Montenegro has begun preparing legislation that would introduce foreign investment screening on national-security and public-order grounds, creating an additional regulatory stage for certain acquisitions and major investment transactions. The Ministry of Economic Development launched a 15-day public consultation for the planned Law on Screening of Foreign Investments. Comments can be submitted.
The initiative follows an earlier government decision supporting the creation of a comprehensive mechanism for reviewing foreign investments and starts the legislative process for Montenegro’s first such framework. The government intends the system to protect national security and public order while bringing Montenegro’s investment-review rules closer to European practice.
Proposed Screening Framework
Under the model outlined so far, the Ministry of Economic Development would serve as the central screening authority, supported by an inter-institutional body. Final decisions on transactions considered sensitive would remain with the government. The new framework would represent a change from Montenegro’s predominantly open foreign direct investment regime, as certain transactions could require additional regulatory review before completion.
The final legislation will determine the scope of mandatory screening, transaction thresholds and applicable investor categories. The government faces the task of establishing the mechanism while Montenegro remains heavily reliant on foreign capital. Gross foreign direct investment reached approximately €457 million in the first half of 2026, including around €238 million in property investment and approximately €72 million invested in domestic companies and banks.
Impact on Investment Transactions
The screening framework could introduce additional transaction timelines and compliance requirements depending on the final rules. The legislation is intended to provide targeted review rather than impose general restrictions on foreign investment. Comparable screening systems can cover areas including critical infrastructure, sensitive technology, energy supply and personal data, where ownership can have implications beyond the commercial value of a transaction.
For Montenegro, the proposed framework would require greater consideration of investor identities, ownership structures and the wider implications of individual transactions. The timing coincides with an investment cycle involving energy, transport, tourism infrastructure and logistics, where foreign companies and financiers are expected to provide a substantial share of capital. Investment would not necessarily be prevented under the proposed system, but certain transactions could be subject to additional conditions or longer approval procedures.
M&A and Financing Considerations
The legislation could also affect mergers and acquisitions involving Montenegrin companies. Transaction due diligence may need to establish not only whether competition or sector-specific approvals are required, but also whether a deal falls within the foreign-investment screening regime.
This could affect transaction documentation, including share purchase agreements, which may need additional regulatory conditions, longer closing periods and clearer allocation of risks associated with delayed or conditional approvals. The framework could also become relevant to lenders where financing arrangements provide significant control rights or where enforcement could result in ownership of an asset covered by the legislation. Its potential scope therefore extends beyond conventional greenfield foreign direct investment to private equity, infrastructure funds, strategic buyers and complex financing structures.
18-Month Legislative Framework
The government has indicated that the legislation will be prepared within an 18-month framework following its latest conclusions, meaning the screening system is not expected to become fully operational immediately. The legislative process provides companies and advisers with time to assess the potential requirements. Key issues will include which transactions require notification, applicable thresholds and the time available to authorities for decisions.
Those provisions will determine the extent to which foreign-investment screening becomes an additional compliance requirement in Montenegro-focused transactions. The country’s reliance on foreign capital makes the structure of the new framework particularly relevant to investment activity. Its practical application will depend on the clarity of the rules, their predictability and the ability of authorities to process reviews within commercially workable deadlines.
