According to *The Serbian Economist*, on 30 July the Montenegrin government approved a proposal to establish a mechanism for vetting foreign investments that could affect the country’s security and the functioning of critical infrastructure.
The new rules have not yet come into force. A separate law must be passed for them to be implemented.
It is planned to require prior authorisation from investors from non-EU countries who acquire control or at least 10 per cent of the capital or voting rights in companies operating in strategic sectors.
Screening may cover the energy sector, ports, airports, railways, banks, payment systems, telecommunications, media, digital infrastructure, technology, food production and critical raw materials.
Property will only be subject to scrutiny where it is linked to strategic assets or is located near critical, military or state infrastructure. This initiative does not directly affect ordinary flat purchases by foreign nationals.
The government will be able to authorise a transaction, impose additional conditions or prohibit it entirely. Possible requirements include restrictions on access to confidential data, and the disclosure of information regarding ultimate beneficial owners and sources of funding.
The preliminary review is expected to last up to 45 days. Concluding a transaction without authorisation may result in a fine, a restriction on voting rights or the compulsory sale of the acquired share.
The initiative forms part of Montenegro’s efforts to align its legislation with EU rules. The final terms will be determined once the law has been drafted and adopted.
Formally, no specific countries are named in the initiative. However, in practice, the mechanism will be particularly significant for investors from Russia, Serbia and China. All three countries are outside the EU, and their capital is significantly represented in Montenegro’s economy.
The possible adoption of this law will, in one way or another, also affect Ukrainian investors. Ukraine ranks highly in terms of the number of companies in Montenegro. According to the latest data from MONSTAT, in 2024 there were 1,069 Ukrainian-owned enterprises operating in the country, accounting for 3.6 per cent of all active companies with foreign capital. This ranks fourth after Russia, Turkey and Serbia.
That said, Ukrainian investment is concentrated mainly in property and small businesses. In 2023, the inflow of such investment totalled €19.1 million, of which €15.2 million was spent on property purchases.
Consequently, the impact of the new rules on Ukrainian business is likely to be limited. Routine purchases of flats and the setting up of small companies should not automatically be subject to scrutiny. Authorisation will be required in the case of investments in strategic sectors or assets related to critical infrastructure.