Montenegro’s provisional closure of the EU negotiating chapter on competition policy in July 2026 is bringing new rules on state aid, competition, procurement and governance into the country’s public-sector corporate framework.
The competition chapter was provisionally closed after Montenegro adopted a broader system covering antitrust enforcement and merger control. The Agency for Protection of Competition can now impose interim measures, accept commitments and pursue periodic penalties. A separate law gives companies and consumers the right to seek damages following competition infringements. Montenegro’s 2025 state-aid law has also strengthened controls over support before and after it is granted and provides mechanisms for recovering unlawful state aid.
The reforms affect the relationship between the state and companies in which it can simultaneously act as shareholder, regulator, lender, customer and provider of financial support. For private investors, the changes concern the conditions under which companies compete, acquisitions are reviewed and state-owned businesses receive support.
Montenegro Airlines case tests state-aid rules
The treatment of failed state-owned companies is emerging as a significant test of the new framework. EU scrutiny of support provided to Montenegro Airlines, together with questions concerning possible economic continuity between the collapsed carrier and ToMontenegro, which operates as Air Montenegro, illustrates the issue. The creation of a new legal entity does not necessarily remove potential state-aid liabilities where the business, assets and economic activity continue.
The principle has implications beyond aviation. Recapitalisations, asset transfers and successor companies created around insolvent state businesses must be assessed against market conditions and state-aid requirements. The same issue affects lenders and commercial partners conducting due diligence. Agreements with a newly established public company can remain relevant to the history and liabilities of the entity it replaced.
The arrival of Wizz Air’s new Podgorica base adds another dimension to the airline market. The low-cost carrier can deploy aircraft across its regional network and assess routes on commercial terms. Air Montenegro operates with a public-connectivity mandate while also having to demonstrate compliance of support and contracts with EU rules. Airports of Montenegro, another state-owned group, operates as infrastructure provider and commercial counterparty between the airlines.
State-company boards face new governance requirements
A June 2026 law on state-owned companies establishes a common ownership framework coordinated by the Ministry of Finance. The legislation introduces public competitions and competence requirements for board appointments, alongside measurable objectives and performance monitoring. It draws on OECD principles and seeks to establish a more consistent ownership policy across state-controlled companies.
The practical impact will be tested at companies including EPCG, Airports of Montenegro, Port of Bar and Air Montenegro, as well as other public-sector groups. The framework requires greater emphasis on transparent recruitment, measurable performance and disclosure of related-party risks. Its application will also determine whether boards can reject uneconomic instructions and replace managers who fail to meet agreed objectives. For lenders and minority investors, stronger corporate governance can affect perceived risk. The changes also alter the role of political appointments and require incumbent managers to demonstrate performance through measurable objectives.
Procurement rules face pressure from bilateral agreements
Public procurement accounted for 11.38 per cent of Montenegro’s GDP in 2024. The expansion of e-procurement and closer alignment with EU procedures is opening public tenders to engineering contractors, technology suppliers, consultants and service companies. More transparent evaluation can also make procurement pipelines easier for bidders and financiers to assess.
The European Commission has nevertheless identified an exception involving a 2025 tourism and property agreement with the United Arab Emirates. Contracts connected with the agreement were exempted from Montenegro’s procurement law, creating concerns over potential circumvention of the EU acquis. The issue concerns the application of procurement rules to strategically supported projects rather than the participation of Gulf capital itself. Different procurement regimes would impose EU-style compliance costs on ordinary bidders while allowing designated projects to proceed under bilateral arrangements. This could affect domestic suppliers with established connections and lead international contractors to reflect uncertainty in their bids or avoid particular tenders.
Enforcement will determine how the new framework operates
The new competition and state-aid framework affects companies whose business models depend on state bailouts, non-transparent contracts or protected market positions. It also establishes requirements for public companies to demonstrate that their decisions comply with commercial principles. Effective implementation depends on the capacity of the competition authority, including sufficient staff, access to data and the ability to investigate influential market participants.
Courts will have a role in processing competition fines and damages claims, while ministries must notify state aid before support is provided rather than retrospectively justify payments. Public procurement systems also need mechanisms capable of identifying collusion and conflicts of interest in addition to providing digital processing of tenders. Montenegro’s competition chapter is provisionally closed, while the new competition, state-aid, procurement and corporate-governance rules are being applied across the public and private sectors.
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