Montenegro became an independent state in 2006. This event represents the foundation of the country’s resolute policy towards Euro-Atlantic integrations, which gained momentum in 2017 when Montenegro joined NATO. The country is currently scheduled to join EU in 2025 according to the EU’s strategy for the Western Balkans.
The country took a bold move in 1999 to adopt German Mark as its official currency, followed by conversion to Euro in 2012. This made Montenegrin economy more resistant to monetary shocks and appealing to foreign investments. However, Montenegrin economy was affected by the global economic crisis. Another factor that contributed to economic recession that started in 2008 was Montenegro’s dependency on tourism. As a result, after 2008, when it reached one of the greatest GDP growths in the region at the rate of 7.2%, the country faced a major blow with the GDP rate sinking down to -5.8% in 2009. As other countries in the region, Montenegro has been since then on a recovery route, with the continuous GDP growth from 2013. The economic recovery was largely based on foreign direct investments that generated 15% to 20% of the national GDP in the period 2013-2017.
Notwithstanding its political orientation towards EU, Montenegro generously welcomed investors from the east, particularly Russia and United Arab Emirates, and, as of more recently, Turkey. Notwithstanding, in 2014, however, Montenegrin government aligned its foreign policy with the EU and imposed sanctions on Russia over the Ukraine crisis.
Montenegrin Government introduced fiscal measures in 2016 under a five-year consolidation plan. The main goal is to decrease fiscal deficit by reducing public expenditures mainly on the account of state administration and social services. Simultaneously, greater fiscal discipline has been imposed on tax payers. Nevertheless, Montenegro’s public debt continued to rise mainly due to large public investment in the construction of Bar-Boljare highway. As a result, the Government increased VAT at the beginning of 2018 from 19% to 21%. The aim is to lower public debt from 66.5% of GDP in 2018 to 59.7% in 2020.
BDK Advokati in Montenegro
We have been advising most prominent investors in Montenegrin infrastructure, energy, oil and gas, banking, hospitality, and gaming sectors, such as Turkish companies Toscelik, Dogus, Ziraat Bank, Net Holding and Waikiki, Italian Eni, Spanish Iberostar, US AECOM, French Akuo, and many others. We have also advised Montenegrin public companies, most notably power transmission operator CGES on its joint venture for construction of underwater interconnection cable with Italian Terna, and the Government of Montenegro on the exit of the Italian partner A2A from the electricity incumbent EPCG. We have strong track record in the field of renewable energy. We are also a law firm of choice for major multinational financial institutions operating in or lending to Montenegro and global technological companies seeking regulatory advice.
Our firm is recognized as band 1 in Montenegro by all three major law firm directories: Chambers and Partners, Legal 500, and IFLR1000. Furthermore, Chambers and Partners ranks Luka Popović, our partner heading the Podgorica office, as a Band 1 lawyer on the Montenegrin legal market. He is also recognised as a leading individual in Montenegro by Legal 500 and as a highly regarded lawyer by IFLR1000. Bisera Andrijašević and Jelena Brajković are recognized as rising stars by Legal 500.
We are truly one firm in all jurisdictions in which we operate, and our Montenegrin team is fully integrated into the BDK eco-system. Our experts from the Belgrade office work alongside our Montenegrin colleagues on Montenegrin transactions that require special know how developed in our largest, Belgrade office. At the same time, our Montenegrin colleagues who have special expertise in industries well developed in Montenegro, such as hospitality and gaming, assist colleagues from other BDK jurisdictions on deals involving these industry sectors.