Having gained independence less than 13 years ago, Montenegro is a very young and small country. Home to just 625,000 people, it welcomed 2.2 million tourists in 2018, a 10% growth from the previous year, according to Pavle Radulović, Montenegro’s minister of sustainable development and tourism.

Between 1960 to 1980 – before an increase in competition and years of regional conflict – the area was one of Europe’s hottest luxury getaways. Tourists are still drawn to the country’s mountains, lakes and beaches, but now the government is making efforts to improve Montenegro’s infrastructure and boost its high-end offering, as visitors from western Europe grew in double digits in 2018, according to Mr Radulović. 

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Furthermore, Azmont Investments is putting €600m into Portonovi, a 26-hectare leisure resort in Montenegro. This is another step towards restoring Montenegro’s former glories, and indicates the country's emergence as one of Europe’s rising destinations for luxury tourism. 

First movers

Portonovi is located on the Unesco-protected Boka Bay. With luxury villas, hotels, spas, boutiques and Europe’s first One&Only resort – expected to open in 2021 – Portonovi is aimed at upmarket tourists from Europe and the Middle East. 

“We believe in the future of Montenegro, a very small, dynamic and beautiful country,” says Ahmed Erentok, chairman of Azmont Investments, which is a subsidiary of Azerbaijan’s State Oil Company. 

“You could spend $1bn anywhere in the world, but we believe in Montenegro. It’s untouched. We’re taking the first step, building something unique to inspire other investors,” he adds. “Montenegro has the best tax regime in Europe, which is very important. Corporate tax is 9% for everybody. You can come and form your own company, you can purchase land and refund your VAT. [Moreover], it has a very flexible visa regime.” 

Montenegro is ranked 50 among 190 economies in the World Bank’s 2019 Ease of Doing Business index. Early in 2019, the country launched a citizenship-for-investment programme for up to 2000 foreigners over the next three years. Candidates are eligible if they donate €100,000 for the development of deprived communities, invest €250,000 into development projects in northern and central Montenegro, or €450,000 into projects in the capital Podgorica or along the coastline, in areas such as Portonovi. 

Fulfilling potential 

A key factor in Montenegro’s development into a luxury tourist location is the significant investment being poured into infrastructure. “Chinese companies are already [active in the area]; they’re building one of the main roads all the way down from Belgrade to Sarajevo,” says Mr Erentok. 

“One of the challenges for Portonovi is accessibility, but over the next 18 months Montenegro is upgrading its airports. Tivat airport, the closest, is under concession at the moment. And hopefully we will receive our new airport by the end of 2020,” he adds. Portonovi is, however, an hour’s drive from Croatia’s Dubrovnik airport. 

Mr Erentok also cites Montenegro’s prime regional advantage of political stability. Besides becoming a full member of the World Bank, the IMF and the EBRD in 2007, the World Trade Organization in 2012, and NATO in 2017, Montenegro is also making significant strides towards EU ascension by 2025.