In recent years, the rate of real estate purchases by foreigners has been growing rapidly in Montenegro, with many non-residents acquiring property, particularly on the Adriatic Riviera. However, such property investments did not – until now – allow for the acquisition of a temporary residence permit.
In accordance with the Law on Foreigners applicable as of Aprils 2015 the Government of Montenegro, in November 2015, adopted a Decree in regards to determining the type and value of real estate owned by a foreigner.
According to the above-mentioned Law and Decree, a foreigner who owns real estate on the territory of Montenegro is able to obtain a temporary Montenegrin residence permit, provided that the property in question is an apartment, house, condo, hotel or a restaurant. There are no limitations in relation to the value or size of the property.
Obtaining a residence permit allows foreigners to also become tax residents of Montenegro with the condition that they spend 183 days in a calendar year in Montenegro, and to enjoy one of the most favorable tax regimes in Europe with 9% personal income tax rate and 9% corporate tax rate.
The documents required as supporting documentation to an application for a temporary residency include:
1.Proof of sufficient funds for financing the basic needs of the applicant at a level of EUR 10 per day (i.e. a bank statement testifying that there is at least EUR 3.650 on the account)
2.Proof of mandatory health insurance issued by a local insurance company
3.Copy of passport (passport has to be valid for the full duration of the granted residency)
4.Statement of Clear Criminal Record issued by the relevant institution in the country of origin, translated into Montenegrin language
5.Cadastre Extract (Certificate of Ownership of the immovable property)
The residence permit based on ownership of the real estate shall be issued for a period of one year and can be further extended.
This type of residence permit does not give a foreigner the right to work in Montenegro.
Beyond allowing non-residents to obtain temporary tax residence on the basis of property ownership, the changes in the legislation are also expected to have a considerable impact on the real estate market in Montenegro.
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