Real Estate

Investment Migration – A successful case study from Montenegro


Miodrag Spahić - Nov 30, 2022

7 min

Investment migration has enabled sovereign states, such as Montenegro, to tap into a new source of sustainable revenue. In the business environment following the pandemic, as in the wake of previous disruptions such as the 2008 financial crisis, residence and citizenship programs create significant value both for investors and for sovereign states in need of alternative revenue streams. Montenegro has successfully operated a Citizenship by Investment program since 2019 and, if logic prevails, will continue until a total of 2,000 applications have been successfully accepted.

In this article for The Collection Magazine, we explain the success of the Montenegro program and the enormous benefits it has brought to this small Balkan nation.

The current program allows applicants to invest in approved real estate projects in the north of the country and on the coast. In total, to date, 1,000 applications were submitted in the scope of the program. The table shows the concrete economic benefits that the Montenegrin economy would achieve if the program is continued until 2000 successful applications have been received. Since the beginning of 2022, a fee of EUR200,000 is paid to the Montenegrin Government by applicants. The average investment per applicant is EUR350,000. The administrative fee for processing one application is on average EUR35,000. These are the parameters on which the calculation is based on the potential success of the program.

The total effect of the applications submitted so far amounts to EUR 320 million, which is an extremely significant income and shows the potential of the program. If the full, initially planned potential of the program is realized, with 2,000 originally set applications, a realistic estimate is that the program can generate close to EUR 1 billion of investments and revenues in a relatively short period of duration of this program.

According to the current projections of the listed projects, and new recently proposed projects, 1200 hotel rooms are planned in new hotels in the north of Montenegro and 800 hotel rooms in the south. According to the reports of the globally recognised, renowned consulting company Horwath HTL, one room in a 4*+ and 5* level hotel contributes over EUR 50 thousand year to the country’s GDP, and employs 1.3 workers on an average. According to this, already in the next couple of years, these 2,000 accommodation units in hotels would contribute to the employment of 2,600 hotel workers, and contribute more than EUR 100 million per year to the country’s GDP.

Skadar Lake – just one example of the postcard perfect beauty of Montenegro

Who the applicants are and how they are checked?

Individual applicants successful to date are business owners and entrepreneurs, followed by financial experts, IT experts and specialists, such as doctors. There are renowned names from the IT world, the beauty and fashion industry and bankers. Applicants have chosen Montenegro as a destination for alternative citizenship, after analyses that in some cases took several years. The basic criteria for applying is always the same and extremely strict. First of all, it is necessary to obtain, and legalize in the prescribed manner, a whole set of documents, including police certificates, exhaustive financial statements, and evidence of investments in Montenegro. After the licensed agent submits an application, the main part of the process begins. As part of the government’s internal procedure, an official procedure for checking the international eligibility of the candidate (comprehensive due diligence) is carried out. On behalf of the government, this is done by world-renowned companies, specialized in this field: Exiger from Canada and S-RM from Great Britain, licensed in Montenegro for the Program. This in-depth analysis lasts at least one month, and if the findings are negative, the application is automatically rejected, without the right of complaint. If the finding is satisfactory, only then the application qualifies to be reviewed by the competent state authorities, headed by the Ministry of Internal Affairs of Montenegro.

Boka Bay Montenegro — the five-star fjord

After the due diligence is completed, and only in case the findings do not constitute a rejection of the application, final checks are carried out by the Ministry of Internal Affairs, in cooperation with the National Security Agency. In addition, the state naturally reserves the discretionary right to revoke the passport of the applicant, in case it is proven that he/she submitted an incorrect document during the process, or did not behave in accordance with the law after obtaining citizenship. These unique processes and analyses, never before implemented in Montenegro, are carried out to such a high level by a number of companies and institutions specialised in this field, specifically with the aim of credibility, so that the applicants under the Montenegrin CBI Program are, in fact, the most verified people in Montenegro.

While significant focus must be placed on the investor side of the industry, consideration must also be given to the sovereign side of the equation. Investment migration programs bring billions of euros’ worth of much-needed capital to sovereign states that would otherwise have to be raised through taxation or increased sovereign debt and budget deficits. There are multiple objective sources that demonstrate not only the value of the liquidity injection itself, but the wider benefits in terms of driving foreign direct investment (FDI) into EU nations like Malta, Greece, Latvia, Spain, or Portugal. These programs create genuine societal advantage not just through increased government revenue, employment creation and enhanced infrastructure spending, but through the generation of new opportunities across all levels of society.

Mount Lovćen — the heart of Montenegro

To put citizenship by investment into perspective, approximately 900,000 naturalizations occur in total in the EU every single year, which amounts to roughly 9 million over a 10-year period. The 6,000 that have come in through citizenship by investment over the past decade is less than 0.1% of that total. While minimal to no due diligence is done on those naturalized through other channels, extensive due diligence is done on 100% of those naturalized through EU citizenship by investment programs.

Investment migration programs of EU member states have brought around EUR 25 billion in foreign direct investment into the EU over the past decade. More importantly, as this industry will ensure ongoing value creation for societies within most EU member states, this will greatly benefit the Union in the long term. Other industries that deal in multi-billion-euro liquidity streams and are involved in issues of sovereignty are well-regulated by competent authorities to prudently manage risk and grasp opportunity.

Pržno beach on Budva Riviera

Investment migration is now widely recognised as a longstanding form of both sovereign investment demand generation and a catalyst for economic growth and diversification. It accounts for billions of euros in global capital. There are now over 100 investment migration programs worldwide, and it is a legitimate migration pathway accepted by the United States, Australia, Austria, Spain, Italy, Portugal, and many other sovereign states.

Investment migration has become a standard and recognized policy lever to incentivize foreign direct investment, and the EU member states like Austria, Malta, Spain, Greece, Italy, Portugal and many others that offer these programs, have created a vital advantage for themselves and their citizens in the global competition for capital and skills.

Montenegro can be extremely proud of its citizenship by investment program. It has very quickly established itself as a remarkably successful and world-leading sovereign financing and economic innovation platform, capable of raising millions of Euros in debt free capital for its citizens each year and attracting some of the finest global talent and investors with valuable international networks and skills that will enrich the country.

What they said about the Program of economic citizenship in Montenegro

Bradley Horowitz, VP Product, Google

Having visited your country this summer, I had the opportunity to see in person not only the natural beauty of Montenegro, but also its investment potential. During my stay I had the pleasure of meeting the highest Government officials, and also prominent stakeholders not only from the public sector, but from the private investment area and ICT industry as well. In direct and open conversation with all of them I realized that Montenegro presents remarkable investment opportunities. I am also aware of the Montenegrin CIP and it goes in line with the above said. This programme contributes not only to the country’s economy and financial stability, it also goes hand in hand with placing Montenegro on global map and making it visible to the world’s HNWI.

Tomislav Čelebić, President, Čelebić Company (Real Estate Development Company)

The development projects that are being implemented in Montenegro today will place our country among the exclusive and most desirable destinations in this part of the Mediterranean. The economic citizenship program in Montenegro differs significantly from others in Europe and beyond. Investments are limited to development projects that are sustainable in the long term. Investor control is very strict, which minimizes the potential risk of illegal activities. With these and similar investments, we can improve the standard of citizens, infrastructure, education, healthcare and finally the rule of law. All of these are important prerequisites for us to become part of the developed EU countries.

Blagota Radović, owner, Zetagradnja (Real Estate Development Company)

I am of the opinion that the economic citizenship program contributed significantly to the development of Montenegro, primarily in the north, which enabled the state to direct its capacities and begin the realization of the planned construction of ski centres in the north, which have all the predispositions to be one of the best in the region, and which is certainly of great importance for the development of both winter and summer tourism.

David Margason, CEO, Porto Montenegro (Adriatic Marinas d.o.o)  

Adriatic Marinas d.o.o. applied a measured and responsible application of the then newly offered Government of Montenegro Citizenship By Investment (CBIP) investment stimulus initiative, to its Boka Place hospitality-led, mixed-use project and this provided the confidence to our investors to implement this very significant, employment generating scheme at a very challenging time in the market when the COVID pandemic was halting many other projects. Whilst we await completion of the protracted processing of the resulting CBIP applications made by our clients, our experience of the inward investor market reaction to the scheme, has been very positive to date. We have assembled another innovative, diverse and very significant hospitality-led mixed use project SYNCHRO, which would certainly benefit from the application of the current or any evolved and well operated CBIP program, in terms of investor confidence to launch such a project which we believe would again contribute materially to the further social and economic development of Montenegro.

Vasilije Kostić, economic analyst  

Two thirds of EU countries have a residence or citizenship by investment program, and such programs have contributed over EUR 20 billion to the EU. Investment migration is something typical for the present, since no country is entirely self-sufficient, and all countries seek to attract foreign investments and knowledge.





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