FAQs
What is the process for buying a property in Montenegro?
Purchasing a property in Montenegro is a simple process and we do everything we can to ensure your purchase runs as smoothly as possible. An outline of the process is set out below, but please email info@montenegroprospects.com for a in depth buying guide.
- Negotiate a price acceptable to you and the vendor.
- Place a deposit (between 1000 euros and 10% of purchase price) to take the property off the market, and a reservation agreement would be signed by both parties. The deposit would usually be held by the vendor
- Open a local bank account
- Appoint a lawyer (licensed in Montenegro) in Montenegro or UK to act on your behalf
- The balance of your deposit (normally 10%) is paid within 10 days
- The contract is signed by you, or your lawyer (via Power of Attorney) in the Montenegrin court and the remaining balance is immediately transferred from your Montenegrin bank account to the vendor
- 3% purchase tax is paid. (The value of the property is determined by the Inland Revenue office).
- Papers are submitted to the local land registry
- The property is then registered in your name
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Is it different if the property hasn't been built yet (it's off plan)?
Yes it is a little different to buying a completed property, in that paying for the property will usually be in instalments, and everything planned needs to be specified in advance. An outline is below. Please email info@montenegroprospects.com for a full buying guide.
- Negotiate a price acceptable to you and the developer
- Place a deposit on the property to reserve it (usually around 5000 euros), and a reservation agreement would be signed by both parties. The deposit is usually held in a Client Account.
- Appoint a lawyer (licensed in Montenegro) in Montenegro or UK to act on your behalf
- Pre-contracts and specifications are drawn up by the developer and your appointed lawyer will sign once approved by you. Upon signing, this is the point at which the first of staged payments are due
- A typical example of staged payments on an off plan property would be
30% Pre-contract (minus deposit)
30% Foundations complete
30% Roof complete
10% Key handover and snag list
- The final contract is signed by you, or your lawyer (via Power of Attorney) in the Montenegrin court and final payment is immediately transferred from your Montenegrin bank account to the vendor
- Papers are submitted to the local land registry
- The property is then registered in your name
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What kind of rental yield can I expect?
Tourism in Montenegro is still growing at a fast rate and the rental market is not fully developed yet. 2009 saw rental yields of between 4 and 8% for apartments and villas on the coast. Because of the recent drop in property prices and the continues increase in demand for rental properties, a rental yield of 6-8% can be expected.
Do I need a visa to visit Montenegro?
Citizens of most European countries (Austria, Belgium, Greece, Denmark, Estonia, Italy, Republic of Ireland, Cyprus , Lithuania, Estonia, Luxembourg, Malta, Hungary, Germany, Poland, Portugal, Slovakia, Slovenia, Finland, France, Netherland, Czechoslovakia, Spain, Sweden, United Kingdom, Bosnia, Croatia) do not need visas to enter Montenegro and can stay in the country for up to 90 days. Citizens of Russia, Albania and Ukraine also do not need visas but they can stay in Montenegro up to 30 days. Serbians do not need visas to enter Montenegro.
Foreign citizens coming from other destinations need to check with the nearest Embassy or Consulate if they need visas for Montenegro.
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How do I get a residency permit?
You first need to submit a request for a residence permit to the local branch of the Ministry of Internal Affairs (MUP), or to the Montenegrin Embassy or Consulate abroad.
A Temporary Residence permit can be approved if the foreign citizen wants to work in Montenegro, study, or join their family. There can be other reasons that are determined by the Montenegrin and/or International laws. A temporary permit lasting up to two years can be issued, as long as the foreign citizen submits proof that he/she can support themselves, has health insurance (from the country of origin), and he/she has a valid reason to apply for a residence permit. Also, proof that the person applying for residence has not been criminally prosecuted has to be submitted.
Permanent residence is approved if the foreign citizen has spent more than 5 years in Montenegro (with a temporary permit), has been married to a Montengrin citizen (or to a foreign citizen who has permanent residence) for more than 3 years, has Montenegrin origin or is a child or close relative to a Montegrin citizen or to a foreign citizen who has permanent residence in Montenegro.
Any local branch of the Ministry of Internal Affairs can provide all information for the residence permits and more information on the law on temporary and permanent residence can be found on this link http://www.gom.cg.yu/files/1207921717.doc
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What kind of work permits exist in Montenegro?
A foreign citizen can be employed in Montenegro if he/she has a work permit and approved residence permit. Work permits are issued by the Employment Bureau, and they can be: a personal work permit (Licna Radna Dozvola) that is issued permanently for foreigners who have permanent residence or for refugees, a one year work permit, a seasonal work permit (valid for 8 months)
Work permits can be refused if the quota set by the authorities for that year has been exceeded.
How do I get a work permit?
1. Employer submits the request form Z3 to employ a foreign citizen to the Employment Bureau – local office (Zavod za Zaposljavanje). With the request the employer needs to also submit:
- Registration documents of the Company (Privredni Sud i Monstat) both originals and verified copies
- Copy of the passport of the foreign citizen, translated and verified
- Proof of a qualification degree which is translated and recognised in Montenegro (not required if the employee to be employed does not need a degree)
- Official application for new employee (Form E1)
- Proof that fee for work permit has been paid
Fees for work permits
- Personal Work Permit -165 EUR
- Annual Work Permit - 110 EUR
- Seasonal Work Permit – 90 EUR
2. Employment Bureau issues the work permit.
3. With the Work Permit the foreign citizen applies for a residence permit.
4. When the residence permit has been approved the Labour Contract has commenced, and the employer starts paying health and pension insurance for the employee.
5. Form that states that the foreign citizen has started (or stopped) working has to be submitted to Employment Bureau
Any local office of Employment Bureau can provide all information regarding work permits and more information on the law concerning work permits can be found on this link http://www.gom.cg.yu/files/1175075336.pdf
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What are the journey times from Dubrovnik and Tivat airports?
Both airports are convenient for the coast. Dubrovnik airport is approximately 14km from the Montenegro border, and it takes about 30 minutes to drive from the airport to Herceg Novi, 80 minutes to Kotor, 60 minutes to Tivat. From Tivat airport, it takes about 15 minutes to drive to Kotor, 30 minutes to Budva, and 90 minutes to Bar. Podgorica airport is an alternative for anyone visiting the southern part of the coast. Through the tunnel, it takes only 30 minutes to Sutomore, and well under an hour to both Petrovac and Bar.
Is there any Capital Gains Tax?
There is no capital gains tax in Montenegro, but you may still be liable in your country of origin.
Are there any other taxes to pay?
The most important is purchase tax, which is 3% of the value of your property – valued by the tax office regardless of the purchase price on the contract. Purchase tax is payable as soon as the main contract is signed. It is recommended that you pay the tax immediately as interest rates will charged for every day of delay. In some cases purchase tax is not payable for off plan developments but make sure that you check with the lawyer if this law applies for the property you are buying.
Once you are the registered owner of the property you will need to pay an annual property tax. The amount depends on the size and location of the property – for example, the tax for a two bedroom apartment would be approximately two hundred euros per year. You will receive the bill in your mail usually in the Spring. It can be paid in the Tax Office (Poreska Uprava).
Income tax would also be levied on any rental income. For a full guide on renting out a property, please email info@montenegroprospects.com
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Who offers property insurance in Montenegro?
There are two companies offering insurance in Montenegro:
Lovcen Osiguranje will insure your property for 1 EUR per sqm if the property is inhabited and 1,5 EUR per sqm if the property is only used occasionally.They have offices in all major towns throughout Montenegro. You will need to bring your Passport or some other ID, and to know details of your property (size and similar, best to take ownership list – List Nepokretnosti). More information on http://www.lovcenosiguranje.co.me/eng/property_insurance.php
Hiscox Insurance offer property insurance in various countries including Montenegro. Insurance can only be provided through a broker in the UK. We have negotiated excellent terms for Montenegro Prospects clients with Underwood Insurance. As a guide, a 2 bedroom apt with €10k worth of contents, plus public liability and accidental damage will cost approx €100/year. Contact info@montenegroprospects.com or Overseas@underwoodisl.co.uk quoting "Montenegro Prospects" or visit www.overseaspropertyinsurance.co.uk for more information.
How do I pay utility bills?
All water, electricity, rubbish, phone, internet, cable tv bills can be paid in the local post office or bank. Alternatively, water and electricity can be paid directly to the company. Some banks offer the possibility to automatically pay your phone or electricity bills from your bank account.
You can find more details regarding the price of electricity on this link http://www.epcg.co.me/en02_01.html
More information on the phone and internet options can be found at http://www.t-com.me/
Can I get satellite or cable TV?
There are a few Cable TV operators in Montenegro : Total TV, Extra TV and BBM
Can I use my lawyer in the UK. If not how do I find a good lawyer?
Any lawyer you use must be licensed to practise law in Montenegro. To our knowledge there are none in the UK at the moment. We can provide you with a list of lawyers who are experienced in acting for foreign clients buying and selling property in Montenegro. All are wholly independent from us.
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Can I sign a contract or power of attorney document in the UK?
For a UK client who wants to sign their contract, precontract or Power of Attorney in the UK, the procedure is as follows:
1. Sign the document at a public notary’s office; the notary is legalising the UK citizen’s signature. A list of notaries can be found at: http://www.thenotariessociety.org.uk/ The notary will charge approx £120 for each document.
2. The Legalisation Office (part of Foreign and Commonwealth office) then needs to issue an apostille (legalisation certificate) which legalises the notary’s signature. This can be done over the counter or by post. Some notaries will send off the documentation for you.
The legalisation office has recently moved from London to Milton Keynes and is now at:
437 Silbury Boulevard
Milton Keynes
MK9 2AH
Tel: 01908 295 111
Full details are on their website.
http://www.fco.gov.uk/en/about-us/what-we-do/services-we-deliver/legal-services/legalisation/
The fee for legalisation of each document is £28.
I'm concerned about currency fluctuations. How do I minimise my risk?
Using a foreign exchange broker when transferring your funds abroad or trading foreign currencies, you could save hundreds if not thousands of pounds and even more if you forward plan your foreign currency rate.
Whether you are buying, selling or investing in property abroad, foreign exchange transfers are key to maximizing the value of the currency you are sending. Fluctuations in the exchange rate can have a huge impact on the overall cost of your property purchase, as the example below demonstrates.
A property costing €250,000 purchased on 26th August 2009 would have cost £218,340 . However the same €250,000 purchased on the 26th September just one month later would have cost £229,568 – a huge difference of £11,228.
A currency broker is a cost effective alternative to the high street bank, offering a free service including better rates of exchange, no commissions and will often pay for the cost of your international transfer which may total up to £40 per transfer.
There's lots of companies out there. Can you recommend any foreign exchange firms?
We recommend contacting John Paul Georgiou, a Foreign Currency Broker at Voltrex, a FSA regulated financial services company that counts numerous major investment banks and hedge funds amongst its clients. VFX is the foreign exchange arm of Voltrex Ltd
The company is a leading broker in the market and most uniquely offers an online trading platform which allows you the client to view real time prices, trade online, send international payments, place orders, view previous deals, view up to date charts and market commentary – essentially manage your whole foreign exchange exposure online yourself. Of course it goes without saying that you can still telephone John Paul to do all of the above for you. John Paul has been helping our clients since 2004 and offers an exemplary service. It’s free to set up an account, you can save a significant amount of money and in addition you do not pay any commission or transfer costs.
Please feel free to contact John Paul on +44 (0)20 7959 6851
john.georgiou@voltrexfx.com
www.voltrex.com
Alternatively you can register online as below.
http://www.voltrexfx.com/help/OpenAccount.aspx?ib=montenegroprospects
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How do I get a copy of the ownership list or deeds of my house?
The easiest way to get a copy of the ownership list would be to contact your lawyer. You can also obtain a copy direct from the Land Registry office (usually in the Municipality office). For a stamped copy you would need to pay 13 EUR fee.
Alternatively you can check it on line at http://www.nekretnine.co.me/uprava2/mne/Katastarski_podaci3.asp
There are two ways to search:
1. By Owner – you will need the identity number of the owner (usually the passport number if a foreign citizen with zeros in front of the number). This is called the "nosioci prava na nepokretnosti".
2. By Property – First you need to click on the town, then on the part (or village) of the town (K.O. – katastarska opstina) and finally you will need the number of the ownership list (broj Lista Nepokretnosti) or the number of the land parcel (Broj Parcele) on which your property is located.
The data is updated every month or two.
If you have a question that has not been covered here, please email info@montenegroprospects.com for a quick response.
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