Even though it’s been a year since its parliamentary elections, the outcome still seems to be the talk of the town and the biggest influence on business in Montenegro, according to Schoenherr Partner Slaven Moravcevic.
“The new government, that was formed in December of 2020, is still getting its grips on things, somewhat,” Moravcevic says. “The governmental change has created a new dynamic that has, without a doubt, reflected on the investment atmosphere.”
Moravcevic reports that the new government is still “taking stock” meaning that some ongoing investment transactions – especially those that had the Montenegro state as a counterparty, have grinded to a halt. On the other hand, Montenegro is still an attractive investment destination for foreign investors. “This, by and large, is reflected the most on the real estate, energy, and tourism sectors, but others are impacted as well,” Moravcevic says. “The government is trying to create an operational framework for itself and this has affected beginnings of several large projects.”
What is noticeable, Moravcevic says, is an increase in arbitration disputes – some even including the Montenegrin state – that could reflect on the economy, going forward. “There have been several arbitration proceedings initiated by investors, that attracted the attention of other investors” Moravcevic reports. “Several large projects have halted, with investors waiting out the entire situation in the country.”
Finally, Moravcevic says that it is difficult to predict when will the new government kick it up a gear and re-energize the investment climate of the Balkan country. “It is very difficult to make any projections and predictions, especially when it comes to the direction the government will take,” he says. “What we can notice, however, is that the entire region – Croatia, Serbia, North Macedonia – has bounced back economically, to an extent, following the pandemic in 2020. Life has found a way forward and, with the latest vaccination efforts, it is likely to pick up speed,” Moravcevic concludes.