Montenegro has the potential to become a magnet for investment because of its business-focused economic system. It enjoys great economic freedom and monetary stability.
The Government's privatization policy has attracted many foreign investors. In addition, there is a real equal treatment between Montenegrin and foreign investors in the country. The government has established customs and fiscal incentive measures:
- the amount of tax can be reduced up to 25% of the amount invested in shares and bonds for the fiscal period concerned.
- legal entities newly established in a municipality and who are active in the field of production can be be exempted from tax on profits during their first three years of activity.
Montenegro ranks 51st out of 190 economies (a downgrade from 48th place in 2016) in terms of ease of doing business, according to the 2017 World Bank Doing Business Report.
The sectors attracting most of the FDI are tourism, real estate, energy, telecommunications, banking sector and construction. The main investing countries are Switzerland, Norway, Austria, Russia, Egypr and Italy.
Country attracts a lot of foreign investors for the following reasons:
- foreign companies have the same rights as national companies;
- the tax system is one of the most competitive in Europe;
- the workforce is qualified and wages are relatively low;
- the Euro is the national currency;
- formalities for creating a company are simple and quick;
- it is a stable democratic NATO country.
Weak points are:
- Deficit of the balance of current transactions;
- Considerable foreign debt.