Montenegro: New Montenegrin Law Seeks To Modernise The Tourism And Hospitality Industry

On 29 December 2017, the Montenegrin parliament adopted a new Law on Tourism and Hospitality (the "Law"), which entered into force on 18 January 2018.

The Law aims, among other things, to bring the quality of tourism and hospitality services in line with contemporary trends in order to position Montenegro as an exclusive tourist destination, to implement EU standards and to harmonise national laws with EU law.

Below is an overview of the main changes introduced by the Law in the hospitality sector.

1. Advertisement and promotion of the tourism and hospitality industry

For the first time in Montenegro, the Law introduced the rule that only properly licensed tourist/hospitality businesses can be advertised and promoted. Such advertising and promotion includes electronic and printed media, digital platforms (such as, Airbnb, TripAdvisor and others), social networks or any other means of communication. The law further stipulates a list of documents which have to be disclosed before the tourist or hospitality business can be advertised or promoted.

Failure to comply with these conditions is a misdemeanour punishable by a fine, and under certain circumstances, by the imposition of an interim measure – prohibition of the business activity for up to six months.

The Law also introduces the mandatory use of a quick response (QR) code – a matrix code that stores addresses and other information enabling quick electronic use and access to data in promotion of tourist/hospitality business activities.

The above aims to improve transparency and competition among all entities in the tourism and hospitality sector that comply with the law, while deterring those that do not.

2. Hospitality sector

The new Law now focuses on the regulation of exclusive hospitality facilities, recognised as having great investment potential in Montenegro. Thus, several novelties have been introduced in this sector.

2.1. Facilitating the commencement of hospitality business

In order to facilitate new hospitality businesses, in addition to obtaining approval from the competent authority, the Law introduced the possibility of registration in the Central Tourism Register. This is done by submitting an application and accompanying documents to the Central Tourism Register. In this case, control over the commencement of the business activity is shifted to the hospitality provider.

2.2. Operation of foreign entities

The Law clarifies that foreign legal or natural persons may perform hospitality business activities provided that they have established a presence in Montenegro through a foreign company branch and comply with other legal requirements.

2.3. Primary hospitality facilities

As the main goal is to attract investment in exclusive hospitality facilities, the lawmaker regulated this area in more detail:

  • Hotel operating models

    Under the previous regulation, "condo" and "mixed use" were recognised as a type of hotel. The new Law has turned "condo" and "mixed use" into operating models.

    The condo operating model may be implemented within a five-star hotel in a coastal region or in the capital, or within a four-star hotel in the north and central regions that has to operate for at least 12 months a year. Accommodation units within a condo hotel intended to be sold have to be in commercial operation for at least 10 months a year and each unit is subject to individual sale.

    A mixed operating model may be implemented within a five-star hotel with a capacity of at least 120 accommodation units in a coastal region or the capital, or within a four-star hotel with a capacity of at least 60 accommodation units in the north and central regions. The hotel can offer for sale a maximum of 50% (or in exceptional circumstances 60%) of total accommodation units.

    Both models, among other things: (i) stipulate that obtaining the proper licence for provision of hospitality services is a condition for inscription of the ownership rights over sold units; (ii) require the existence of a management agreement [further described under Management Agreement].

    The main difference between the two models is that the lease of accommodation units within a mixed operating model is not mandatory but at the discretion of the owner (voluntary rental pool), while the condo model introduces a mandatory rental pool.

    Other conditions for using one of the two models are regulated in detail by the Law.

    It may be deemed that the introduction of operating models instead of hotel types creates more flexibility for investors, given that the model can be determined at a later stage and not in the construction phase, while complying with the requirements of the determined operating model.

  • Management agreement

    Unlike the previous regulations, the Law now explicitly regulates the management and maintenance of hotels operating under the condo or mixed operating model.

    The Law introduces a management and maintenance agreement. The elements and time limitations for the conclusion of such an agreement per year are regulated by the Law.

    If unit owners do not conclude a management agreement, it may lead to the nullity of the agreement on sale of the unit within the condo or mixed use operating model.

  • Change of operating model

    One- and two-star hotels having a permit for the provision of hospitality services are entitled to change their operating model to the condo or mixed model if they upgrade to four- or five-star status. The law makes no mention of three-star hotels.

  • Tourist resorts

    The most exclusive hospitality facilities under the Law are tourist resorts, which must be constructed on land having a surface area of 5 to 150 hectares. A tourist resort is comprised of at least one hotel with a capacity of at least 120 five-star accommodation units in a coastal region or a four-star hotel in the north and central regions with at least 60 accommodation units, containing offerings such as wellness centres, restaurants, golf courses, marinas, sport fields, skiing and/or other tourist infrastructure and superstructures operated by one or more legal entities. The tourist resort is ranked as a unique high-quality tourist product, which must operate 12 months a year.

  • Mystery guest

    The mystery guest programme was introduced as a means of quality control and may consist of an individual or a legal entity chosen by the Ministry of Sustainable Development and Tourism to objectively measure the criteria that all four- and five-star hotels must fulfil. The mystery guest has to spend at least 24 hours in the hotel, without disclosing his purpose, and make an evaluation.

3. Tourism development incentives and tourism development zones

With the aim of improving the tourist offering and the development of Montenegrin tourism, the lawmaker envisaged:

  1. the adoption by the Government of Montenegro of an incentives programme to encourage the construction of tourist infrastructure and superstructure, upgrade existing tourist products, improve knowledge and skills in tourism, increase tourism revenue, and more efficiently promote tourist destinations;
  2. the creation of tourism development zones;
  3. the provision of tourism and hospitality businesses in tourist zones as an activity qualifying for state incentives in accordance with the law on state aid.

The beneficiaries of the incentives can be legal or natural persons who operate tourist and/or hospitality businesses or activities connected with tourism and hospitality services.

4. Harmonisation with the Law

Companies and other legal and natural persons:

  1. must harmonise their business with the Law within 24 months as of its entry into force;
  2. operating tourist or hospitality businesses in an illegal facility must commence the legalisation process and provide proof thereof, otherwise their business licence will be withdrawn.
  3. holding a construction permit or that have submitted documentation for the commencement of the construction of a condo hotel according to the previous regulation must obtain a business licence for hospitality activities within 36 months as of the entry into force of the Law.

5. Adoption of bylaws

The lawmaker determined that bylaws will be adopted within one year as of the entry into force of the Law. Until then, the existing bylaws remain valid.

As the new Law introduces many changes, it remains to be seen how they will be adopted and implemented in practice.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions