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As the government aims to establish Montenegro as an elite tourism destination, attractive prices and high yields lure investors to this Mediterranean country.

December 2015

Set in the heart of Eastern Europe, bordered by Croatia and Bosnia Herzegovina to the North, Serbia to the East and Albania to the South, the small country of Montenegro has a population of just over 620,000 inhabitants.

Despite its small size however, in recent years, the country has increasingly moved into investors’ radars. According to data from the Ministry of Sustainable Development and Tourism of Montenegro, total FDI inflow as risen from just EUR 10 million in 2000 to a total of 4.8 billion for the period between 2007-2014, with 2009 showing the highest volume of FDI inflow to date with EUR 1.22 billion.

Until 2014, Russians have been the biggest investors in Montenegro. However, with the devaluation of the Ruble and changing national politics in Montenegro, this has changed. Kieran Kelleher, MD of Savills associate Dream Estates Montenegro says that whereas in 2013, Russians made up 95% of their buyers, today the number is less than 50% with the balance being made up by returning Western European buyers and interest from the Middle East.

Attraction points

Whilst still an emerging destination for leisure property, “Montenegro is slowly becoming a very desirable destination for high-end buyers,” says Savills, adding that the country fits with the firm’s longer term view on the “growing appeal for the authentic.”

Market attraction points include and open market, political stability, EU candidacy status and ambitions to join NATO as well as its currency, the Euro.

In addition to this, Montenegro possesses beautiful nature and lots of history. Kotor Old Town, for example, is a UNESCO World Heritage Site and “offers prospective investors historic property with income potential,” says Savills.

There are also several fiscal and other incentives for foreign investors such as a VAT of 0% for all products and services for the construction and equipment of 5 star hotels, reduction of real estate tax by 30-70% for 4+ star hospitality facilities which operate year-round, and a temporary residence permit in association with the purchase of real estate which will help raise more interest in buying property in Montenegro.


Montenegro boasts a stunning Mediterranean coast which attracts wealthy clientele many of whom make this country their summer yachting destination.

In fact, attracting investment in high-end tourism is one of the Montenegro government’s biggest aims. As mentioned above, there are significant tax reliefs for investors looking at the delivery of 4 and 5 star properties to be operated as hotels or as leaseback property, says Kelleher.

In 2013, Montenegro has been ranked the first among 184 countries by the World Travel & Tourism Council with regards to its forecasted speed of growth in 2014 as well as according to its long term growth forecast. Direct contribution of travel and tourism to GDP stood at 9.8% of total GDP in 2013, and is growing at an annual rate of 8.6%, with an estimated share of 17.7% in 2024. In 2013, 28% of total investments were in the travel and tourism industry and are estimated to constitute a share of 52.3% in 2024.

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