Montenegro is preparing a new system for reviewing foreign investments from non-EU countries, after the government approved a proposal on 31 July 2026 to establish a formal investment-screening mechanism. The planned framework will eventually be incorporated into a dedicated Law on Foreign Investment Screening and will cover transactions that could affect national security, public order, critical infrastructure, strategic resources or sensitive technologies.
New Rules for Non-EU Investors
The proposed system would apply when a non-EU investor acquires at least 10% of ownership or voting rights, or gains significant influence or control over a company. It could also cover companies registered in Montenegro or the EU when their ultimate controlling investor is based in a third country.
Transactions subject to screening would not be completed until the review ends. Investments considered low-risk could proceed, while transactions raising security or public-order concerns would undergo further examination. The Montenegrin government would have the final authority to approve or prohibit investments.
Third-Country Capital Remains Important
The new framework comes as Montenegro continues to rely heavily on foreign capital. The country attracted approximately €1.02 billion of gross FDI in 2025, up around 14% year on year, while net FDI increased 8% to €531 million. Real-estate investment reached approximately €497 million, while investment in companies and banks stood at around €132 million and intercompany lending at approximately €319 million.
Serbia was the largest individual source with around €142 million, followed by Turkey with €136 million and Russia with approximately €112 million. Those three countries together accounted for more than €390 million of investment in 2025.
Russian Investment Focused on Real Estate
Russian nationals invested approximately €112 million in Montenegro in 2025, despite sanctions, the lack of direct air connections and more difficult cross-border financial transactions. More than €60 million went into apartments, houses and land, particularly along the Adriatic coast. Other investments included company recapitalisations and shareholder lending. A property purchase by a non-EU investor would not automatically be prohibited. Its treatment would depend on whether the transaction falls within the strategic sectors and ownership thresholds established by the new legislation.
EU Rules Shape Montenegro’s Approach
Montenegro’s planned system follows a broader European regulatory shift. The EU adopted Regulation 2026/1386 on 17 June 2026, strengthening foreign-investment screening and establishing common minimum areas including critical infrastructure, defence capabilities, semiconductors, quantum technologies, certain AI activities and strategic raw materials. The EU framework also covers situations where a third-country investor uses an EU-incorporated company to conduct an investment.
The new European system envisages an initial review generally lasting no more than 45 calendar days after a filing is considered complete, while allowing deeper investigations when necessary. Montenegro’s preparatory documentation states that the country cannot formally participate in the EU cooperation mechanism before accession, but that its national system should be designed to become interoperable with the EU framework.
Energy, Infrastructure and Mining Could Be Affected
The screening mechanism could be particularly relevant to investments in ports, airports, energy facilities, telecommunications and mining. Montenegro requires substantial capital for solar, wind, hydro, transmission, storage and grid infrastructure. Potential investors include European institutions as well as Turkish, Gulf and Asian companies. Mining could also receive greater scrutiny because European rules include activities involving exploration, extraction, processing, recycling and stockpiling of strategic raw materials. Future projects involving investors from China, Turkey, Gulf countries, Russia or other third countries could therefore fall within the strategic-investment framework.
Government to Lead the Screening Process
Under the proposed structure, the Ministry of Economic Development would serve as the central authority and EU cooperation contact point. A screening council would support the process, while the government would make the final decision on whether an investment is approved or prohibited.
Economist Davor Dokić has criticised the proposal as an additional administrative burden, arguing that existing tax, anti-money-laundering, financial-supervision and Central Bank mechanisms already examine potentially problematic capital. The economic effect will depend on the speed, transparency and predictability of the new reviews. Longer approval periods could affect acquisition schedules, financing drawdowns, construction and project completion.
FDI Weakened in Early 2026
The new system is being prepared as foreign-investment growth has weakened. During the first four months of 2026, net FDI inflows declined 7.14% year on year, while gross inflows fell 26.84% and total FDI outflows increased 16.73%.
The proposed screening mechanism had not yet been introduced during that period. Montenegro continues to depend on foreign capital for property development, corporate expansion and external financing, while its economy remains heavily reliant on tourism and foreign investment. The planned legislation will add a new regulatory layer as Montenegro aligns its investment framework more closely with the European Union.
