MONTENEGRO: An Introduction to Corporate/Commercial
M&A Outlook 2025: Trends, Regulation and Opportunities
Economic landscape
Montenegro’s economic landscape, though modest in size, is increasingly dynamic and investor-friendly within the Western Balkans. The country offers a liberalised foreign direct investment regime and strategic access to European and international markets. Its unique geographic positioning and economic potential continue to attract growing interest from global investors. Key sectors such as tourism, energy, information technology, hospitality and real estate remain particularly attractive for mergers and acquisitions (M&A), supported by an open investment environment and gradual regulatory alignment with EU standards.
Economic and investment climate
Montenegro’s economy remains service-oriented, with tourism and hospitality as leading contributors to GDP, followed by energy, construction, and an increasingly vibrant IT and digital services sector. The growth of tourism and infrastructure projects has sustained demand in construction, while energy and digital services, especially software development and IT outsourcing, attract strong investor interest. The northern region of the country, traditionally less developed, is now seeing increased investment, particularly in ecotourism, energy and agribusiness.
The use of the euro and the national treatment principle under Montenegrin law enable foreign investors to operate under the same conditions as domestic players, contributing to market predictability and ease of entry. Additionally, recent government initiatives aimed at digitalisation, transparency and alignment with EU standards are reinforcing investor confidence.
M&A activity and deal trends
The Montenegrin M&A market remains modest in size but is showing growing diversification and development. Recent transaction activity has focused on banking, energy, telecommunications, real estate and IT. Emerging sectors such as pharmaceuticals and healthcare are also gaining investor attention.
Deals typically involve a mix of share and asset acquisitions, with no clear dominant structure. Foreign investors maintain strong interest in hospitality and tourism assets, including hotels, resorts and coastal real estate. Recently, the northern inland regions have attracted investment due to geographic diversification and development.
While strategic acquisitions prevail, there is an increase in distressed opportunities and restructuring-driven deals, particularly in real estate and infrastructure sectors. Due diligence is becoming more thorough, often supported by escrow arrangements and local legal and financial advisers, enhancing security for both buyers and sellers. Although Montenegro does not publish comprehensive M&A statistics, qualitative trends indicate steady activity, with growing prominence of IT companies and digital service providers.
Legal and regulatory developments
Montenegro’s corporate legal environment is stable and evolving to support business growth and workforce development. There have been no recent amendments to the Company Law but tax and labour reforms are influencing business planning.
Recent tax reforms target personal income taxation and include increases in minimum and average wages. Public discussions continue regarding a proposed reduction in the standard working day from eight to seven hours, aiming to improve work–life balance and family welfare.
In corporate transparency and anti-money laundering, Montenegro updated legislation to strengthen regulation of crypto-asset services and improve beneficial ownership transparency. From March 2025, mandatory registration for crypto service providers and stricter due diligence obligations for sectors like gambling and financial services will be implemented. The establishment of a Register of Crypto Asset Service Providers is expected within the year.
Montenegro has also introduced digital nomad residence permits to promote remote work and enhance cross-border talent mobility, integrating its labour market into the global digital economy.
Foreign direct investment (FDI) regime
Montenegro maintains a liberal FDI regime based on equal treatment for domestic and foreign investors. While no centralised FDI screening exists, regulatory approval is required in sectors such as banking, telecommunications, energy, pharmaceuticals and defence.
Though national security concerns are not codified explicitly, sectoral authorities exercise discretion in assessing investment risks, especially in strategic industries. For example, foreign ownership in the banking sector requires Central Bank approval, while electronic communications investments are regulated by the Agency for Electronic Communications and Postal Services.
A notable restriction applies to foreign ownership of certain immovable properties. Foreign individuals and legal entities cannot acquire ownership rights over natural resources, agricultural land, forests, culturally or strategically significant properties, or land in border zones. Exceptions allow foreign individuals to purchase property with a residential structure on such land, within defined limits.Additionally, foreign investors may explore the option of acquiring such properties through a Montenegrin company, which can hold ownership within the existing legal framework. These restrictions should be carefully considered during transaction structuring.
Digitalisation trends in Montenegro
Montenegro is advancing digitalisation across public administration and corporate services. The Central Register of Business Entities is moving towards full digitisation, aiming to enable online company formation, corporate changes and document retrieval.
An online Register of Ultimate Beneficial Owners (UBO) has been introduced to enhance corporate transparency and comply with international anti-money laundering standards. This platform facilitates registration of individuals with ultimate control over companies, supporting business accountability.
The government’s eGovernment portal offers citizens digital access to services like scheduling health appointments and obtaining official documents, with plans for further expansion to improve interactions between businesses, individuals and public institutions.
Outlook for 2025
Looking ahead, Montenegro’s M&A outlook for 2025 remains positive. Strong investor interest persists in sectors including tourism, energy, IT and hospitality, with the northern region attracting increasing attention due to investment incentives and available land. Continued reforms and a firm commitment to EU integration provide a solid foundation for alignment with European standards, enhancing the overall investment climate.
Foreign investors are advised to stay informed about sector-specific regulations and digital asset compliance. With thorough due diligence, local expertise and risk assessment, market entry opportunities in Montenegro are well supported and increasingly accessible.
Conclusion
Montenegro’s eurozone currency stability, strategic location, liberal FDI policies and ongoing regulatory reforms present attractive opportunities for cross-border investors. The market is evolving with increasing sectoral diversification and growing deal sophistication. As the country moves closer to EU alignment, it is well positioned to enhance its reputation as a credible and competitive investment destination in the Western Balkans.
While investors should consider sector-specific regulations, property ownership rules and procedural timelines, these aspects can be successfully navigated through careful transaction structuring and local expertise. By doing so, foreign investors can capitalise on Montenegro’s promising and improving investment environment in 2025 and beyond.