Invest a minimum of $350,000
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Have you always wanted a European citizenship, but don’t want to shell out a million or two to get citizenship in Malta or Cyprus?
We’ve got good news.
The newest kid on the citizenship by investment (CBI) block is Montenegro and we’re sure it’s going to give other CBI programs a run for their money.
Montenegro is not a member of the EU yet, but it’s predicted to join by 2025.
Sure, there can be no guarantees, but it’s a country that’s safe and stable, a member of NATO (highly beneficial for a small country) and is already using the euro, so the chances are high.
Can you afford to take a gamble and buy a European citizenship for cheap to get the full benefits of living and working anywhere in the EU in five years time?
The choice is yours.
But what we will say is this: Montenegro is an ideal location with pristine nature and a balmy climate.
Even though plenty of Nomad Capitalists have been lured to vacation in Montenegro and revel in its luxuriousness – including Andrew, who has a vacation home there – not many have realized that it also presents some extraordinary investment opportunities.
Considering that it’s come this far in just 15 years (Montenegro regained its independence in 2006), it really is an undiscovered destination for western investors in Europe.
The Montenegrin CBI program was opened in 2019 and will run to the end of 2021. It also has a cap at 2,000 applications, so if you’re interested, you better hurry up.
Still unsure? In this article, we will break Montenegro’s CBI program down and discuss its nuances, so you can make an informed decision.
Citizenship by Investment: The Basics
Before we get to the nitty gritty of Montenegro’s CBI program, we want to get you up to speed with what a CBI program is exactly. If you’re already in the know, feel free to scroll down.
A citizenship by investment program is an instrument that a national government of any country in the world can utilize to raise capital and help their economy develop.
Countries that lack foreign investment, are overly reliant on one or two industries, or simply have no other way to give their citizens a better life, are typically the ones to launch these programs. Currently, about a dozen countries have implemented such a program.
The rules differ per country, but essentially, it’s like buying a passport. You will agree to invest a pre-set amount of money into a country and will be granted citizenship in that country in return.
You will be expected to do one or more of the following:
- Invest in real estate
- Invest in financial assets
- Invest or set up companies and employ locals
- Donate to development funds (in some jurisdictions)
The investment amount is determined by the government, but it is also influenced by what benefits the country has to offer.
For example, Montenegro would never get away with selling their passport for a couple of million euros like Cyprus does, because it doesn’t offer the same benefits.
In recent years, more and more high-net-worth individuals have taken the plunge to obtain citizenship by investment and we expect to see the trend continue to grow.
The offer sure is tempting. If you could invest money to make money and then get an extra passport on top of it, wouldn’t you?
Before we explain why Montenegro is a great proposition, are you one of those people who would first have to ask: “Where is Montenegro?”
There is no shame in that. It’s a tiny slither of a country tucked away in Southeastern Europe and it’s definitely easy to miss.
Montenegro might be small, but it’s got plenty to offer. It has access to the glimmering Adriatic, some of the prettiest mountain landscapes in Europe (featuring ski resorts), historic walled towns, and is well on its way to becoming the next Croatia.
It also has the sex appeal as a tourist destination; one of the world’s most luxurious yachting marinas is located there, called Porto Montenegro.
Up until very recently, the world had no idea Montenegro existed. That’s because it regained its independence only in 2006 after it’s citizens cast a ballot to split up the State Union of Serbia and Montenegro.
Ever since, it has avoided international conflict, become a member of NATO, and it has unilaterally (with no representation in the European Central Bank) adopted the euro as well.
Montenegro is also a leading candidate for EU accession and it has been working hard to integrate EU legislation into its national law too.
It has slowly been fulfilling the criteria that were set out by Brussels, so the general consensus is that Montenegro will be admitted to the union. The soonest that will happen is in 2025.
Then, it’s passport holders will get visa-free access to all Schengen countries. Not only will they be able to travel there, but also settle, work and study in any European country.
The Economy of Montenegro
A huge part of your decision to invest in a country should rely upon its economy. After all, you’re not just looking to gain a passport but make some money in the process too.
Montenegro is a very young country, which has interesting implications for interested investors.
The good news is that despite its difficult past, Montenegro is now one of the fastest growing economies on the Balkan peninsula.
Its GDP grew 4.9% in 2019 and it’s finally making western investors look its way.
Energy and agriculture sectors play a significant role in Montenegro’s economy, but it is tourism that accounts for nearly a third of the country’s GDP.
With a 300 kilometer dramatic coastline and multiple pristine mountainous areas, it’s little wonder that Montenegro attracts over two million visitors per year.
To diminish the reliance on tourism, the government has realized that it pays to be foreign capital friendly and has tried to steer a direct course for political and economic stability.
However, it’s still hindered by two things: widespread corruption and public debt.
Montenegro ranks only 67th out of 180 countries by Transparency International. Plus, it has one of the highest public debt to GDP ratios in South Eastern Europe too, and rising.
We believe that if they stay on track and gain EU membership, Montenegro will eventually deal with its corruption and public debt issues, as other Eastern European countries have.
Ties With Russia
While the western world has been largely oblivious to the fact that Montenegro exists, Russians are active investors there.
If you’re going to invest in Montenegro, you have to keep in mind that you’ll be going up against Russian investors who’ve been working in Montenegro for decades.
For example, over the last decade, investment from Russia came to about a third of Montenegro’s GDP. And that’s not to mention that about a third of all foreign companies in Montenegro are owned by Russian citizens too.
They can often outbuy western investors because they buy more on impulse and less on numbers. In other words, they don’t care about the price per meter if the feeling is right.
In a way, we think that Montenegro’s CBI program was set up for them. Russians are already looking for investments in the country. So, to sweeten the pot, the Montenegrin government has decided to throw in a passport and secure those investments.
No data on the nationalities of applicants has been published yet, so it remains to be seen if Russians make up the majority.
Main Pros of Having a Montenegrin Passport
EU Citizenship Play
If Montenegro joins the EU, this is your cheapest path to eventual EU citizenship.
Lowest Price in Europe
The minimum investment of $350,000 makes Montenegro the cheapest CBI in Europe.
Short Residence Requirement
Spend just 5 days in Montenegro in a 5 year period to renew your passport.
Visit 120+ countries, including the UAE, Macedonia, and Russia.
Montenegro has everything from stunning beaches to forests to ski resorts.
Access to Europe
Utilize Montenegro’s infrastructure to do business throughout Europe.
Montenegro’s Citizenship by Investment Program
Montenegro flirted with having a CBI program back in the mid-2000s. They got a considerable amount of political flack over it and quickly shut the talks down.
Years of debates and discussions followed. If we know anything about the Balkans, it is that things tend to move slowly here.
More concrete rumors about Montenegro’s CBI program were swirling around for the past five years until it was officially announced in July 2018.
Finally, it launched on January 1st, 2019. The difference from other CBI programs is that Montenegro’s has an expiration date – 31st of December 2021.
Within the three years that it will run, only 2,000 people will be able to get a Montenegrin passport.
In this period, it has been estimated by the International Monetary Fund that the CBI program will raise €530 million euro.
“The program will have significant positive effects in generating revenues, primarily through attracting new investments,” they have said.
But that’s not all. The International Monetary fund also estimates that the program will have wider reverberations on the economy, accounting for over 11% of its GDP.
Initially, we felt that Montenegro didn’t offer much to the Nomad Capitalist, but we said the same thing about the Turkish CBI program when it first launched.
Turkey has since turned their program around, as it was a massive flop in the beginning. We expect Montenegro to do the same.
Montenegro’s CBI program will excite high-net-worth investors because of its nearly-EU status. For many, it will be worth the gamble and they will commit to investing €365,000 – the cheapest way by far to buy a European citizenship at the moment.
Finally, there’s also the sex appeal that Montenegro has: luxurious, Mediterranean, safe, and stable. It’s definitely far above the competition in nearby Moldova and Bulgaria.
How Does the Montenegro CBI Program Compare
Usually, countries that offer citizenship by investment programs are remote islands. They don’t really have any other means of growing their economy and raising capital except through tourism and selling their citizenship.
Is the program of this small Balkan country worthy of your money and your time? And, with more than a dozen programs to choose from, how does Montenegro’s program stack up?
First, the total investment required is one of the lowest in Europe. Malta and Cyprus will both set you back considerably more. But if you don’t care about being in Europe, then the Caribbean programs – sometimes at a third of the cost – will make more sense.
One could argue that the real estate available to CBI investors in Montenegro is overpriced, and it is. However, that’s always the case with government-approved lists of projects that foreigners are allowed to take part in.
At some point, you’ll have to bite the bullet to reap the rewards.
Second, passport quality. Access to 120+ countries without a visa sure sounds good, but plenty of other CBI programs offer the same, or better. And for a fraction of the price.
The real attraction of Montenegro is its imminent membership in the EU. That’s why they’ve overpriced their CBI program, hoping that people are willing to pay more on the assumption that they will be full-fledged European Union members rather soon.
Expected to happen in 2025, citizens of Montenegro will then be able to travel, live and work in whichever EU country that they choose.
There are also plans to get visa-free access to China, just like Serbians and Bosnians have done. So, if you do business in China, a Montenegrin passport could be a good addition to your passport portfolio.
Third, the location and the quality of life of Montenegro is great. It might not be an island like most other countries running a CBI program, but in a sense, Montenegro is similar.
Heavily reliant upon tourism, thanks to its natural beauty, the country doesn’t have much other choice but to capitalize on its European location and quality of life.
We’re sure that as the country develops and foreign capital comes in, the economy will develop beyond tourism, energy, and agriculture. So, it’s only a matter of time, unlike many of the Caribbean CBIs, where there is simply no scope for grandiose economic advances.
Plus, Montenegro is well-connected to the rest of Europe. So, if Europe is a focal point for you in terms of doing business, it might make more sense than buying a citizenship in St Lucia, for example.
How to Obtain a Passport From Montenegro
Make a Donation
Donate $100,000 to Montenegro’s government development fund.
Option 1 – Northern Real Estate Investment
Invest $250,000 in the mountainous northern region.
Option 2 – Southern Real Estate Investment
Invest $450,000 in the southern coastal region.
How to Buy a Montenegrin Passport
Most CBI programs out there require you to make one contribution to the country, be it a donation, an investment in real estate, or setting up a local company.
But knowing that EU membership is basically imminent, Montenegro has gone for a hybrid CBI program which requires you to make two contributions:
1. Donate €100,000 to a development fund
2. Purchase government-approved real estate worth €250,000 in northern Montenegro or €450,000 in southern Montenegro, and hold for 5 years
If you’ve fulfilled both, and the due diligence done on you and your family (if applicable) has revealed no cause for concern, you will be granted Montenegrin citizenship and be able to collect a passport.
Note, that there are also governmental fees to pay for your application processing and the amount will depend on your family setup:
- €15,000 for a single applicant
- €25,000 for a couple
- €45,000 for a family of four
- If the main applicant wants to bring dependent parents or grandparents, that will be an additional €50,000 per person
Then, the total outlay for a solo applicant making an investment in the cheaper north comes to €365,000.
A couple investing in the luxurious coastal area will have to shell out €575,000.
The Mandatory Donation
Let’s talk about the donation first. It’s mandatory for all CBI program applicants to make this donation and its amount is firmly set at €100,000.
It’s a fund designated by the government to help underdeveloped areas of the country that would certainly not get foreign investment otherwise. These are mostly rural villages, away from the coastal and ski resorts of the country.
A donation is not unusual when it comes to CBI programs and other jurisdictions. For example, Antigua and Barbuda will ask for the same, only the amounts will differ.
Real Estate Investment
While some CBI programs will allow you to invest in any real estate that you deem suitable, others will make you stick to the officially approved properties, as does Montenegro.
The list of such properties is currently inaccessible on the official website of the program – perhaps the perfect metaphor of the new the program and how inexperienced the government and its officials are in running it.
However, from the few snippets available online, you can only invest in hotels and resorts. For instance, the Queen’s Beach Hotel in the Budva riviera and Hotel Durmitor in the north.
So, while there is a huge stock of cheap investment properties laying around in Montenegro, you’re highly limited if you want to get the passport.
An alternative here would be to buy whichever property you’d like and aim to become a permanent resident.
However, if you’re set on a Montenegrin passport, you’ll need to become the proud owner of an apartment or a condo in a resort of some sort.
Another important thing about investing in Montenegrin real estate is that the CBI program has split the country into two distinct regions – the northern and the southern – and depending on where you want to invest, the amount will differ.
If you want to invest in the highly developed south, essentially the Adriatic coast, you will need to spend €450,000. Meanwhile, if you want to lower your investment, you can make a purchase worth at least €250,000 in the northern part of the country.
There is a VAT of 19% charged in Montenegro, so you will want to invest the bare minimum so as not to add to your total bill too much.
The good news is that the investment is recoupable. In other words, you will be able to sell it after a holding period of five years.
Hopefully, you will also sell at a higher price and offset some of the €100,000 donation too.
The South of Montenegro + Podgorica
The south of Montenegro basically spans the entire coast of 300km. Towns like Budva, Herceg Novi, and Tivat – the entire Bay of Kotor – is where the luxury-dripping villas and yachts filled with champagne are located.
The aforementioned Porto Montenegro, a world-class marina, harbors some of those yachts. And even though the marina is now owned by the Investment Corporation of Dubai, which shelled out $200 million for it, there is still plenty of Adriatic charm left in the old walled villages.
And if you want to invest in the capital of Podgorica instead, you will also need to invest the €450,000 amount.
Real estate is quite liquid in both of these places, so it shouldn’t be a problem to sell and even make a profit. You could also try renting, which will bring an estimated 4-6% annual return.
The North of Montenegro
And then there is the northern part of Montenegro, which is mostly undeveloped.
However, given how pristine the nature of the north is, tourism has also picked up in this region. Lake Skadar, Kolasin and Zabljak are all places where you can invest just €250,000 to obtain a Montenegrin passport.
The town of Zabljak, surrounded by untouched mountains, has plenty of outdoor and extreme sports opportunities.
Tara Canyon – the second deepest canyon in the world – is nearby, part of Durmitor National Park.
Alternatively, you could go for a ski resort in Kolasin or a hotel in the Lake Skadar region.
There is no doubt in our mind that with the growing numbers of tourists and foreign investment, the region will come to life.
The Step-by-Step Application Process
If we’ve got your attention with Montenegro’s CBI program as one of the most competitive in Europe, here’s how you can make it happen.
First, make sure you’re eligible to apply:
- You are not an EU citizen
- You hold a valid passport
- You don’t have any sanctions, restrictions or bans on entry to the EU, the US, the UK, or Canada
- You don’t have a criminal record and aren’t currently being investigated for serious crimes
- You’re able to confirm that your income is legal
- You can verify that the source of the money you’ll use to pay for the investments is legal
- You have an impeccable reputation, both personally and in terms of doing business
- You have a good credit history
- You’re in good health
If you’re eligible to apply for a Montenegrin passport, you’ll be glad to know that it will take 3-6 months to get approved.
All of your dependents can also be added to the application, including spouse, children under the age of 26, as well as your parents if they’re 65 years or older.
The steps that you must take are the following:
1. Go through a preliminary check with your agent. We can help.
2. Gather up all of the required documents and choose which real estate investment project you’d like to go for.
3. Fully pay for the investment and the government fees, and make the donation.
4. Submit your application and wait up to 6 months for an outcome; due diligence will be conducted.
5. Get a certificate of naturalization.
6. Travel to Montenegro to take a citizenship oath and provide your biometric data.
7. Receive your passport; your citizenship is issued for life.
Want to Enjoy Citizenship in Montenegro Like These Nomad Capitalists?
“As a dual citizen, I decided to invest in Kolasin to get the Montenegrin passport. I’m hoping that when it becomes part of the EU, my family can settle in Germany, where I do the majority of my business.”
“Gaining access to the Balkan peninsula has been a really great move for me as an investor. There are so many interesting infrastructure and industrial projects to get involved in.”
“The Nomad Capitalist team has helped me obtain a Montenegrin passport, advising me to invest in a coastal property. Well, it’s already appreciated 10%. This is a great second passport to have.”
The Pros of Montenegro Citizenship
Here are the main pros of obtaining and holding on to your Montenegrin passport.
Access to the United States. Montenegro has signed an E-2 Investor Visa treaty with the United States, allowing Montenegrin passport holders to live and work in the States.
Passport Rank. You’ll get access to 120+ countries visa-free with your Montenegrin passport, including all of Europe’s Schengen Area, Russia, UAE, North Macedonia and Turkey. Once Montenegro joins the EU, the passport rank will grow significantly.
Expected date to join the EU is 2025. Once Montenegro becomes part of the EU, you will be able to live, study and work anywhere within its borders.
The currency is the euro. Montenegro has unilaterally joined the euro zone, so all economic activity within its borders happens in this European currency. This makes the country a bit more expensive than neighboring Serbia, for example, but it also improves its economic stability.
Dual citizenship is allowed. Montenegro is a country that allows dual citizenship, so obtaining your second, third or subsequent passport won’t be a problem. You also won’t have to renounce any other citizenship.
Your information is confidential. If your Montenegrin passport application is approved, the government will not pass any personal information to the country of your first citizenship.
Favorable tax environment. The corporate and personal tax rate is set at a low 9%. The VAT is 19%. There are multiple ways to optimize your tax in Montenegro. It’s also extremely easy to start a business.
The sex appeal. Montenegro is a hyper-popular travel destination and, thanks to its favorable taxes, Montenegro now offers a very efficient and productive environment for investors.
No language or history test. You simply have to apply, make the investment, and obtain your passport. No further commitment is required.
No residency requirement. Unlike other CBI programs, Montenegro doesn’t require you to spend any time living in the country in order to obtain the citizenship.
Connectivity with Europe. Montenegro is highly connected to Europe and all of its major hubs. Direct flights and low-cost airline carriers not only bring business travelers to the country but an ever-growing number of tourists too.
The Cons of Montenegro Citizenship
No CBI program in the world comes without its cons and here are Montenegro’s main pain points.
Corruption is ever-present. As with all post-Soviet countries, Montenegro suffers from corruption. The Corruption Perception Index that is put together by Transparency International has ranked Montenegro as 67th out of 180 countries in the world.
You won’t be able to access the UK or Ireland. If traveling to these countries is important to you and you plan to make Montenegro’s passport your main one, this is definitely something to keep in mind.
The country uses the euro. We’ve included the euro under the list of pros of Montenegrin citizenship, but it can really go both ways. It will totally depend on your situation whether doing business in euros will help or hinder your investor agenda.
High public debt. As we already briefly touched upon, Montenegro harbors one of the highest public debt to GDP ratios in the region. It’s currently around 71%, but is forecasted to increase by 5% when the country has to start repaying its Chinese loan of $1 billion for the highway that will connect the Montenegrin coast with Belgrade, Serbia.
Real estate is overvalued. As with every CBI program where the government runs a pre-approved list of real estate properties that you can invest in, real estate is overpriced. Supposedly, it’s done to ensure real estate deals are legal and transparent, but it’s also an artificial way to inflate prices and charge foreigners a premium.
Montenegro Citizenship by Investment FAQs
Can I travel to the UK visa-free with my Montenegrin passport?
Unfortunately, the UK and Ireland are not part of the Schengen zone, so you are not able to travel visa-free.
Can I live and work anywhere in the EU with a Montenegro passport?
No. You can visit the EU Schengen area visa-free for 90 days in any given 6 month period, but you aren’t allowed to become a resident or work there.
How long does it take to get a Montenegrin passport?
It can take anywhere from 3 to 6 months to obtain your passport. That’s how long the due diligence and application processing takes.
Is there a residency requirement?
No. You aren’t required to visit Montenegro or live in Montenegro to obtain your citizenship. But once you do, you need to spend 5 days in Montenegro over the period of 5 years to retain the citizenship and get your passport extended.
Can my family members also obtain a Montenegrin passport?
Yes, you can add family members to the application. What matters is that they are financially dependent on you. This includes spouses, minor children, parents, and grandparents.
How much do I need to invest to get a Montenegro passport?
The absolute minimum that you need to invest is €350,000. That consists of a €100,000 donation and a €250,000 investment in real estate in the norther regions of the country.
Do I have to visit Montenegro to apply for its citizenship?
You will only need to travel to Montenegro when your application is approved and you need to collect your actual passport.
Your Montenegro Passport
Like other well-meaning governments, Montenegro has launched its citizenship by investment program to attract foreign capital and give its citizens a better life through increased development and economic activity.
But more so than to the government, a CBI program has to be designed and priced just right to make sense for a western high-net-worth individual to engage with.
We feel that Montenegro has struck a near-perfect balance here. The total required investment is slightly more than we’d find optimal, but it is a really good proposition when you consider that the country will soon be part of the European Union.
If you’re a western investor who wants a winter or a summer home, Montenegro’s is not a bad passport to have. And if you’re interested in doing business there, the strategic location, sea access, and pristine nature make Montenegro a great choice for a variety of industries.
The World Bank has named Montenegro as one of the fastest growing economies in the Balkan peninsula. Because it’s such a young economy, there is a lot of investment potential, outside of the CBI program too.
Let’s be honest here. A Montenegrin passport is a B-class passport; you can’t travel to some of the most important countries on earth visa-free, but the tremendous potential is there.
Montenegro has opened up the program for three years. There is no telling if they will renew it, but if they don’t, now is the time to apply to obtain the cheapest European citizenship that’s out there.
Technically, you could apply for the Montenegrin passport today – there is nothing holding you back.
But we’d recommend you discuss your financial situation and long-term goals with the Nomad Capitalist team before taking the leap. We’ve done this before.