Montenegro - Country Commercial Guide
Investment Climate Statement (ICS)

The Investment Climate Statement Chapter of the CCG is provided by the State Department. 

Last published date: 2021-10-06

The U.S. Department of State’s Investment Climate Statements, prepared annually by U.S. embassies and diplomatic missions abroad, provide country-specific information and assessments of the investment climate in foreign markets.  Topics include: market barriers, business risk, legal and regulatory system, dispute resolution, corruption, political violence, labor issues, and intellectual property rights.  To access the ICS for Montenegro, visit the U.S. Department of Department of State’s Investment Climate Statement website 


Executive Summary

Since regaining its independence in 2006, Montenegro has adopted a legal framework that encourages privatization, employment, and exports.  Implementation, however, lags well behind the legal structure, and the Montenegrin economy continues to flounder on a very narrow tax base and a band of three developing sectors: tourism, energy, and to a lesser extent, agriculture.  Montenegro has one of the highest public debt to GDP ratios in the region, currently above 80 percent. One of the government’s priorities is to continue to develop infrastructure, including the second section of the country’s first highway that will better connect the developed southern part of the country with the relatively underdeveloped north. Although Montenegro’s economic growth rate in 2019 was one of the highest in Europe at 3.5 percent, the pandemic negatively affected Montenegro more than any other country in the region, causing GDP to decline approximately 15 percent. The unemployment rate increased from 15.3 in 2019 to 20 percent.  In August 2020, Montenegrins took to the polls and elected an opposition coalition, unseating the ruling Democratic Party of Socialists for the first time in 29 years.  In December 2020, the Ministry of Finance issued a EUR 750 million bond on international markets to service maturing debt. At the end of 2020, the new government exercised its legal option to continue government operations under a temporary budget and postpone the budget proposal until March 2021.

As a candidate country on its path to joining the European Union (EU), Montenegro is making steady progress.  All 33 chapters have been opened and three chapters have been provisionally closed.  Despite regulatory improvements, corruption remains a significant concern. Montenegro joined NATO in June 2017.

Montenegro’s economy is centered on three sectors, with the government largely focusing its efforts on developing tourism, energy, and agriculture. Due in large part to its 300 km-long coastline and a spectacular mountainous region in the country’s north, the thriving tourism sector accounts for almost 25 percent of GDP.  No one source country dominates foreign direct investments to Montenegro, although the most significant investments have come from Italy, Hungary, China, Russia, and Serbia, with investments also coming from the United Arab Emirates, Azerbaijan, Turkey and the U.S.  Economic statistics from the Central Bank of Montenegro (CBCG) show that direct foreign investments during 2020 amounted to €663 million, with the highest level of foreign investments coming from NATO member countries (€230 million), while Russia and China together invested €170 million. In the energy sector, the government began operation of its underwater electric transmission cable to Italy in December 2019. Additionally, there are several ongoing conventional energy projects around the country, including the controversial ecological reconstruction of the existing block of the coal-fired thermal plant in Pljevlja in partnership with China’s Dongfang Electric Corporation. The Montenegrin government has signed concession agreements with two consortiums: the Italian-Russian consortium Eni/Novatek for four blocks and the Greek-British consortium Energean/Mediterranean oil and gas for one block. Offshore exploratory drilling started in March 2021.

The Government sees as one of its priorities further development of the digital economy, although it has made only moderate progress to date.