro at the discretion of the Ministry of Interior Affairs and Public Administration via a designated investment.
Strived to become the business hub of Southeast Europe, Montenegro has been proactive in attracting foreign investors into the country. Montenegro’s competitive business environment has offered many rewarding investment opportunities and vibrant business climate that attract foreign investors. If you are looking for an investment destination in Southeast Europe, Montenegro has a lot to offer.
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