Montenegro’s residency system for foreign company owners is undergoing one of its most significant reforms in years. The Government is adopting amendments to the Law on Foreigners, reshaping how foreign nationals can obtain temporary and permanent residence through company ownership, employment, and property ownership.
Although these amendments were adopted at the government level, the final framework remains in transition. The rulebooks and implementing acts are still pending, and the public debate remains extremely active—in online media, local news outlets, expat forums, investor groups, and economic policy circles. Some provisions may appear still fluid, and additional clarifications or alternative solutions, such as different employee thresholds, revenue benchmarks, real-estate criteria, or other economic-interest mechanisms, may still emerge during parliamentary debate and final adoption is expected in the coming weeks or months.
At the same time, the heated public discussion is already cooling investor sentiment. New investors who were ready to enter Montenegro are now pausing their decisions, while existing investors—whom Montenegro should strive to retain—are growing uncertain. We see a reasonable large group is actively reconsidering their long-term plans and comparing Montenegro to alternative jurisdictions with clearer, more welcoming residency climates.
In other words, Montenegro is in a draft-plus-discussion phase, where the direction of policy is clear, but the details may still evolve and the measures are questionable as some look like one-size-fits-all aproach. This uncertainty has raised important questions that are widely discussed that raise sincere concerns to both the foreign diaspora and the Montenegrin economy: Will transitional periods apply? often, Montenegro ignores to implement and applies almost overnight. How will the new rules affect current residents? Which adjustments (if any) can be expected for (smaller) entrepreneurs who genuinely contribute to the economy but cannot meet strict employment thresholds? These discussions are expected to intensify in the coming period and can have a major impact on the overall economy of Montenegro.
Our advice? Focus on a strict but attractive immigration package including set of favorable tax conditions to attract more overall FDI and attract the right type of foreign investors and foreign labor that Montenegro lacks and needs to further build its economy. Montenegro wants to diversify, and foreigner investors are crucial to achieve this.
Given this context, it is essential to understand the measures now on the table and their potential economic implications.
Annual Residence Permits (New Conditions Apply)
Under the amended framework, foreign nationals who own a Montenegrin company, being the Managing Director and hold 51% or more of the shares may continue prolonging annual residence permits, but only if the company is active, it employs at least three full-time employees, and one employee must be a Montenegrin citizen. This should replace the previous, more flexible system and targets “paper companies” with no real economic substance. Question remains whether a new application each year can substitute for the 3-year prolongation pathway or whether this route will be closed.
Share Ownership and Director Requirements
Foreigners holding more than 51% of shares and acting as executive director fall under the new employment threshold. This may push micro-owners toward restructuring, for instance less than 50% ownership or hiring a local director, accepting such changes could affect eligibility for permanent residency. It underlines every case adjustment requires careful assessment.
Real Estate-Based Residency
A foreigner may obtain residency based on real-estate ownership only if the property value is at least €200,000. This significantly raises the bar compared to previous years. It triggers debates if this should or could apply also for existing property owners, settled in Montenegro and contributing to the economy.
Risks and Opportunities for the Economy
In the labor market, the new rules introduce both challenges and potential benefits. On the risk side, many small foreign-owned companies may find it financially difficult or impossible to employ three full-time staff, especially in early stages of development. Montenegro also continues to face notable shortages of skilled workers in areas such as IT, engineering, tourism, construction, retail, and various service sectors. This means that even companies are willing to hire might realistically not be able to find suitable candidates, as the local labor pool may not always offer the specialized profiles foreign-owned firms require.
Yet there are clear opportunities as well. The new framework could stimulate job creation for Montenegrin citizens although it seems a more populistic measure than having a substantial effect. It could increase the overall economic substance of foreign-owned companies and contribute to greater transparency. With more employees formally registered, the state can expect higher tax and social-security revenues, strengthening the fiscal system.
Turning to the real-estate market, the raised investment threshold carries its own set of implications. Properties valued below €200,000 will be of significant less interest for buyers who primarily seek residency through ownership, reducing demand for studios and lower-tier units. It could rule out entire areas in the country and large parts of certain coastal cities where foreigners traditionally like to buy properties. The largest volume of apartment sales on the coast is between €80-200.000, and although it’s an estimate only, the indication is that 50-70% is the foreign buyer share, with the remainder part being the local buyers. In other words, the real estate market in this segment is put directly at risk in certain coastal zones where prices have risen sharply in recent years.
This shift, however, may positively influence the market by redirecting interest toward higher-quality and higher-value developments, but this effect is long term and can be questioned. In the tourism and other FDI sectors, similar dynamics are expected. Smaller tourism operators, particularly those relying on single-unit rentals or micro-scale hospitality operations, may find the new rules difficult to meet and could gradually leave the market. Digital nomads and freelancers, who previously viewed Montenegro as accessible and flexible, may also find the new residency conditions too restrictive.
Nevertheless, when the final provisions are amended and defined appropriately, the changes could bring notable advantages as well. The market may become more professional and compliant with better-structured businesses and clearer regulatory standards. By setting higher thresholds, Montenegro is likely to attract investors and entrepreneurs with stronger long-term commitments and higher levels of capital, however, it should take care of the smaller existing and future entrepreneurs that represent a certain part of the backbone of the economy. Moreover, aligning residency policy with EU standards will enhance Montenegro’s international credibility, supporting its broader goal of integration and economic stability.