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 April 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:
- 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)
- Proof of mandatory health insurance issued by a local insurance company
- Copy of passport (passport has to be valid for the full duration of the granted residency)
- Statement of Clear Criminal Record issued by the relevant institution in the country of origin, translated into Montenegrin language
- 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.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.