MONTENEGRO Investment Opportunities - Advantage …*source: Montenegro Central Bank and MIPA...

May 2016

MONTENEGRO

Investment Opportunities

MONTENEGRO

FAST FACTS

• AREA: 13.812 km2 (360 km2 of sea)

• CAPITAL: Podgorica

• OLD ROYAL CAPITAL: Cetinje

• POPULATION: 620.029

• OFFICIAL CURRENCY: Euro €

• AIRPORTS: Podgorica, Tivat

• SEA PORTS: Bar, Tivat, Kotor, Zelenika

11 REASON WHY TO CHOOSE MONTENEGRO AS INVESTMENT DESTINATION :

• Economically and politically stable economy

• Candidate for membership in EU and NATO

• Member of the World Trade Organization (WTO)

• Trade agreements with CEFTA, EFTA, Russia, Turkey and Ukraine

• Equal treatment for investors under the LoFI:

• No limit in terms of investing in any industry

• Free transfer of financial and other resources

• Current investors from around 100 countries

• Highest FDI per capita in the region

• Competitive business environment

• The lowest tax rates in the region

• Business Zones with incentives at the local level

• Financial grants by Government

MONTENEGRO

*source: Montenegro Central Bank and MIPA (Montenegrin Investment Promotion Agency)

FDI IN MONTENEGRO

Total inflow of FDI in Montenegro in 2015 was 757 million € - 259 million more than in 2014. By

this indicator, Montenegro is still far ahead from countries in the region

Increase of FDI – result of unique investment opportunities, positive experience of existing

investors and favoruable business environment

No domination of any foreign investor

Major investors are from Russia, Austria, Italy, Switzerland, Cyprus, Hungary, Great Britain, Middle

East...

FOREIGN DIRECT INVESTMENTS

• 2000 - 10 millions €

• 2009 - 1.2 billions €

• 2007 - 2015 - 5.5 billions €

AUSTRIAN FDI IN MONTENEGRO

The highest FDI inflow in 2015 - from Austria Investment value - 260 mill €

Investments in:• Companies and Banks• Insurance companies• Construction

In the last 15 years - Austria invested in Montenegro over 600 mill €

*source: Montenegro Central Bank

DOING BUSINESS REPORT

*source: World Bank - Doing Business Raport

LOW TAX RATES

0

10

20

30

40

9 10 10 1015 15 16 17 19 20

31.4

Corporate profit tax (%) – MNE 9%

05

1015202530

17 18 19 20 20 20 22 24 25 2722

Value added tax (%) – MNE 19%

Tourism

PRIORITY SECTORS FOR INVESTMENT

Energy

Transport

Tourism direct and indirect share in GDP in 2015 – 794,8 mill € (22,1 %)

Until 2026 -1.521,9 mill € is expected - (29,9% of total GDP) (source: WTTC)

Total income from tourism in 2005 was 222 mill € and in 2015 - 801.3 mill €

TOURISM

Montenegro is connected with 76

destinations

Low-cost companies :

• Rayan Air

• Easy Jet

• Wiz Air

ACCOMMODATION FACILITIES

• 386 hotels in Montenegro

•38% beds in high category objects (4/5 *)

• 10 high quality mixed-used resorts

•Hotel Operators (One&Only, Aman, Hilton...)

•Construction of 76 new hotels with 8 000

beds by 2024 year

TOURISM THE DEVELOPMENT PATH IN THE HOTEL INDUSTRY

TOURISMONGOING PROJECTS

PORTO MONTENEGRO

• Investment value: cca 420 mill €

• Mixed used resort which includes luxury 5*hotel,restaurant, bars, cafes, galleries, nautical museum, greenmarket, private health institutions, sports facilitiesestablished, luxury apartments

• Original investor: Adriatic Marinas Ltd. and PM

Securities (Barbados) INC

• Investment Corporation of Dubai recently took over

PORTONOVI/ONE & ONLY

• Investor: SOCAR, Azerbaijan

• Investment value: cca 500 mill €•Construction of luxury hotel with SPA and wellnesscenter, luxury complex with 500 units and villas of thehighest class, a world – class marina with a capacity of250 berths, large number of shops, cafes andrestaurants

TOURISMONGOING PROJECTS

LUŠTICA DEVELOPMENT

• Investor: Orascom Development, Egypt and Switzerland• Investment value: cca 1.1 billion€• Mixed use resort, includes construction of 8 hotels,golf course with 18 holes, 1,250 residential units(villas and apartments), 2 marinas and city center

LASTAVICA ISLAND AND “MAMULA” FORTRESS

– HERCEG NOVI

• Investment value: cca 15 mill €• Long term use• Redevelopment of the Mamula Fortress bypreserving the cultural heritage and promoting thehistoric character of the island

• Investor: Orascom, Egypt and Switzerland

TOURISMPOTENTIAL INVESTMENT

NAUTICAL TOURIST CENTER VIP MARINA - KOTOR

• Investment value: cca 90 mill €• Tender preparation in progress• land and aquatorium in Boka Baymarina - 150 berths with facilities and infrastructure,administrative building, commercial facilities, highcategory hotel complex

NJIVICE HERCEG NOVI

Land of 30,597 m² and aqatorium of 7,313 m²

• Planned for marina, business or congress hotel,apartment facilities, 5000 m² beach

• Tender documentation may be purchased until 15July 2016.

TOURISMPOTENTIAL INVESTMENTS

ADA BOJANA - ULCINJ

• Investment value: cca 200 mill €• Public-private partnership - long term lease• Area of about 100 ha planned tourist complex (fromabout 520 ha total area of island), which includes at leastone 4-5* hotel, villas and other types of residentialaccommodation

VRANJINA SITE WITH LESENDRO – Skadar Lake

• Tender documentation may be purchased until 14June 2016.• Area: 13,132 m² for feature an ecolodge touristresort• 30 objects servicing visitors to the resort with amaximum capacity of 61 beds


BULJARICA LOCATION

• Purchase and long-term lease up to 90 years.International tender for valorization is published.

• Location: about 18 km from Budva and at the samedistance from Bar

• The entire Buljarica location covers the area of around17,000,000 m². The subject of the sale includesimmovable properties with a total area of 4,898,216 m²and the subject of long-term lease 533,956 m² and aquaspace with an area of around 585,772 m²

• Beach is approximately 2,500 meters long, and around30 meters wide

• Investment value for the immovable property:minimum 108.761.000 mill €


SKI RESORT KOLAŠIN 1600 - KOLAŠIN

• Investment value: cca 65-75 mill €• Long term use - Call for bid submission is published• Located in the south part of the Bjelasica, surfaceamounts to 27,19 ha

MEDITERAN - ŽABLJAK

• Public-private partnership• Tender documentation may be purchased until 3June 2016• Construction of a new tourist resort at location offormer military complex in Žabljak in the area of13.951 m²• Located in 1456 m above the sea level, in the mostattractive area of national park “Durmitor”

Submarine cable

• Construction of submarine cable with energy of 1.000 MW capacity between Italy and Montenegro

• Investment worth more than 800 mill € (415 km long, 390km undersea and 25km of underground

cable)

• Project realized by TO and TERNA, Italy

• Project will position Montenegro as regional energy hub, giving the investment opportunity for all

region.

II Block TPP Pjevlja

• Construction of the II Block TPP Pljevlja, installed power capacity of 250MW; total investment costs

338,5 mill €

• Negotiation with potential investors in progress

ENERGY PROJECTS

`

Hydro Power Plant Morača

• Technical Design encompases construction of 4 hydro-power

plants with total installed power of some 238.4 MW and an

average annual production of 721 GWh.

• All technical documentation is available for investors insight.

Hydro Power Plant Komarnica

• Beside construction of HPP Morača, construction of HPP

Komarnica is planned, the annual production is about 232 GWh

and total installed power of 178 MW.

ENERGY PROJECTS

Small hydropower streams Biomass potential

Planned Contracted Remained Planned Contracted Remained

132 MW 73 MW 59 MW 39,0 MW none 39,0 MW

Solar potential Wind potential

Planned Contracted Remained Planned Contracted Remained

31,5 MW none 31,5 MW 189 MW 118 MW 71 MW

Projects under construction:

• Wind farms on the site Krnovo and Mozura, total installed capacity of 120 MW

• Construction of 41 small hydro power plants is given throughout 21 concession contracts; total

installed capacity 72 MW

Renewable energy

ENERGY PROJECTS

Maoče project

• Concession for the exploitation of coal from the basin of Maoče and the construction of a thermal power

plant of the estimated capacity of 500 MW (2k250MW), 45 years concession, with a possibility of

extension up to 22,5 years

• Concession fees for the exploitation of coal will be calculated as a percentage of revenues from the sales

of electricity

TAP - IAP

• Construction of gas pipeline from Albania to Croatia via Montenegro and B&H

• Total lenght 511 km (94 km in Montenegro)

• The project will enable gasification of MNE

ENERGY PROJECTS

`

Construction of Highway Bar – Boljare

• The highway Bar – Boljare is included in SEETO comprehensive regional transport network for the

Western Balkan, as SEETO route 4 and it will connect Montenegro with Europe, begining from the Adriatic

coast via the Capital City Podgorica, to the border with Serbia

• The first Section, Smokovac-Uvac-Mateševo is currently under construction; estimated costs of this

section - 809 mill €

• The Project includes construction of additional sections: Mateševo–Andrijevica, Bypass around Podgorica

(Smokovac–Tološi–Farmaci), Djurmani-Farmaci and section Andrijevica-Boljare.

Railway Line Belgrade (Vrbnica) – Bar , Reconstruction and modernization of Railway line

• Modernization and reconstruction of the railway line in compliance with European and main

international railway lines and achievement of interoperability of the railway lines along the Corridor X

• Total lenght is 454,8 km of which 167,1km in Montenegro and 287,4km in Serbia

• The value of the project is estimated in the amount of cca 250 mill €

TRANSPORT PROJECTS

`

Development of Airport Podgorica

• The project includes the construction of a new terminal building in capacity of 12,500 m², expansion

and reconstruction of manoeuvring areas and apron, new fuel depot and parking with ground support

facilities (including shelter)

• Estimated value of this project - 95 mill €

TRANSPORT PROJECTS

EU SUPPORT TO INFRASTRUCTURE DEVELOPMENT

Berlin process - initiative of EU and Western Balkans Countries in 2015 focused on the need for

infrastructure and economy development in the Balkan Region.

Co-financing of infrastructural investments projects within the Western Balkans Investment

Framework (WBIF) implements via creation of Single Project Pipeline (SPP) at national level.

WBIF - joint fund (allocated 1 billion € for the region in period of 2014-2021) of European Commission,

International Financial Institutions and bilateral donors for allocation of financial suport for

infrastructural project

Funds can be allocated for projects from 4 sectors:

The involvement of an International Financial Institutions such as EIB, EBRD, KfW, CEB, WB is arequirement.

Energy

Transport

Environment

Social (Health, Justice and Education)

National Investment Commission (NIC) established on 19 February 2015

Technical apparatus of National Investment Commission - Secretariat for Development Projects

Single Project Pipeline (SPP) - adopted on 2 December 2015

SPP

• 64 projects: 10 projects in energy sector, 9 projects in transport, 30 in environment and 15 in

social sector

EU SUPPORT TO INFRASTRUCTURE DEVELOPMENT

BUSINESS ZONE

• A single entity within municipality that provides new investors

tax and administrative incentives on state and local level, in

addition to common space and infrastructure

INVESTMENT INCENTIVES

DECREE ON DIRECT INVESMENT INCENTIVES

• Further enhance business environment in less developed

municipalities in Montenegro

• Stimulation of economic growth through increased inflow of

direct investments and job creation

Incentives on state level

• Exemption from payment of

social insurance contribution on

wages of employees;

• Use of financial subsidies

provided by the state on the basis

on Decree on Direct Investments

Incentives;

• Possibility to release income and

corporate tax if the amount of tax

for the first 8 years not exceeds

200.000€;

• Business incubator/technological

park/IDF loan for SMEs.

BUSINESS ZONE

Incentives on local level

• Reducing costs of land lease;

• Reducing utility rates;

• Reducing the fee for

construction equipment;

• Reducing of surtax on

income;

• Reducing the tax rate on real

estate;

• One stop shop

BUSINESS ZONE

Investors who realize their investment projects in Montenegro can receive financialincentives awarded by the Government

Both Montenegrin and foreign legal entities can apply

for investment incentives.

Only legal entitieswith a registered

office in Montenegro can be

recipients of investment incentives

Areas supported

Manufacturing and Services -Introduction or

expansion of business in

various sectors of

manufacturing and services.

Hospitality and Hotel Industry -Construction or

expansion of hospitality and hotel facilities.

DECREE ON DIRECT INVESMENTSINCENTIVES

In accordance with the Decree on direct investment incentives,(Official Gazette of Montenegro, no. 80/2015), criteria for applyingdiffers depending on region in which investor is planning to invest.

CRITERIA FOR APPLYING

Podgorica and South region

North and Central region (ex.Podgorica)

Minimum investmentvalue

500,000€ 250,000€

New jobs (opened within 3 years)

20 new jobs 10 new jobs


Amount of direct investments incentives awarded is determined in accordance with the following criteria:

• References of the business entity

• Extent of participation of other business entities from Montenegro during and after the

completion of the investment project

• Value of the investment project

• Investment project impacts related to research and development

• Investment project impacts on human resources

• Investment project impacts on the environment

• Volume of international turnover

• Economic effects of the investment project

• Investment project impacts on the regional development

• Letter of intent from the local self-government



Amount of funds for fostering investments

that may be awarded are in range from 3.000 to

10.000 € per a new employee

Newly employed person shall be a person

employed for an indefinite period of time on the jobs

on which investment project is realized, which increases the number of the employees with the beneficiary of funds in

Montenegro

For capital investments greater than 10 mill€

that provide job creation for at least 50 new

employees, incentives can be awarded in the

amount of up to 17% of the total value of the investment project.

Decree also provides for reimbursement for

infrastructure incurred for purposes

of the Investment project

implementation.

Awarded funds shall be disbursed

in three equal instalments

Instalments must be

backed up with bank guarantee

• Total amount of awarded funds for fostering investments cannot exceed certain percent of theinvestment projects value depending on the size of the business entity:

• A small business entity is a company , which has less than 50 employees and annual turnover or totalannual balance sheet not exceeding 10 mill €

• A medium business entity is a company, which has from 50 to 250 employees and annual turnovernot exceeding 50 mill € or total annual balance sheet not exceeding 43 mill €

• A large business entity is a company, which has more than 250 employees and total annual balancesheet exceeding 43 mill €


Big Medium Small

50% 60% 70%


Second Public notice for participation in the procedure of awarding financial incentives for direct investment closed on 16th May

Secrtariat for Development Projects implements incentives program

and provides operative suport during process of applying

Next Public notice for participation in the procedure of awarding financial incentives for direct investment is expected to be announced in September 2016.

Decree on Direct Incentives, Public announcement, Application Form and supporting documentation can be downloaded on web site of Secretariat for Development Projects:

http://www.srp.gov.me

Thank you for your attention

Secretariat for Development ProjectsMoskovska 2b, Podgoricatel/fax: +382 20 220 030

www.srp.gov.me

MONTENEGRO Investment Opportunities - Advantage …*source: Montenegro Central Bank and MIPA...

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