Banks

Reasons to invest in Montenegro

Montenegro has the potential to become a magnet for investment because of its business-focused economic system. It enjoys great economic freedom and monetary stability.

The Government's privatization policy has attracted many foreign investors.

Pursuant to the Foreign Investment Law, there is a real equal treatment between Montenegrin and foreign investors in the country. The Government has established many customs and fiscal incentive measures.

Montenegro ranks 42nd out of 190 economies in terms of ease of doing business, according to the 2018 World Bank Doing Business Report.

The sectors attracting most of the FDI are tourism, real estate, energy, telecommunications, banking sector and construction.

The main investing countries are EU members, Russian Federation, Egypt etc.

Country attracts a lot of foreign investors for the following reasons:

  • foreign companies have the same rights as national companies;
  • the tax system is one of the most competitive in Europe;
  • the workforce is qualified and wages are relatively low;
  • the Euro is the national currency;
  • formalities for creating a company are simple and quick;
  • it is a stable democratic NATO country;
  • it is a step away from the EU membership. 

Introduction to the process of formation of a commercial bank

Purpose of this site is to provide the basic information with respect to procedure of formation of a commercial bank in Montenegro (start-up).

In Montenegro, formation, management, operations and supervision of banks and micro-credit financial institutions and credit unions, and supervision of operations of parties involved in credit and guarantee operations are regulated with the Banking Law.

A commercial banks are allowed to perform the following banking operations:

  • Issue guarantees and assume other off balance sheet obligations.
  • Purchase, sell and collect claims (factoring, forfeiting, etc.).
  • Issue, process and record payment instruments.
  • Domestic and foreign payment operations pursuant to the regulations governing the payment system financial leasing.
  • Operations with securities in accordance with the law governing the securities.
  • Trade on its own behalf and for its own account or for the client’s account with foreign payment funds, including exchange operations and financial derivatives.
  • Safe keeping operations.
  • Development of analysis and giving of information and advice on creditworthiness of legal persons and entrepreneurs, and on other issues with respect to the business operations.
  • Offering safe deposit boxes.
  • Activities that are part of banking operations, activities that are of ancillary nature in relation to the operations of that bank, and other activities directly related to the operations of that bank in accordance with the bank bylaws.

The bank may also perform, with the prior approval of the CBoM, other operations in accordance with the Banking Law.

Process of formation of a bank in Montenegro is controlled by the Central bank of Montenegro (the CBoM).

For the purpose of understanding of the subject matter, process can be observed throughout the following phases:

  • Obtaining of a banking license, by means of participating in the administrative proceeding before the CBoM.
  • Incorporation and registration of the bank, by means of creation of the legal entity in a form of a joint stock company.
  • Corporate governance setting up, by means of creation of a legal environment for lawful start of the business operations.
  • Business operations start-up, by means of performing of inland and international payments, accepting of deposits, extending of loans etc.
  • Risk management system creation, by means of designing of documentary infrastructure, implementation of regulations, measuring of respective risks etc.