Private Sector Development

Since the beginning of the privatization process in 1999, nearly 90 percent of formerly state-owned enterprises (SOEs) have been privatized.  The most prominent SOEs still in operation include the Port of Bar, Montenegro Railways, Airports of Montenegro, Plantaze Vineyards, the national electricity provider Elektroprivreda Crne Gore (EPCG), several companies in the tourism industry, including Ulcinjska and Budvanska Rivijera.  The national air carrier, ToMontenegro , and the Niksic Steel Mill that was purchased by EPCG in December 2022 are new additions to the SOE portfolio.  All these companies are registered as joint-stock companies, with the government appointing one or more representatives to each board based on the ownership structure.  All SOEs must provide an annual report to the government and are subject to independent audits.  In addition, SOEs are listed and have publicly available auditing accounts on the Montenegrin Securities Commission’s website www.scmn.me. Political affiliation has been known to play a role in job placement in SOEs.

Regulatory Framework

Montenegro is working to amend legislation in line with international standards (primarily with the EU) and create institutions necessary to attract investment.  As Montenegro moves towards EU accession, it will be required to improve implementation and enforcement of existing legislation.

Corruption

Prevalent in many of the countries of the region, corruption is a concern, and routinely ranks high on the list of business impediments.  Montenegro ranked 65th in Transparency International’s (TI) 2022 Corruption Perception Index list.  The government’s goal of integrating with European and Euro-Atlantic institutions has spurred official efforts to counter corruption.  An improved legal framework to help combat corruption and organized crime has been in force since the adoption of the Law on Prevention of Corruption in 2014 and the Law on the Special State Prosecution in 2015.  The government has also taken substantial steps to strengthen the rule of law, including the establishment of a special police unit focused on corruption and organized crime, the creation of the Agency for the Prevention of Corruption, the creation of the independent Office of the Special State Prosecutor that handles major cases including organized crime and corruption, and the appointment of the Special State Prosecutor. The government also updated its legislation on public procurement, the treasury and budget system, and the courts in an effort to reduce corruption.