Montenegro’s unspoiled natural beauty and favourable economic and political climate have allowed the small country of circa 680,000 citizens to emerge as one of the most attractive tourist destinations in Europe. The country was led by PM Milo Djukanovic for almost twenty years, creating the conditions for a stable political system and the emergence of dynamic, young politicians such as Igor Luksic, the former Minister of Finance, who was elected Prime Minister in December 2010. The overall economic activity has been growing strongly with the tourism industry as the major vehicle, propelling investments in other sectors of the economy, creating €2.5 billion in total new investment.
A business friendly environment
Montenegro has one of the lowest corporate and capital gains tax rates in Europe (9%), low barriers to entry for new businesses, property rights, and a price-competitive, educated young labour force. It became a full member of the World Bank, IMF and EBRD in 2007, and progress towards NATO, WTO and EU membership will further guarantee political and economic stability.
Montenegro leads the world in tourism growth
According to the World Travel & Tourism Council and Oxford Economics (2014), Montenegro is likely to be the fastest-growing travel and tourism economy in the world over the next decade, surpassing Brazil, Russia, India and China. It is currently ranked 1st in the world out of 184 countries in terms of travel & tourism GDP growth, with a 8.8% annualised increase forecast for 2013-2024. With its Southern Mediterranean climate, Montenegro enjoys more than 240 sunny days each year and offers a unique terrain where both skiing and swimming can occur within the same day.
Record inflows of foreign direct investment
The Government of Montenegro, with its improved economic and institutional framework, has attracted record inflows of FDI, notably in the tourism sector. Apart from Porto Montenegro, there are several other noteworthy major catalyst investments on the Montenegrin coastline including; Aman Sveti Stefan (Restis Group), Sveti Marko Island (Metropol Group), Lustica Peninsula (Orascom of Switzerland), Porto Novi (SOCAR and Kerzner International), Plavi Horizonti/Bonici (Qatari Diar) and Rose (Equest).
Major governmental spending in infrastructure
International bodies such as the World Bank, the European Investment Bank and the EBRD have partnered with the Government of Montenegro and foreign engineering firms to improve the country’s infrastructure. Major highway development is underway with a north-south €3.9 billion motorway planned to link Belgrade with Bar, and another east-west motorway planned to connect Croatia, Montenegro and Greece by 2016. In addition, the World Bank and EBRD recently financed an upgrade of the regional water system and the Municipality of Tivat, through financing provided by Porto Montenegro, and has recently completed the state-of-the-art local sewerage network. EBRD also participated in improving the electricity distribution system, and has provided €295 million of financing in Montenegro since 2003.
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