Montenegro has enacted two new laws that significantly reform its investment fund sector.
The Law on Open-Ended Investment Funds with Public Offering and the Law on Alternative Investment Funds came into force on 19 March and 20 March 20 2025, respectively. These laws introduce a comprehensive regulatory framework for the establishment and operation of Open-Ended Investment Funds with Public Offering (UCITS funds), Alternative Investment Funds (AIFs), and their managing companies.
Key Highlights:
- UCITS funds: These funds pool capital raised through public offerings, investing in transferable securities and other liquid financial assets while adhering to risk diversification principles.
- AIFs: Unlike open-ended funds, AIFs generally collect investor capital for investments based on a defined strategy, sometimes with less focus on joint investments in transferable securities.
- Regulatory Oversight: The establishment and operation of both types of investment funds, as well as their managing companies, require approval from the Montenegrin Securities Commission.
Strengthening Governance and Transparency – A Step Forward for Montenegro’s Financial Sector
The new laws aim to align Montenegro’s investment fund regulations with EU standards, offering greater legal certainty and fostering investor confidence. These legislative updates also distinguish the governance of investment funds from the existing Law on Investment Funds.
Generally, these new regulations should mark a significant milestone in modernising Montenegro’s investment fund sector. By aligning its regulatory framework with international standards, Montenegro enhances investor protection, improves market efficiency, and strengthens its position as an attractive investment destination.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
By Marko Culafic, Partner, Karanovic & Partners