Montenegro’s startup ecosystem faces several key challenges, including the lack of an innovative economy, limited access to credit, insufficient experience in financial management and a need for better entrepreneurial culture. There is also a shortage of specialized workforce, competition and investments, along with gaps in infrastructure and digitalization. However, Montenegro has notable advantages: its small and open economy allows for quick testing of business ideas, a favorable tax system, access to EU funds, and a supportive strategic and legislative framework.
Montenegro’s startup scene is primarily focused on e-commerce, software-as-a-service (SaaS) and the gaming industry. The government, through institutions like the Innovation Fund, Ministry of Science and the Investment and Development Fund (IRF), provides financial support, especially in information and communication technologies (ICT). The Innovation Fund has supported 79 ICT projects and witnessed an increase in applications, with 252 in 2024, compared to 213 in 2023 and 59 in 2022. However, Montenegro’s startup ecosystem still lags behind more developed countries in terms of investment and competition, with significant room for improvement.
The key to advancing the ecosystem is enhancing infrastructure and digitalization. Digitalization efforts, such as the “GovTech” initiative, aim to modernize public sector services, which can create a strong foundation for private sector innovation. The Innovation Fund emphasizes the need for continuous improvement to prepare for EU structural funds.
One of the main hurdles for young entrepreneurs is their lack of collateral and experience in financial management, making it difficult for them to secure loans. The IRF offers support through low-interest loans with flexible repayment terms, focusing on micro, small, and medium enterprises owned by Montenegrin citizens under 35. However, the sector is still underdeveloped, and there is a need for better connection between young entrepreneurs and potential investors. They also highlight the importance of education, digital business models, and increased financial literacy.
While the startup scene is growing, challenges remain, particularly in building a strong entrepreneurial culture, overcoming regulatory barriers, and developing specialized labor. The IRF and other agencies are working to address these issues through various programs and strategic reforms. Despite these challenges, the small size of Montenegro’s economy allows for rapid testing of business ideas, which is an advantage for young entrepreneurs, especially with favorable tax policies and EU funding opportunities.
The country’s startup scene is still developing, but efforts are underway to improve it. The government has introduced several measures to stimulate innovation, such as the law on research and innovation incentives, increased funding for innovation programs, and the creation of tech parks and educational initiatives. However, Montenegro still lacks a diversity of vertical industries, with the most prominent areas being e-commerce, SaaS, and gaming. Quality, innovation, team strength, and adaptability are crucial for success in this ecosystem.
Some startups, like the gaming studio 3Hills and the children’s speech therapy game “Sofi Sova,” have emerged as examples of innovation in Montenegro. These projects, supported by initiatives like Digital Den, demonstrate the potential of the Montenegrin startup scene. Still, a lot of work remains in terms of developing infrastructure, providing financial support and fostering innovation across industries.
The Innovation Fund allocated €3.3 million in 2023 for startup support, with €350,000 designated for early-stage startups. For 2024, the fund has prepared €2.4 million for seven different programs aimed at strengthening innovation in small businesses and supporting early-stage startups, education in smart specialization areas, and fostering a culture of innovation. This funding aims to further stimulate the growth of Montenegro’s startup ecosystem and encourage future investment in the sector.
