Montenegro is set to introduce a comprehensive screening system for foreign investments, addressing a regulatory void that has permitted politically sensitive projects and opaque ownership structures to enter key sectors without thorough security assessments. The government has proposed a model for a Law on the Screening of Foreign Investments, with the Ministry of Economic Development taking a central role in the evaluation process.
This new framework marks a significant shift from Montenegro’s historically open investment policies, which have relied heavily on foreign capital since the country regained independence in 2006. Investments have primarily financed tourism, coastal development, energy projects, and infrastructure. However, the absence of a mechanism to scrutinize the ultimate control and origin of these investments has raised concerns about national security.
Currently, Montenegro employs various separate controls through existing legislation across sectors such as banking, defense, energy, and environmental protection. While these frameworks assess different aspects of transactions, they do not provide a unified evaluation of national-security risks associated with foreign investments.
The proposed screening law comes as Montenegro aims for potential EU membership by 2028. In June 2026, the EU adopted enhanced regulations requiring member states to implement national review mechanisms for foreign investments involving strategic assets. This timeline aligns closely with Montenegro’s accession goals, necessitating compliance with EU standards.
The European regulations encompass investments in defense goods, advanced technologies, and critical infrastructure. They also allow member states to include additional sectors pertinent to their unique economic and security contexts. For Montenegro, simply mirroring the EU list may overlook significant local assets in tourism and property development, which hold strategic importance along its 293 kilometers of coastline.
The Centre for Democratic Transition (CDT) has suggested that the new law should specifically address strategically located tourism and property developments while avoiding an overly broad application that could hinder ordinary commercial transactions. This approach would enable the government to identify what constitutes a strategic investment before engaging with potential investors.
A crucial aspect of this initiative involves projects developed through bilateral agreements or special legal arrangements. Montenegro’s largest developments often utilize these frameworks, raising questions about whether such agreements would fall under the new screening law’s purview. Under Article 9 of the Constitution, international treaties take precedence over national laws when they differ in regulation.
The experience with the Bar–Boljare motorway, constructed by China Road and Bridge Corporation with substantial financing from China’s Exim Bank, highlights potential risks associated with large-scale projects not subjected to rigorous investment screening. This project has increased public debt and raised concerns regarding long-term financial obligations.
The proposed law will need to address how it applies to investments made through bilateral agreements while ensuring that state-sponsored projects are not exempt from scrutiny. A credible screening system would assess ownership structures and geopolitical implications rather than categorically prohibiting investments based solely on their origin.
Montenegro’s recent agreements with the United Arab Emirates, covering economic cooperation and tourism development, exemplify the challenges ahead. These agreements faced criticism regarding state asset allocation without competitive tenders and their constitutional validity remains under scrutiny.
The effectiveness of the foreign-investment screening law hinges on its ability to encompass all relevant projects while maintaining clarity in its application process. A transparent mechanism could ultimately enhance investor confidence by demonstrating due diligence in assessing ownership and security risks prior to capital commitments.
As Montenegro navigates this regulatory transition, it must balance attracting foreign investment while ensuring that capital flows contribute positively to its economy without compromising national interests. The upcoming law will play a pivotal role in defining the framework within which future investments are evaluated and approved.
