Montenegro recorded €119.3 million in net foreign direct investment (FDI) in the first four months of 2026, marking a decline compared with the same period a year earlier, according to preliminary data from the Central Bank of Montenegro (CBCG).
Net FDI inflows between January and April 2026 were down 26.84% year-on-year, compared with approximately €163 million recorded in the corresponding period of 2025. The decline was driven mainly by higher capital outflows, while foreign investment in domestic companies and banks increased significantly during the period.
Gross Investment Remains Strong Despite Lower Net Inflows
Total FDI inflows reached €276.49 million in the first four months of 2026, representing a decrease of 7.14% compared with the previous year. At the same time, FDI outflows increased by 16.73%, reaching €157.2 million. The higher outflow level reduced the amount of foreign capital retained in the Montenegrin economy. A significant portion of outgoing funds was related to the repayment of intercompany loans, rather than a broad withdrawal of foreign investors or the closure of businesses.
Investment in Companies and Banks Increases 79%
The structure of incoming foreign investment showed stronger growth in corporate and financial-sector investment. Foreign investment in Montenegrin companies and banks reached €42.43 million, an increase of 79.36% compared with the same period of 2025. The increase amounted to €18.77 million, compared with approximately €23.66 million recorded in the first four months of the previous year.
Investment in companies and banks accounted for 15.35% of total FDI inflows during the period. The segment remains smaller than property-related investment but represents a different type of capital allocation, supporting business expansion, employment, technology transfer and corporate balance-sheet development.
Real Estate Continues to Dominate Foreign Capital Inflows
Foreign investment in real estate remained the largest component of Montenegro’s FDI structure Property investment totalled €147.4 million during the first four months of 2026, down 8.02% from approximately €160.3 million a year earlier.
Real estate accounted for 53.31% of total incoming FDI, with foreign capital continuing to flow mainly into apartments, houses, land and commercial property. Combined investment in property and companies and banks amounted to €189.83 million, representing 68.66% of total FDI inflows.
Intercompany Loans Account for Nearly 30% of Inflows
Investment through intercompany debt represented another major source of foreign capital. This category generated €82.46 million in inflows, accounting for 29.82% of total FDI. Compared with the first four months of 2025, intercompany loan inflows decreased by 22.5%, from approximately €106.4 million. Such financing is commonly used by international groups to fund subsidiaries, development projects and working capital requirements. However, these flows can change quickly through repayments or restructuring.
Capital Withdrawals Increase During Period
Of the total €157.2 million in FDI outflows, €116.77 million represented withdrawals by non-residents from investments previously made in Montenegro. Additional outflows of €40.43 million came from investments made abroad by Montenegrin residents. Other forms of foreign investment generated only €4.2 million, equal to 1.52% of total inflows, highlighting the concentration of Montenegro’s foreign investment model around real estate, equity transactions and related-company financing.
Turkey Records Largest Country-Level FDI Outflow
The largest recorded FDI outflow by country was linked to Turkey, amounting to €26.03 million. According to analysis by the Turkish Chamber of Commerce in Montenegro, €21.75 million of this amount was related to the return of capital provided through intercompany debt, while €3.65 million was connected with property sales. The structure of these transactions reflected repayment and capital recycling rather than a general withdrawal of Turkish investors.
After Turkey, the largest recorded FDI outflows were linked to:
- Serbia: €22.69 million
- United Arab Emirates: €17.35 million
- Netherlands: €14.44 million
- Bosnia and Herzegovina: €9.43 million
- Croatia: €8.08 million
These flows reflected Montenegro’s investment links with neighbouring Balkan economies, European holding-company jurisdictions and capital from Gulf markets.
Investment Structure Remains Focused on Property
Foreign investment in real estate continues to provide financing for construction, tourism development, municipal revenues and household wealth. The concentration of FDI in property leaves Montenegro more exposed to changes in foreign demand, financing conditions and investor sentiment.
The structure also creates differences between coastal property markets and productive economic activity in northern and central regions. The economic contribution of property investment depends on whether capital is linked to operating businesses, hotels, infrastructure projects and commercially active developments rather than passive ownership of residential assets.
Corporate Investment Growth Signals Structural Change
The increase in foreign investment in companies and banks represents a change in the composition of FDI despite its smaller overall share. Growth in this category could strengthen Montenegro’s external financing structure by increasing investment linked to productive activities and improving the ability of domestic companies to access bank lending and institutional finance.
The current data remains preliminary, and a sustained shift would require continued growth in corporate and banking investment throughout 2026, alongside a decline in real estate’s share through stronger investment in other sectors. Montenegro began 2026 with significant foreign capital inflows, but with a larger amount of previously invested capital being repaid or withdrawn, resulting in lower net FDI despite continued investment activity.
