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Geographic Location

Geographic Location. The Republic of Montenegro is located in Southeastern Europe. It has a coast on the Adriatic Sea to the south, and borders Croatia on the west, Bosnia and Herzegovina on the northwest, Serbia on the northeast and Albania on the southeast .

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Geographic Location

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  1. Geographic Location • The Republic of Montenegro is located in Southeastern Europe. It has a coast on the Adriatic Sea to the south, and borders Croatia on the west, Bosnia and Herzegovina on the northwest, Serbia on the northeast and Albania on the southeast. • Montenegro became an independent country on May 21st2006 by democratic referendum and declared independence on June 3rd 2006. It has been since recognized by the five permanent members of the United Nations Security Council.

  2. Montenegro from touristic perspective

  3. Economic Perspective GDP The gross domestic product has shown an upward trend for the last several years. The last two years have shown significant increase in growth. The Central Bank of Montenegro reported €1,829 million GDP for 2006 and €755 Million for the first six months of 2007. Inflation The inflation rate indicators have shown a stable, low inflation economy.

  4. Economic Perspective Unemployment Although Montenegro suffered from a high unemployment rate for several years, the last two years have seen the unemployment rate fall to an acceptable level. Foreign Direct Investment FDI is attracting higher than expected In 2006, total Foreign direct investment amounted to €502 million, up 31% compared to 2005. (amount and growth rate chart)

  5. GoM’s economic reform agenda • The Economic Reform Agenda is a comprehensive four year plan adopted by the Government of Montenegro aimed achieving the following goals: • Economic growth, with emphasis on the private sector by promoting • Entrepreneurship • Investment • Competitiveness and competition • Job creation • EU compatibility of legislation and processes • Valorization of Montenegro’s potential, particularly in areas that represent comparative advantages • Improvements in the standard of living by improving the educational and health system and a sustainable social security system • Protection of the environment

  6. Banks and Taxes Banks In November 2006, the last Montenegrin bank with state owned capital was privatized. Montenegro entered 2007 with a completely privatized banking sector which consists of eleven banks. In 2006, the Montenegrin banking sector provided €357 Million in loans to legal entities. 60% of those loans were approved on a one year term structure. The banking sector continues to grow at healthy rate as well as the amount of loans provided to individuals and legal entities Taxes Montenegro established a tax system that would reduce costs while stimulating investment and growth Montenegro’s tax is regime is one of the most competitive in Europe with a corporate profit tax of 9% The VAT law is based on EU guidelines; a standard tax rate of 17%, a reduced rate of 7% for the tourism sector, and 0% for export transactions.

  7. CEFTA and the EU • The Central European Free Trade Agreement is a free market consisting of 9 Eastern European countries and was ratified in May of 2007 • CEFTA gives Montenegro trade access to a huge market within the members of the agreement and the EU • The CEFTA agreement has historically been a preparation for full EU membership • Montenegro is a member and complying with the regulations of international institutions such as the IMF, World Bank, WTO. CEFTA members, now EU CEFTA members

  8. Investment Climate • Montenegro’s government views foreign capital as vital to the restructuring of the real estate sector and Tourism and have fully expressed their commitment to remove barriers and facilitate investment. The government has reformed a wide body of laws to improve the overall business regulatory environment and thereby enable private sector companies to grow and to compete. • There is no limit of amount of invested capital. Foreign investors are allowed to invest in any industry and freely transfer all financial and other assets, including profits and dividends. • Foreign investors can acquire rights to real estate, such as company facilities, place of business, apartments, living space or construction land. All major national and international investment insurance companies insure investment projects in Montenegro.

  9. Real Estate in Montenegro • The real estate investment opportunities are very attractive due to high demand created by foreigners, mostly Europeans, who seek Montenegrin Property and Montenegrins who see property as a more profitable investment vehicle than banks. • Over the last three years: • The price of flats has increased by 75%. • The price of houses has increased by 91% • The price of business space has increased by 78% • The price of land has increased by 140% • This significant increase rate in real estate value is projected to continue for the next few years • The land laws of Montenegro give foreign investors equal status with Montenegrin investors, with full deeds and title to land and real estate.

  10. Tourism in Montenegro • Montenegro is beautiful and rich with 293 Km coasts and 73 Km of beaches • For the forth consecutive year, Montenegro has ranked by WTTC among the world top 3 destinations • In 2005, Montenegro hosted almost 300,000 tourists, most of them from EU countries. This number has increased significantly every year since. • Currently the number of tourists visiting Montenegro is increasing at a rate of 17% per year and it is one of the top 10 holiday destinations in the world. • Travel and tourism will generate €1,488.7 billion in total as the contribution of travel and tourism to GDP will amount to 22.1% or € 698.0mil • The Montenegro government plans to turn Montenegro into a first class destination for discerning tourists rather than a budget holiday hotspot for those seeking a cheap getaway. • By 2014 Montenegro is expected to become the fastest growing tourist destination in the world. • In 2001 the government created the “Tourist Master Plan” which maps out the long-term national strategy up to 2020. In bays up and down the coast, new marinas and resorts are planned that will incorporate million dollar luxury golf courses and hotel complexes. • Number of jobs will increase to 36,900, or 23.7% of total employment.

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