Opportunity airs in Montenegro

Montenegro has had its fair share of political ups and downs in recent years. Now fully independent it is welcoming foreign direct investment with open arms – and the opportunities, for those in the know, are mouth-watering. Legal expert Ana Kolarevic has represented the interests of leading foreign investors in Montenegro for some time. The list of her clients extends to more than 80 percent of foreign companies and individuals who’ve started business and investments in Montenegro. The high proportion of businesses relying on her judgement stems from the fact that there are few lawyers as experienced as Kolarevic in this fast-changing part of Europe.

Wide range of legal expertise
Kolarevic specialises in all types of corporate and commercial law, not to mention civil and administrative transactions. So who’s a typical Kolarevic client? Typically Kolarevic says it’s a domestic or foreign client launching a new greenfield project – a project that has to pass through all the legal and administrative hurdles until operation can commence. “That includes all the stages of privatisation, tendering, negotiations, contracting, company formation, etc. Personally I tend to agree with the thesis that the best attorney is one whose clients are not involved in litigation. It’s an art of resolving a problem while providing good protection to your client and not exposing him to court expenses. That counts for a lot,”  she says. Her office has an excellent team of external collaborators who are experts in finance, taxing, architecture and land surveying, to name but a few specialties. But Kolarevic’s essential unique selling point has to be her experience in operating inside a country where few outsiders are naturally confident. “I think my clients appreciate the security I give them. They always know how they stand and always have reliable, impartial information on the basis of which they may assess their risks. These are necessary ingredients to proper decisions.”

Although overseas law firms are slowly starting to penetrate Montenegro themselves, home-grown expertise with an intimate knowledge of the country’s legal byways and culture is irreplaceable and unique, especially in a country whose infrastructure is still way behind most EU states. Yet foreign legal firms are also making inroads into the country. “I welcome foreign competition. It’s an excellent driver for better performance and more creative ideas towards the improvement of legal services generally. Also, it can mean good cooperation with other foreign legal offices in Montenegro. It’s a good thing.”

The Kolarevic advantage
• Court representation and production of constitutional documents and drafting internal corporate contracts;
• Organising shareholder meetings and supplying advice regarding the application of the Companies Act;
• Assisting in entering into funding agreements and preparing related security;
• Organising share purchase procedures;
• Legal assistance in labour relations, including obtaining of work and residence permits for non-residents;
• Preparation of contracts required for operation
of business organisation including privatisation
and due diligence, and;
• Transactions and activities related to urban planning and development.

Why invest in Montenegro?
It’s a good question. But the answer is simple. Montenegro is on the move. The overall investment and business climate in the country is startlingly better than it was even just two years ago, despite the current global recession. “The main priority is to improve the environment to such an extent that it becomes attractive to as many investors as possible and makes them decide to stay in Montenegro as long as possible,” says Kolarevic. “The legislative framework is being upgraded, with good prospects to follow the timeframe established in the National Plan of Integration with the EU.”

Although Montenegro only became independent in 2006, the country has achieved significant improvement results according to recent evaluations of foreign observers and EU agents. “In all fields too,” says Kolarevic. “Even during the time of war conflicts in the region, the transition process and all other related phenomena, Montenegro has been perceived as a politically extremely stable state in the Balkans during the previous two decades. Although a small territory, due to its multiethnic harmony and stable state system, Montenegro has become an important factor of stability in the region.”  

Recent EU 2006 and 2007 statistics point to:
• Montenegro being a European leader in FDI per capita and FDI share in GDP;
• Increasing FDI due to rising levels of privatisation;
• Low customs duties, simple incorporation procedure and low corporate income tax continue to attract investors, and;
• Significant opportunities in tourism, and a new, recently liberalised regime of capital and current transactions are all helping drive internal and external investment.  

Low taxes and EU membership en route
Ana Kolarevic knows foreign investors always favour countries fully committed to market-based reforms. Foreign companies in Montenegro have equal legal treatment as local ones she confirms. “A foreign investor may operate in Montenegro as a corporate entity or as an individual; there is no restriction on the amount of capital invested, which can be invested in any branch of industry. Financial and other resources may be freely transferred, including profit and dividends. Also, a foreign investor may acquire a title on real estate.”

The Montenegrin tax regime has also become one of the most competitive ones in Europe says Kolarevic, with corporate taxes of just nine percent. That means foreign investors have plenty of opportunity to maximise operating gains from their investment. And with EU membership only a matter of time, the investment case is hard to ignore. “The EU criteria is very strict. But Montenegro has worked hard. The European perspective of West Balkan countries is of crucial importance for the stability and progress of the region and the EU. Institutional reform was one of the key steps on that path, and Montenegro is currently focused on the reform of the state administration and judiciary.”

Taking the rough with the smooth
Although economic legislation has spurred investor interest, Kolarevic warns that the application of law still remains inconsistent. Montenegro, she reminds investors, is still undergoing the growing pains of most Eastern European economies switching to a market economy. “That is why regulatory risk is still relatively high in Montenegro. EU experts have warned Montenegro that public consultation should be mandatory for all the laws, which would increase the transparency in the work of institutions. Also, there is still work to be done in the parliamentary supervision of the quality and coherence of laws.”

Kolarevic meanwhile says she is not someone who makes big promises. She says she knows that what eventually counts for all her clients without exception is the end result. “That is why I try hard not to disappoint them. That is my strength. At the start, I am realistic and frank with clients, without being a pessimist. But I believe it is better to work diligently towards the achievement of the goal rather than making over-optimistic promises at the start. Often I can get a much better outcome then expected.”

She adds that she is always delighted to welcome foreign investors to Montenegro. “The foundations of my law office are firm. They lie in my extensive experience in judiciary, my knowledge, professionalism and the need for justice.”