Overview
On 30 July 2026, the Government of Montenegro adopted the Proposal for an Effective FDI Screening Mechanism (the “Proposal”), prepared by the Ministry of Economic Development (the “Ministry”). The Proposal is intended to form the basis for a new standalone law and implementing legislation that introduces an FDI screening regime modelled on, and broadly aligned with, the FDI screening frameworks established across the EU.
This would represent a significant change to Montenegro’s investment control framework. Montenegro currently has no comprehensive mechanism for screening foreign investments, apart from limited rules concerning investments in the arms and defence industry. The proposed regime would introduce a broader review mechanism focused on national security and public order.
Who and what would be covered?
The regime would apply to investors from non-EU countries, as well as to Montenegrin or EU undertakings controlled by third-country investors.
A notification could be required where an investor acquires control, significant influence or at least 10% of the ownership interest or voting rights in an undertaking operating in a covered sector. The proposed threshold, therefore, extends beyond traditional change-of-control transactions and could capture certain minority investments.
The list of potentially sensitive sectors is broad and includes energy, transport and logistics infrastructure, electronic communications and digital infrastructure, water management, healthcare and biotechnology, financial infrastructure, media and defence, as well as critical raw materials, certain real estate and agricultural land, food production, and activities involving access to sensitive personal data.
The detailed list would be set out in an annex to the new law and could subsequently be amended by the Government.
How would the screening work?
The proposed regime would operate as a prior authorisation mechanism. Covered investments would need to be notified and cleared before completion, meaning transaction timetables and closing conditions would need to account for the screening process.
The Ministry, supported by a Foreign Investment Review Council (the “Council”), would conduct an initial review within 45 days. If no national security or public order concerns are identified, the investment could proceed. Where concerns arise, a more detailed assessment could follow.
The review could result in:
- unconditional approval;
- approval subject to conditions or mitigation measures; or
- prohibition of the investment.
Potential mitigation measures could include restrictions on access to sensitive data, requirements to retain infrastructure in Montenegro or conditions concerning personnel holding sensitive positions.
Enforcement and next steps
The Proposal also envisages financial penalties for failure to notify and for completing an investment without prior authorisation. The authorities could also impose corrective measures, including requiring a late notification, restricting management rights or requiring the investment to be unwound.
Decisions could be challenged before the administrative court.
The Proposal is not yet the final regime. It is expected to undergo public consultation before the new law and implementing legislation are adopted. The precise scope and operation of the screening mechanism may therefore still change.
Nevertheless, the direction is clear: Montenegro is moving towards its first comprehensive FDI screening regime, broadly aligned with the EU approach. Once adopted, the new framework will introduce an additional regulatory consideration for investments involving Montenegro where a non-EU investor acquires an interest in a business operating in a strategically sensitive sector.
FAQ
Does Montenegro currently have an FDI screening regime?
No. Montenegro currently lacks a comprehensive foreign direct investment screening mechanism, aside from limited rules governing investments in the arms and defence industry. A new standalone FDI screening regime is now being proposed.
Which foreign investments would be subject to screening in Montenegro?
The proposed regime would apply to investments by non-EU investors, as well as investments by Montenegrin or EU undertakings controlled by third-country investors, where the investment concerns a covered sector and involves the acquisition of control, significant influence or at least 10% of ownership interest or voting rights.
Which sectors would be covered by Montenegro’s proposed FDI screening regime?
The proposed regime would cover a broad range of strategically sensitive sectors, including energy, transport and logistics infrastructure, electronic communications and digital infrastructure, water management, healthcare and biotechnology, financial infrastructure, media, defence, critical raw materials, certain real estate and agricultural land, food production, and activities involving access to sensitive personal data.
Would FDI screening be required before an investment is completed?
Yes. The proposed regime would operate as a prior authorisation mechanism, meaning that covered investments would need to be notified to and cleared by the relevant authority before completion. The authorities could approve the investment unconditionally, approve it subject to mitigation measures, or prohibit it.
When will Montenegro’s new FDI screening regime enter into force?
The regime is not yet in force. The Government has adopted the Proposal, which is expected to undergo public consultation before the new law and implementing legislation are adopted. The final scope and operation of the regime may therefore still change.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
