Investment Guides: Montenegro

Montenegro real estate currently provides some of the best value in Europe. Montenegro is now widely recognized as one of the world's fastest growing tourist economies. Annual growth of up to 20% is forecast between 2005 and 2014. The value of Montenegrin property should triple if not quadruple, given this phenomenal growth in demand.More than 50% of all private capital now coming into play in Montenegro is being invested into the Real Estate sector and construction projects, both public and private in nature.According to the Frether Institute, Montenegro ties with Mexico at number 58 in its global level of economic freedoms. At the same time. Montenegro is considered by Transparence International as 84th among 180 countries in the world for the country’s relative lack of corruption.  To put this into perspective, Russia was ranked as number 147 on the same list! These very favorable indicators are explained by Montenegro’s status as a European Union candidate, with a potential to join the EU in 2008/2009.Montenegro has the lowest rates of inflation, unemployment and smallest budget deficit in the whole of the former Balkan states.  79.9% of capital held in Montenegro is private and the country now is ranked in 1st place in Europe in terms of foreign investments per capita. In 2007 alone, the influx of foreign direct capital investments into Montenegro exceeded €1 billion Euros. For the first half of 2008, the total sum of foreign investments was €913.90 million Euros (marked at a net level of  €311.50 million Euros). Investment analysts estimate that Montenegro will attract €5 billion by 2011 and €30 billion by 2030. Law of Concession speed up administrative procedures, enhance competitiveness and increase transparency in the field of awarding concessions and contracts. Current projects being considered as open to international bidders may be in excess of €300 million, and innovation in this area will help to create firm public procedures for awarding large infrastructure projects. Government of Montenegro is aggressively investing (€250mil.  so far) in the modernization and renovation of the country's airports, roads, border crossings and other key infrastructure stock. Russia, including Norway, Great Britain, Austria, Germany and Hungary, is one of the largest global-wide investors into the Montenegrin economy. Additionally, Germany is the biggest bilateral trade partners to Montenegro.

There are no restrictions on foreigners buying property, except for land, which can only be purchased by foreigners through a company. After a building is constructed, ownership can be transferred to individuals through a simple procedure.(When an investor chooses a property, as a rule, deposit of 10% of property price is paid to secure the transaction and the investor’s solicitor prepares Draft property purchase contract.)Roundtrip transaction costs, i.e., the total cost of buying and selling a property, are around 6% – 8.75% of the property value. The buyer pays the transfer tax of about 3%. The agent’s commission ranges from 3% to 5%, usually paid by the seller. The whole procedure taking just a couple of days. The transaction cost on newly built property is much higher because 17% VAT is levied instead of the transfer tax. Low utility payments.

The Coastal region, as far as property investment is concerned can be split into two: The Bay of Kotor and the open coastal region from Budva to Ulcinj at the very end. The country's Ministry of Tourism and Environment Protection in 2001 unveiled the Tourism Master Plan, a blueprint for all tourism planning and targets up to 2020.