Why Montenegro is the new "pearl" for investors?

Author of the article:

Ilya

Montenegro real estate specialist

Date:  07.09.2024

Updated: 10/14/2024

Reading time: 11 min.

Views:  1,244

Montenegro is not just a beautiful country with stunning landscapes and warm climate. In recent years, it has become a real "pearl" for international investors, attracting attention with its economic potential and favorable conditions for doing business. If you are thinking about buying real estate, here are a few reasons why Montenegro is the place to invest your money:

• Economic stability and support from the EU.
• Attractive laws for foreign investors.
• The rapid growth of the tourism sector and its impact on the rental market.
• Low taxes and no property tax in some neighborhoods.
• Ease of acquiring real estate and the ability to obtain citizenship through investment.

Let's take a closer look at what makes Montenegro such an attractive real estate investment destination.

Economic advantages of investing in Montenegro

When I first visited Montenegro, I was struck not only by its beauty, but also by the economic potential it offers. The country is actively developing, and the support from the European Union only strengthens this process. In fact, Montenegro is striving for integration with the EU, which opens up new opportunities for investors. For example, in recent years, many international projects aimed at improving infrastructure have been implemented, which certainly has a positive impact on economic growth.

Tax advantages

Speaking of taxes, it is worth noting that Montenegro offers some of the most attractive conditions for foreign investors. In some regions there is no real estate tax, and the income tax rate is only 9%. By comparison, in most European countries this rate ranges from 20% to 30%. This means that you can not only buy real estate profitably, but also receive rental income without worrying about high tax deductions.

• Income tax: 9%
• Real estate tax: not available in some regions
• Capital gains tax: 20% when you sell the property, but only if you have owned it for less than 10 years

Personally, I know several investors who have already managed to appreciate these advantages and are happy with their investments. For example, one of them purchased apartment in Budva for $120,000 and now gets about $1,200 a month from rent. This not only covers his expenses, but also brings in a steady income.

Foreign direct investment

Now let's talk about the impact of foreign direct investment on the real estate market. Montenegro is open to foreign investors, and this is already bearing fruit. The real estate market is growing rapidly, and many areas that were previously considered "dormant" are starting to attract attention. For example, the Bay of Kotor has become a real "slow" gem, where housing prices are rising every year.

• Bay of Kotor: the average cost of an apartment is $100,000 to $300,000, depending on location and condition.
• BudvaHome prices range from 150,000 to 500,000 USD, depending on proximity to the sea and infrastructure.

I remember an acquaintance of mine bought an apartment there for only 100,000 Euros (about 110,000 USD) and two years later its value had increased by almost 30%! Isn't that a great example of how investments can be profitable?

Strategic projects and infrastructure

In addition, Montenegro is actively implementing strategic projects that contribute to economic growth. For example, the construction of new roads, airports and tourist facilities attracts not only tourists, but also investors. This creates additional jobs and raises the standard of living of the local population.

• New airports: expansion of Tivat Airport, which increases the number of international flights.
• Infrastructure projects: construction of new roads, which improves access to tourist destinations.

Thus, Montenegro becomes not only an attractive vacation destination, but also a profitable investment destination. If you are looking for real estate investment opportunities, this could be your chance for a successful future!

Legal aspects of buying real estate in Montenegro

Now let's deal with the legal aspects. One of the main advantages is the ease of acquisition of real estate by foreigners. Unlike many other countries, where there are strict restrictions, in Montenegro there are minimal barriers for foreign investors. This means that you can safely buy an apartment or a house without worrying about bureaucratic complications.

The real estate purchase process

Purchasing process real estate in Montenegro involves several steps:

1. Object selection: First you need to choose a suitable property. It can be an apartment in Budva, a house in the Bay of Kotor or a plot of land in Podgorica. Housing prices vary depending on the location and type of property. For example, apartments in Budva can cost from 100,000 to 500,000 USD, depending on the proximity to the sea and the condition of the property.
2. Conclusion of a preliminary contract: After choosing a property, you sign a preliminary contract with the seller. At this stage you usually pay a deposit, which is about 10% of the price of the property.
3. Document verification: It is recommended to hire a lawyer to check all the documents on the property to make sure there are no encumbrances or debts.
4. Signing of the main contract: After the documents have been verified, you sign the main sales contract and the remaining balance is transferred.
5. Registration of ownership: The last step is to register your title at the land registry. This process usually takes several weeks.

Citizenship by investment programs

In addition, Montenegro offers interesting programs to obtain citizenship through investment. If you decide to purchase real estate worth €250,000 or more (approximately $275,000) in certain regions, you can qualify for residence permit status and then citizenship. This opens the door to not only living in this beautiful country, but also the ability to travel throughout Europe without visas. I know several people who took advantage of this program and are now enjoying life on the Adriatic coast.

Taxation on ownership and sale of real estate

Don't forget to also pay attention to the peculiarities of taxation when owning and selling real estate. For example, if you decide to sell your apartment, the income tax will be only 20%. This is significantly lower than in most European countries, which makes Montenegro even more attractive for investors.

It is also worth noting that you will not have to pay property tax when owning real estate, which is another plus for foreign investors. However, if you plan to rent out your property, you will have to pay tax on rental income, which is 9%.

Tourism attractiveness of Montenegro

I cannot fail to mention the tourist appeal of Montenegro. This country is becoming more and more popular among tourists, and this certainly affects the real estate rental market. Montenegro is famous for its stunning beaches, ski resorts and picturesque cities such as Budva, Kotor and Tivat. Millions of tourists come here every year, which creates a huge demand for rental properties.

Beautiful beaches and resorts

Montenegro boasts more than 290 kilometers of Adriatic coastline, home to famous beaches such as Slavianski Beach in Budva and Jaz Beach. These places attract both local and international tourists, especially during the summer months. For example, renting a one-bedroom apartment in Budva during peak season can cost between $80 and $150 per night, depending on location and amenities. This creates excellent opportunities for investors who want to make money from renting their properties.

Ski resorts

But Montenegro is not only about summer resorts. In winter, tourists also flock to the mountains to enjoy ski resorts such as Zabljak and Kolasin. These places offer excellent skiing and snowboarding conditions, which attracts winter sports enthusiasts. For example, the cost of renting a cabin in Kolasin during the winter season can range from 100 to 200 USD per day. This creates an additional flow of renters throughout the year.

Picturesque cities and cultural attractions

Cities such as Kotor and Tivat are also becoming increasingly popular with tourists due to their rich history and culture. Kotor, for example, is known for its narrow streets and medieval architecture, making it an ideal place to stroll around and explore the local culture. In Tivat, which is famous for its Porto Montenegro yacht port, renting an apartment can cost between 100 and 250 USD per night, depending on the season and location.

Demand for rental real estate

Personally, I was in Budva during peak season and was amazed at the number of people looking for apartments and vacation homes. This creates a great opportunity for investors who want to make money from renting their properties. I know that many apartment owners in the area make a steady income by renting their properties to tourists. For example, some investors who have purchased real estate in Budva, report rental yields of 15-20% per annum, making real estate investments particularly attractive.

Prospects for real estate market growth

Now let's delve deeper into the growth prospects of the real estate market in Montenegro. If you are looking for areas for investment, you should pay attention to places like the Bay of Kotor, Budva and Podgorica. These cities are not only attracting tourists, but are also becoming centers for living and business. For example, the Bay of Kotor, with its picturesque landscapes and historical architecture, has become a real magnet for foreign investors. I remember how one of my acquaintances bought a small house there with a sea view, and its value has already increased by 40% in two years!

Another interesting aspect is the development of new construction projects. In recent years, Montenegro has seen a growing interest in innovative architectural solutions and "green building". Many companies are starting to build eco-friendly houses that are not only beautiful but also energy efficient. This not only attracts buyers, but also creates a positive image for the country as a whole. I have seen several such projects in Budva and they are really impressive!

Market development forecasts for the coming years also look promising. Experts expect that prices for accommodation in Montenegro will continue to grow, especially in popular tourist areas. If you are thinking of buying real estate, now is a great time to invest. I know that many investors have already started acting, and for good reason - they are confident that their investments will pay excellent dividends in the future.

Infrastructure and its impact on the real estate market

Infrastructure development is another key factor that affects the real estate market in Montenegro. The country is actively working on improving the transportation network, and this is already bearing fruit. New airports, such as Tivat Airport, are significantly increasing the number of international flights, making Montenegro more accessible to tourists and investors. I remember how last year I managed to quickly get from Podgorica to Tivat in just 30 minutes by car, and this was possible thanks to the new road.

In addition, Montenegro plans to develop ports and sea routes, which will also improve communication with other European countries. This will create additional business opportunities and attract investments. I know that many investors have already started to consider Montenegro as a strategic location for their projects, and this is just the beginning.

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The impact of new infrastructure projects on real estate prices cannot be ignored either. With every new project that is launched, housing prices in the neighborhoods start to rise. I saw how after the opening of a new shopping center in Budva, the price of apartments within a 1-2 kilometer radius increased by 15%. This is a great example of how infrastructure can affect the real estate market.

Conclusion

Montenegro continues to attract investors from all over the world due to its economic stability, attractive conditions for foreign investors and growing tourism sector. If you are looking to make a profitable real estate investment, this country offers many opportunities. Don't miss the chance to be part of this exciting market!

If you have any questions or want to know more about buying real estate in Montenegro, don't hesitate to contact us. We are happy to help you find the perfect property and make your investment journey as comfortable as possible.