The U.S. Department of State’s Investment Climate Statements help U.S. companies make informed business decisions by providing up-to-date information on the investment climates of more than 170 countries and economies. They are prepared by our embassies and consulates around the world and analyze each economy’s openness to foreign investment. Topics include:

• Openness to, and Restrictions upon, Foreign Investment,

• Investment and Taxation Treaties,

• Legal Regime,

• Industrial Policies,

• Protection of Property Rights,

• Financial Sector,

• State-owned Enterprises,

• Corruption,

• Labor Policies and Practices,

• Political and Security Environment, and

• U.S. International Development Finance Corporation (DFC) and Other Investment Insurance or Development Finance Programs

Each statement provides a starting point for U.S. firms and offers a point of contact at the relevant U.S. embassy or consulate abroad.

These reports are also a resource for foreign governments to create business environments that ensure fair treatment for the United States and our companies and investors. 

To access the full Investment Climate Statement, visit the U.S. Department of State Investment Climate Statements website.

Executive Summary - Montenegro

As a NATO member state and front runner for EU accession, Montenegro plays a pivotal role in a contested region on the EU’s doorstep, while remaining susceptible to foreign malign influence. In April 2023, voters elected a political newcomer in the country’s presidential election runoff, ending the 32-year rule of Europe’s longest-serving leader. Later that year, a new governing coalition emerged, comprising both moderate and radical pro-Serb and pro-Russian parties as well as other ethnic minority parties, ending nearly three years of political deadlock. Montenegro’s current government is the largest in the country’s history with 32 total members in the cabinet spread across 24 ministries and representing eight political parties. The government’s size and diversity pose challenges for investments that cross ministerial lines of responsibility and require collaboration across political parties. Progress on complicated investments may necessitate approval from the Prime Minister to move forward.

Montenegro continues to offer a stable, liberal, and euro-based economy with full capital mobility, no restrictions on foreign ownership, and a government firmly committed to advancing reforms aligned with European Union standards. The government has set an ambitious target of joining the EU by 2028, a goal that continues to shape its economic, legal, and institutional reform agenda. Montenegro has provisionally closed six of 33 EU accession negotiating chapters, including three in December 2024:

• Intellectual Property Law,
• Information Society and Media, and
• Enterprise and Industrial Policy.
   

The Montenegrin economy expanded by 3.2 percent in 2024. The government has demonstrated notable fiscal discipline, reducing its public debt from 105 percent of GDP in 2020 to 61.3 percent in 2024.

Montenegro’s economy is centered around tourism, energy, and to a lesser extent, agriculture. The tourism sector officially accounts for approximately 25 percent of GDP, though some estimates suggest it exceeds one-third when the informal economy is included. The government has identified strategic investment opportunities in all three sectors and continues to prioritize infrastructure development, including plans to build two new highways and multiple expressways by 2030.

In the energy sector, Montenegro is working to increase its reliance on renewable energy, including the reconstruction of the Pljevlja coal-fired power plant, in partnership with China, to reduce its hazardous emissions. The undersea electricity cable to Italy, completed in 2019, positions Montenegro as a regional energy exporter for over three gigawatts of planned solar power projects. A second cable to Italy is under consideration, pending completion of the Trans Balkan Electricity Corridor, which is currently stalled in expropriation disputes.

Foreign direct investment (FDI) in Montenegro in 2024 totaled €890 million, up from €857 in 2023. More than half of all FDI (€455 million) went to the real estate sector. Investment by country included:

• Serbia provided (€118.2 million),
• Russia (€100.1 million),
• Turkey (€99.6 million),
• Germany (€69.5 million),
• Switzerland (€65.6 million), and
• United States (€55.5 million).

In 2022, Montenegro began implementing a wide-ranging economic reform program known as Europe Now, which:

• eliminated all individual health care contributions,
• almost doubled the minimum wage, and
• introduced a system of progressive taxation.
   

The government passed a second set of policies known as “Europe Now 2” in 2024, which included changes to value-added tax (VAT), excise duties, and corporate tax to ease burdens on businesses, while boosting salaries by reducing individual contributions to the Pension and Disability Insurance Fund. To offset lower taxes and social contributions, the program introduced a uniform VAT rate of 15 percent for accommodation and food services.

While the business environment is generally favorable, investors should be aware of ongoing challenges related to judicial efficiency and regulatory transparency. The government’s commitment to EU integration and structural reforms aims to address these issues, further improving the investment climate. However, investors should engage knowledgeable local advisors to stay abreast of local dynamics that could impact long-term investments. As a cautionary example, a mining concession issued by a previous government was overturned by a more recent government, precipitating an ongoing international lawsuit.

Click here to view the full Montenegro Investment Climate Statement