Residence and citizenship

States seek to reduce individual freedoms inventing new taxes and regulations almost every day. Add to that the global recession that may come soon, and you’ll understand why having a second passport is practically a must for high-net-worth individuals.

Some CBIs are well-known, such as St. Kitts and Nevis, which was the first, and Malta and Cyprus, who are both EU members and, thus, have two of the most successful CBI and RBI program.

And here comes Montenegro. This open-to-business, breathtaking Balkan country started a CBI program in 2018 for a period of three years, seeking to give the Montenegrin passport to 2000 high-net-worth individuals willing to develop the touristic sector of the country.

The government tried to begin two failed CBI in 2010 and 2014 that were criticized around the world, as the due diligence was insufficient, leading many alleged criminals and corrupt politicians to try to acquire the passport. However, in 2018, the government successfully launched the program with better background checks. The firsts to receive their passports under the Montenegro CBI were an Egyptian family in February 2020.

Aside from that, what if we told you the Montenegrin program has the best tax optimization potential among the European CBIs and requires a way smaller investment among them?

You may say: well, but Montenegro isn’t an EU member. That’s true, but you’d only have to wait a few years (2025) for that to become a reality.

Now you understand why we say Montenegro is one of Europe’s best-kept secrets?

Let’s talk about the benefits you can obtain from your Montenegrin passport, especially if you’re a Latin American investor seeking to protect your assets.

A robust passport with full EU access: 

Montenegro has the 42nd best passport on the planet. It gives you visa-free access to more than 120 countries. The Montenegrin passport is better than the Russian, Chinese, and many Latin American passports. Furthermore, it allows visa-free travel across the Schengen Zone and, possibly, from 2025, will let you move and invest freely all over the European Union.

A gorgeous, socialism-free country: 

Montenegro is recognized for its natural attractiveness and its calm atmosphere, perfect for relaxing. It has a rising foreign community full of investors and high-net-worth individuals and natural and architectonical wonders akin to those of Greece. However, you have to subtract the statism, looming socialism, poverty, and the refugee crisis of their southern neighbors. Montenegro has some of the most magnificent sights in the Mediterranean, a mild climate, and a low cost of living.

A thriving economy: 

The country still has to take some steps to have an entirely free economy, but it has made some thoughtful reforms. The country is considered the 91st freest economy in the world, per the 2020 Index of Economic Freedom. That is a modest result but has improved noticeably in the last few years. Moreover, the country has a nonstop GDP growth, healthy trade, business, labor, and monetary freedom, and tax burden ratings in the index, and noteworthy advances in government integrity, property rights, and fiscal health.

Remarkable investment return potential:

Montenegro has seen a surge of FDI, which has been echoed in the real estate market. That means the property you invest in has a return potential of around 4 and 8 %, one of the uppermost around Europe. Even better: Real estate capital gains are taxed at a meager 9 %, which is way lower than most European countries.

The Montenegrin CBI is one of the few that lets you earn profits from your investment almost instantly. The acquired real estate can be rented out to tourists. Thus, you'll get passive income and reduce the net cost of your application in the five years you must keep the property.

Compare that to, for example, the Cypriot CBI, where you must keep a €500k residential property of a total €2m investment that you’re forced to keep forever, and you'll see the difference.

Few requirements, rapid process, and includes your family: Both the spouse and financially dependent children can acquire the passport with the main applicant. Similarly, the program has only a handful of requirements: you don't have to live in Montenegro before or after the process, and most of it can be done without you being physically present. You only must go to Montenegro for a biometric scan and get your passport. That means there are no language tests, and you don't need to quit your primary citizenship.

Lastly, the process is quick. It can be conducted thoroughly in as little as three months.

Malta's cost with Cyprus' taxes: 

The leading advantage of Malta's citizenship by investment is its cost. It's way less than the €2m of the Cyprus program. The main benefits of the Cyprus program are tax optimization and investment possibilities. 

Montenegro has both. 

It costs around €250k and €450k depending on the investment you choose with robust investment return and many other investment chances in tourism and infrastructure.

There are many different paths towards the Montenegrin residency, and the citizenship by investment program has gained plenty of attention from investors around the globe. Let’s discuss both possibilities but starting from the residency permit.

Residency in Montenegro 

There are many ways to get a residency permit in Montenegro. One of the most used is registering a company. Under the Montenegrin law, the authorized capital may be a mere €1. We’ll discuss how to open a business in Montenegro further in the report.

You and your family can get a residence permit if you register a company in Montenegro and will allow you to live and work in the country all year and offers a path towards permanent residence and citizenship. Likewise, if you obtain a residence permit and spend 183 days in a calendar year in Montenegro, you’ll qualify as a tax resident and will benefit from the incredible tax rates Montenegro offers.

The other path towards obtaining a residence permit in Montenegro is buying real estate. Foreigners don’t have any limitations regarding this path. You can extend the permit annually and can get it if you buy houses, apartments, companies, hotels, restaurants, and seasonal homes, no matter their value. However, this path won’t lead to permanent residence.

These are the documents to apply for residence in both cases:

That means the only difference lies in what you should prove: real estate ownership or company ownership. Now, if you follow the company ownership path, it will offer you a way towards permanent residence. That status gives you all the rights of a Montenegrin citizen, except for voting. To obtain it, you must live in the country as a temporary resident for five years and never been outside the country for six consecutive months. Afterward, you can apply for citizenship, having lived in Montenegro as a permanent resident for five years.

Citizenship by investment 

Now, we can talk about what may interest you the most: the CBI program. The two best-known CBI programs are Cyprus and Malta. But what if we told you the Montenegrin program has better tax optimization benefits than Cyprus and entails a smaller investment than both Cyprus and Malta? As Montenegro will likely join the EU in 2025, the passport will also have the benefit of allowing you to invest, live, and work across the EU with total freedom.

Now, we can discuss the requirements. You must consider the following: