Montenegro does not have a foreign investment screening regime comparable to those emerging now in European Union in light of the EU FDI Screening Regulation. It operates a sector-specific authorisation system covering the defence sector.
The Foreign Investments Act (Official Gazette of Montenegro, nos. 18/11, 45/14 and 73/19) and the Guidance on the content and the manner of submitting information on foreign investments (Official Gazette of Montenegro, no. 19/14).
A foreign investment is defined by the Foreign Investments Act as an investment in-cash, in-kind, services, property rights and securities (with in cash and in-kind investments qualified as such in accordance with Montenegrin accounting rules). The Foreign Investments Act explicitly provides that a foreign investor can:
- establish a company (solely or with other investors);
- establish a branch of a foreign company;
- acquire shares and stock in a Montenegrin company; and
- acquire a Montenegrin company.
In addition, the Foreign Investments Act foresees that a foreign investment can be made based on concession agreements, franchising agreements, financial leasing agreements and real estate purchase agreements, as well as other agreements in accordance with applicable laws.
A foreign investment is subject to screening and approval only if it concerns an investment into or the incorporation of a company active in the production and trade of arms and military equipment.
Production and trade of arms and military equipment.
Process and timetable
Competent authority: Ministry of Economic Development, Ministry of Defence and Ministry of the Interior.
Mandatory filing requirement: Yes
Filing deadline: There is no deadline prescribed for the foreign investor to make a filing.
Responsibility for filing: The foreign investor is obliged to notify a foreign investment and procure approval for it.
Sanctions: There are no prescribed sanctions under the current framework applicable to foreign investments in the field of production and trade of arms and military equipment. However, approval is mandatory when the conditions are met and closing must be suspended until approval is obtained. Moreover, a Montenegrin company engaged in the production and trade of arms and military equipment cannot negotiate a foreign investment in any of the forms described above before obtaining approval from the Ministry of Economic Development.
Length of the proceedings: There is no deadline prescribed for the Ministry of Economic Development to carry out its review and issue a decision.
By Danijel Stevanovic, Partner at Moravcevic Vojnovic i Partneri in cooperation with Schoenherr