Montenegro is considering the revival of its economic citizenship program, a move that experts believe could provide significant economic benefits. The recent ruling by the European Court of Justice affirming Malta’s right to continue its citizenship by investment program has sparked renewed interest in such schemes, highlighting the potential for countries like Montenegro to use this tool to attract foreign investments, stimulate economic growth, and avoid increasing public debt.
Attracting high-profile investors
Stefan Kraus, Chief Operating Officer at Henley & Partners, argues that relaunching the economic citizenship program could bring a substantial influx of capital to Montenegro. This would directly support key sectors like tourism and infrastructure, contributing to long-term economic growth without adding to the country’s debt.
“The EU’s decision reaffirms Montenegro’s sovereign right to grant citizenship. By reintroducing this program with stringent vetting, Montenegro can attract high-profile investors,” said Kraus. Such a program would require thorough applicant checks to ensure the credibility and security of those seeking citizenship through investment.
Economic impact beyond investment
Vedrana Šašović, Executive Director of Amma Resort and InterContinental Hotels, also supports the idea, noting that the program could have a far-reaching impact on the country’s economy. “Economic citizenship not only attracts foreign investment but directly strengthens tourism, enhances infrastructure, and creates new jobs, all of which contribute to sustainable economic development,” Šašović said.
According to Kraus, the previous program had already generated €500 million in foreign investments, primarily in the tourism sector, by funding the construction of high-end hotels across Montenegro. He estimates that a new program could bring in an additional €500 million from 1,000 new investors, further boosting key industries like tourism and infrastructure.
A path to growth without increasing debt
Kraus highlights that the economic citizenship program offers Montenegro an opportunity to grow its economy without relying on borrowing. “The program can bring in significant revenue without adding to public debt, something many smaller nations find attractive,” he explained. By issuing up to 2,000 citizenships, Montenegro could secure another €500 million in investments, without increasing its fiscal obligations.
Rigorous applicant vetting
One of the key elements of a successful economic citizenship program is the thorough vetting of applicants. Kraus emphasized the importance of a strict due diligence process to ensure that applicants meet high standards of integrity. This approach differentiates investment citizenship programs from honorary citizenships, offering greater security for both the country and the European Union.
Long-term economic benefits
Kraus points out that the economic impact of such a program goes beyond the immediate inflow of capital. Investments generated through the program contribute to the country’s GDP growth, job creation, and overall economic development. In fact, Kraus believes that Montenegro’s GDP could increase by 20-25% through a well-executed economic citizenship program. Similar programs in other countries, like Saint Kitts, have boosted their GDP by as much as 30%.
Malta, since launching its own economic citizenship program, has attracted over €1.5 billion in foreign direct investment, illustrating the potential for such programs to drive national economic development without relying on debt.
Future prospects for Montenegro
If Montenegro decides to revive its economic citizenship program, Kraus estimates that with an effective marketing campaign, the country could secure 1,000 applications over the next two to three years, resulting in an additional €500 million in investments.
Vedrana Šašović agrees, noting that such a program not only attracts foreign investors but also helps create a strong foundation for sustainable growth in Montenegro’s tourism and infrastructure sectors.
Conclusion
Economic citizenship is an increasingly important tool for attracting foreign capital, and Montenegro stands to benefit from reviving its program. With proper controls and a focus on high-profile investors, the country could see substantial growth in key sectors such as tourism and infrastructure, without the need to increase national debt. The potential for economic growth, job creation, and enhanced infrastructure makes it an attractive option for Montenegro’s future prosperity.
