Montenegro plans to adopt a law on foreign investment screening that will cover investors from countries outside the European Union. It will introduce, for the first time, a formal screening mechanism for investments in strategically important sectors of the economy, including energy.
Companies registered in the EU or Montenegro will also be subject to scrutiny if they are controlled by capital from third countries, Vijesti reported.
In late July, the Government of Montenegro adopted a proposal to establish an effective mechanism for foreign direct investment screening, prepared by the Ministry of Economic Development.
A screening mechanism for foreign direct investment should help strengthen Montenegro’s economic security
The move lays the groundwork for adopting Montenegro’s first comprehensive law in this area, the government said.
The adoption of the proposal to establish an effective mechanism for screening foreign direct investment represents an important step toward strengthening Montenegro’s economic security, the government said. It reiterates the country’s commitment to building a stable and competitive framework for attracting investment, in line with European standards, it added.
The screening mechanism will be triggered in all cases where a foreign partner acquires at least 10% of ownership or voting rights, or gains a dominant influence over the operations of a domestic company in sensitive sectors.
In addition to the energy sector, the new rules will apply to investments in transportation, ports, airports, telecommunications, banking, healthcare, media, and defense.
Transactions involving water supply systems, agricultural land, food production, artificial intelligence, and the handling of sensitive personal data will also be subject to screening.
Investors will be required to provide detailed information in advance
Investors will be required to provide detailed information on their beneficial owners, the source of funds, and business plans before a transaction. The ministry will conduct an initial assessment within 45 days.
If potential risks are identified, a detailed investigation will be launched, including into any links between the investor and foreign governments or past security threats.
The Ministry of Economic Development will be responsible for conducting the screening procedure, with support from a new interinstitutional council comprising representatives of key ministries and security agencies.
The government will have a final say in approving, imposing conditions on, or prohibiting an investment
The council will also determine whether investors are under international sanctions. The final decision to approve, impose conditions on, or prohibit an investment will be made by the Government of Montenegro, but based on the ministry’s proposal and the council’s opinion.
Authorities emphasize that the new regulation does not aim to close the door to foreign capital, but to protect national interests in line with EU practices and legislation.
Investors whose applications are rejected will have the right to seek judicial review through administrative proceedings, while all business information obtained during the process will be kept strictly confidential.
