October 18, 2019

Montenegro made it easy for foreigners to purchase a property

Montenegro is one of the most perspective Balkan countries for investments in property, and its government made it easy for foreign citizens to buy real estate. However, foreign citizens cannot purchase natural resources, agricultural land, and the land of general importance.

The process of buying property in Montenegro is very simple and straight forward. All real estate contracts are drawn at Notary Public office in the municipality where the property is located. Once the contract is signed the next stop is Tax office.

The certified contract first should be submitted to the Tax Administration for the purpose of paying the tax for the purchased real estate, which is 3% of the estimated value. This tax rate is the same for foreign citizens as for Montenegrin citizens. The sales tax should be paid within 15 days of the issuance of the decision, after which the interest payment is made for each day of delays. The next step is to visit the Real Estate Administration office.

A certified copy of the contract is submitted to the Real Estate Administration for registration of ownership in the name of the buyer (Title). The legal deadline for enrolment is 60 days. After that, the buyer receives an official statement whereby he is confirmed that he is the owner of the purchased real estate and after the legal deadline for a complaint of 15 days, a change with his name is transferred to the real estate list (Title). The buyer after registration in the real estate list, which is a valid document, has evidence of property ownership.

Foreign citizens can buy an apartment, business premises and a house with a plot of up to 5.000m2, which is located on one cadastral parcel and have the title issued.

If a foreign citizen wants to buy land (plot for investment), he must open a company in Montenegro in order to purchase the land on behalf of his company. Just a note, same as the process of buying property is simple so is registering a company.

In Montenegro, in the fourth quarter of 2018, the average price per square meter of the apartment in the new building amounted to  1,098€ per square meter, up by 1.8% compared to the same quarter of 2017, while it was 4.5% lower than in the third quarter 2018.

The average price of a square meter of an apartment in the new building in Podgorica (capital city of Montenegro) in the observed period amounted to 1,047€, in the coastal region 1,334€, in the central region 580€, and in the northern region 743€.

Prices of investment properties vary, depending on the location. Large plots can be found at the starting price as low as 3€ per m2 but the top price line is not defined.

The hottest locations currently are on the Adriatic coast where the prices are much higher, from Ulcinj to Herceg Novi. Other hot locations which caught the eye of many investors are northern parts of Montenegro, and those are towns of Kolasin and Zabljak. Both towns are very frequent tourist spots with ski centers and have many opportunities for business development.

Who can be an investor in Montenegro?

A foreign investor may be a foreign person or business with a head office abroad, a company in which the share of foreign capital is greater than 25%, a Montenegrin citizen with a residence or temporary residence abroad for more than a year and a company founded by a foreign person in Montenegro.

A foreign investor can establish a company (either alone or with other investors), invest in companies, buy a company or part thereof, and establish a part of a foreign company. A foreign investor pays the same taxes as domestic.

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