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news 18 Aug 16

Russians Dominate Foreign Ownership of Montenegrin Companies

Despite Montenegro’s cooling relations with Moscow, every third foreign-run company in the tiny Adriatic country is owned by Russians, the state statistical agency said.

Dusica Tomovic
 Photo: Pixabay.

Out of over 4,200 foreign-owned firms registered and operating in Montenegro, 32 per cent are owned by Russians, according to the latest data from the national statistical agency, MONSTAT.

The data shows an increase in the number of companies and enterprises owned by Ukrainian nationals - 10.6 percent in 2016 compared to six per cent in 2014.

The MONSTAT research also showed the number of registered foreign companies has doubled in the past seven years.

Blagoje Banicevic from the Russian Business Club in Montenegro told BIRN that the figures only confirmed what has become a trend in recent years, especially since 2008, that Russians are the biggest investors in the country. 

"This is no longer a surprise to anyone," Banicevic said.

For years, the large number of Russian companies in Montenegro was explained by the fact that as owners of firms and land in the country, many Russian visitors have been able to get a long-term permit for staying in the country without a visa.

In 2012, Montenegro adopted a new law on foreigners which stipulates that foreigners can stay in Montenegro for up to a year without a visa if they own real estate.

Until then, Russians were able to stay in Montenegro only for 90 days and permanent residence could be achieved only if they owned a company. 

Last October, the government adopted regulations allowing foreigners to extend their annual residence permits without limits.

Under Montenegrin law, foreign companies can own 100 percent of a domestic company, and profits and dividends can be repatriated without limitations or restrictions.

Registration procedures have been simplified to such an extent that it takes just one euro and four days to process an application to register a business. 

But Banicevic said that not all Russians opened their companies just to gain residence permits. He estimates that could be the reason in 20 to 30 per cent of cases. 

"In the past 10 years, more than two billion euros came to Montenegro from Russia, it is not like they all founded the companies for reasons of tourism. Most of the Russian companies still have a business interest in operating in Montenegro," he said.

Montenegro has had close ties to Russia dating back to the reign of Tsar Peter the Great, when Russia agreed to take the small Orthodox principality under its protective wing.

According to the Russian embassy in Podgorica, between 5,000 and 7,000 Russians are permanent residents in Montenegro. 

For years, Montenegro has been labelled the “Russian VIP resort” - the preferred destination of Russian oligarchs.

According to some surveys, more than 40 per cent of real estate in Montenegro belongs to Russian politicians and billionaires. 

But relations between the two countries cooled down in March 2014, when Montenegro joined EU sanctions against Russia over the annexation of Crimea.

In July this year, Montenegro's Prime Minister Milo Djukanovic also angered Moscow by saying that Russia is actively working with “strongholds” of anti-EU and anti-NATO sentiment in the Western Balkans to compete for influence.

In an interview with EUobserver, Djukanovic warned the EU of the danger from Russia, accusing Moscow of supporting anti-NATO parties and media in the Balkan region. 

The foreign ministry in Moscow responded by accusing Djukanovic of destroying Montenegro’s traditionally friendly ties with Russia.

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