Montenegro’s cooperation agreement with the United Arab Emirates is set to be reviewed by the Constitutional Court on October 19, raising legal questions that could significantly impact tourism and real estate investments. Ratified by parliament on June 3, 2025, the agreement establishes a framework for economic and investment collaboration between the two nations.
The legal challenges surrounding this agreement center on whether it should have been approved by a two-thirds majority in parliament, as certain aspects of the framework may influence property acquisition and usage by foreign investors. The court previously addressed this issue in March 2026 but reached a deadlock with a split decision of three votes to three, preventing a comprehensive constitutional review.
With the recent appointment of additional judges, the court now comprises seven members, enabling a potential reconsideration of the matter with a full bench. However, the upcoming session does not automatically decide on the constitutionality of the agreement itself; rather, it will determine if a formal constitutional review process should commence.
This distinction holds significance for investors, as a decision to initiate a review would introduce further legal uncertainty but would not immediately revoke existing rights or disrupt ongoing projects. The case is particularly crucial given Montenegro’s efforts to attract substantial Gulf investments in sectors such as tourism, real estate, and strategic infrastructure.
Investment agreements between nations can enhance political backing and expedite project development; however, they must still adhere to constitutional, property, and procurement regulations. The outcome of this case could influence how Montenegro approaches future bilateral investment agreements.
For lenders and developers, the primary concern remains the legal stability of such frameworks. Large-scale tourism and real estate projects often require extended development timelines, intricate land arrangements, and considerable financing commitments. Any ambiguity regarding the legal foundation of these investments can complicate financing strategies, asset valuation, and due diligence processes.
The implications extend beyond just UAE investors. Montenegro is actively seeking to attract larger international stakeholders while also aligning its legal and regulatory frameworks with European Union standards. Consequently, the Constitutional Court’s ruling will serve as an important indicator of how Montenegro reconciles its ambitious investment goals with domestic constitutional protections.
Until a ruling is issued, the agreement will remain valid, and the October 19 hearing should be regarded as a procedural event that presents legal risks rather than an indication that UAE-backed investments have been halted.
