Montenegro – A small nation which packs a punch

10.05.18

Montenegro is emerging as an international tourism hotspot, making it an excellent choice for investment. Stephen Penn finds out more

It’s one of the fastest growing economies in terms of tourism capital investment, and this is set to grow exponentially over the next ten years. The World Travel and Tourism Commission predict big things for Montenegro in the coming years, and one key factor in this, is the development of Luštica Bay.

So what are the reasons behind this surge in tourism and what makes this small country tick?

 A Growing Tourism Economy

Tourism currently accounts for around 22% of GDP (direct and indirect) and this is expected to grow to around 31% by 2027. Tourism arrivals and overnights have experienced a compound annual growth rate of around 7% during the period 2007 – 2016, with over 1.8 million arrivals in 2016.

Taxation

Montenegro operates a highly competitive tax system. The Corporate Income Tax, which is a flat 9%, is the lowest in the Central and South Eastern European region. Personal income tax ranges between 9% and 11%. Montenegro implements a value added tax (VAT).

The VAT rate amounts to 21%, with the implementation of a lower rate of 7% on some categories of products and services, including the tourism sector. When you purchase a property from the developer, there is currently no real estate transfer tax applicable (it is 3% in other cases).

The New Foreigners Act allows the foreigners who own real estate in Montenegro to obtain a residence permit for a period of one year that is renewable. The value of the purchased property does not play any role in granting the residence permit.

Safety & Stability

Achieving independence in 2006, Montenegro is a constitutional democracy. With lofty ambitions, Montenegro is seeking integration into the European Union by around 2022, and is the most recent addition to the NATO strategic security alliance. Montenegro has adopted the Euro as its currency.

Renowned Town Developer

The company behind the development of Luštica Bay is a member of the Orascom Development Holding (ODH) A.G., one of the largest corporate groups in the MENA region. ODH is a leading developer of new towns, creating truly self-sufficient, international communities.

ODH is currently present in nine countries across three continents, among them: Egypt, UAE, Oman, Switzerland, Morocco and Montenegro. The company’s hotel portfolio encompasses 35 hotels with more than 7800 rooms.

Location & Community

Luštica Bay is a master planned, fully integrated touristic resort town with an estimated investment value of more than 1.1 billion euros. The master plan envisages a total of 7 hotels of 4 and 5 star standard, in excess of 1000 residential apartment and over 500 villas and townhomes.

The site will also play host to wellness and spa centres, two state-of-the art marinas with mooring and docking support facilities, an 18-hole golf course with clubhouse, multiple beaches, and a 4.9 long coastal boardwalk.

Also key facilities will be conference and business centres, various sport courts, in excess of 6000 square metres of restaurants, shops and commercial spaces, a school, medical facilities, administrative and management offices and emergency services including police and fire department.  At full build out, Luštica Bay is expected to support a peak population of around 10,000 inhabitants.

All of these factors combined show that Montenegro is a nation on the rise, and the time to strike is now. To find out more about Luštica Bay investment opportunities visit www.lusticabay.com

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