Business

25 Sep 2019, 22:12 PM

25 September 2019 - Expensive loans, collection of receivables, extended deadlines for obtaining permits and long, drawn-out court procedures in commercial disputes are some of the most important challenges and barriers Montenegrin businesspeople are faced with, said CEO of Montenegro Business Alliance Milan Dragić, CdM reports.

He said that it was necessary to intensify activities and engagement of all relevant subjects in order to reduce barriers, especially those referring to sluggishness or insufficient responsibility in public administration.

"The problem of illiquidity and collection of receivables still exists. Provision of financial funds is a problem due to expensive loans and this issue should be addressed with utmost attention, as it affects the business development. Deadlines for obtaining different kinds of permits should be shorter and a number of documents required for the procedures should be reduced. It is necessary to accelerate court procedures in commercial disputes, especially in contract performance. These barriers target all sectors and they need to be addressed comprehensively. Every economy and society as a whole depend on business. Is there anything more important than providing optimal conditions to those who create new values," asked Dragić.

According to him, innovation is necessary if we want to be competitive in demanding foreign and domestic market. In that context, the quality of products and service offered is essential.

"We should endeavor to provide the greatest possible productivity in order to increase competitiveness. Creating a stimulating environment for businesses is crucial. MBA is very engaged in this regard," says Dragić.

Asked to give his opinion on the business environment in Montenegro, Dragić says that it has considerably improved.

"MBA was the first company to start dealing with the problem of business barriers. And the progress we have made is more than obvious. Usually, people who decide to set up their own business lack initial financial funds. In other words, they are required to provide the money on their own. That has to be changed if we want to encourage business development," pointed out Dragić.

He also added that the cooperation with state and local administration authorities is increasing.

"Certainly, it can be much better, but there is will and that is what matters. Representatives of state and local authorities are becoming aware of the importance of business associations and they are ready to take up our suggestions. To be more precise, they are starting to regard us as their equal partners and that is a necessary prerequisite for raising the quality of our business relations. We firmly believe that the role and influence of business associations will become even more important," concluded Dragić.

Read more news about business in Montenegro at TMN's dedicated page.

25 Sep 2019, 14:56 PM

Terminal 2, which opened at Tivat Airport late last year, in less than two months this summer handled 102,000 passengers and will certainly relieve the total traffic of passengers in the airport building. "This increases the comfort of passengers and the quality of service, which is the obligation of every airport to provide to the passengers," director of Tivat Airport Rade Maric told to “Radio Tivat”, emphasizing that it is necessary to raise the quality and extend the aircraft platform as a priority.

There is nothing unsafe at the Airport, but the fact is that some of the investments needed to be made long ago and that the involvement of all airport participants needed to be much greater to maintain that security at the required and demanding level. Since we have increased passenger comfort and quality of service with the new terminal, the same should be done with the expansion of the aircraft platform," explained Maric.

At this point, the priority is a wider and more comfortable platform, that is, generally to bring the entire operating areas to a higher level. The executive management of "Airports of Montenegro" has recognized this as a need and is intensively working on it, said Maric, stating that the introduction of night flights at the airport will greatly relieve traffic on a daily basis.

According to him, the priority would be that the planes do not remain on the platforms, that they are not late and that they are not diverted when it is dusk and 30 minutes after that, mainly to Podgorica Airport. "So, we would have relief and not have to rush at 9 pm, or when the peak season expires and we can no longer accept planes. This would be a limited time because we are still an elite tourist destination, and we have to keep in mind the comfort of those who come to rest in Tivat. Certainly, an hour, an hour and a half to two would significantly contribute to the relief of daily traffic," explained the director of Tivat Airport.

The airport has been doing very well this month as well. Traffic is almost at the level of the summer months, said the director of the airport, emphasizing that very good results are expected in the first half of October.

From the beginning of the year to September 22, there was a turnover of 1,188,000 passengers, which is almost 100 thousand more than in the same period of the previous year when there were 1,093,000. During that period, 6,000 aircraft were accepted and 5,860 in 2018, Maric said.

These results show that the season and the post-season are slowly equalizing, which will happen in the coming period. "We are going to extend the season to 6-8 months a year. A record was achieved this summer when 66 aircraft and 12,269 passengers were received and served in one day. That record in the history of both Montenegro's airports was recorded on August 4th.

The largest and most important resource of Tivat Airport is one significant portion of employees who every airport would wish to have. They are credited for having so much traffic in such a small space, without any incidents. "A couple of minor excesses are negligible compared to such a large number of passengers and aircraft served," the director of Tivat Airport concluded.

Text by Zora Krstovic, on September 24th, 2019, read more at Radio Tivat

25 Sep 2019, 13:43 PM

Tivat airport welcomed 1.18 million passengers by September 22, which is 95,000 more than in the same period last year.

“Pobjeda” writes that the number of aircraft accepted during this period increased from 5,860 to 6,000.

Director of Tivat Airport Rade Maric said those results show that the season and post-season are slowly becoming equal.

"We are going to extend the season from six to eight months a year," he said.

Maric said that the traffic of passengers in the building was relieved via Terminal 2, through which 102,000 passengers had passed in less than two summer months.

"At this moment, the priority is to bring the entire operational areas to a higher level, which the executive management of the Airports of Montenegro has recognized and is intensively working on the same," Maric said.

Text by Boka News, on September 25th, 2019, read more at Boka News

24 Sep 2019, 19:53 PM

24 September 2019 - The Government is committed to constructive dialogue with representatives of the civil sector because as decision-makers they want the NGOs to be a reflection of the entire society, Prime Minister Duško Marković said in Bijelo Polje at a meeting with representatives of NGOs from northern Montenegro.

"We need a dialogue with NGOs. We appreciate the contribution of the civil sector to policy implementation," said PM Marković opening the roundtable "Cooperation between the Government and NGOs – the key to civil society development".

The Government, the Prime Minister said, is attentive to the suggestions and criticisms that come from the civil sector and creates responses systematically and sustainably. Furthermore, he noted that the Government does not claim success alone, although it is presented in public as the only responsible subject of success is lacking.

Commenting on areas of joint work and problem-solving, PM Marković praised the contribution of NGOs from the north to environmental issues.

"NGOs from the north have strongly and directly raised the issue of individuals and private companies that are adversely affecting our living environment," the Prime Minister stressed and recalled examples of recent Ćehotina pollution in Pljevlja and Lim in Bijelo Polje where the State responded through cooperation with local NGOs.

PM Marković also emphasised that tens of millions are being spent in the north for the development of road, traffic, energy and digital infrastructure, new water supply systems and other incentives, noting that without a developed infrastructure, neither companies nor investors can invest in the cities of northern Montenegro.

"In Kolašin, as part of the on-going project, 30 million EUR is being spent to develop infrastructure and a new ski centre. Twenty-three million is spent in Bijelo Polje. We are not talking about a project that should be done, but a project that is being implemented. As a citizen, I was delighted to see this morning in the media and on Twitter a picture of a new cable car that Leitner had installed in Cmiljača. I have already talked about Đalovića cave – 18 million EUR worth project, " the Prime Minister said.

Speaking about the development of the North, the Prime Minister also referred to some comments on development policy:

"Even today, these critics tell me – development is not road construction, it is easy to build roads, Montenegro needs to open factories. Who will open a factory in the North if there is no road? Who will make a viable business plan if there is no road, if there is no power, if there is no internet? These conditions are prerequisites for any business. Imagine if these obstacles still existed in the future, imagine them as a great hurdle for any serious business and factory that can be opened in Montenegro. Therefore, we are spending tens of millions in the north today to develop road, traffic, energy and digital infrastructure, the Ministry of Agriculture is investing in new water supply and other incentives. Without that, there are no companies or investors anywhere in the world, not even in the North. I know that it is too late, that maybe we should have done it earlier, but I know we had to go in that direction – and we did," PM Marković highlighted.

24 Sep 2019, 11:17 AM

The Constitutional Court instituted preliminary proceedings on the initiative of the Employers Union to assess the constitutionality and legality of the part of the Internal Trade Act that introduces non-working Sundays and public and other holidays for the majority of trade.

"In the case of reviewing the constitutionality of Article 35a of the Law on Internal Trade, a preliminary proceeding is underway to examine the procedural preconditions necessary to conduct the proceedings and obtain the necessary opinions and documentation," it was stated from the Constitutional Court to "Vijesti".

An amendment to the bill with this added article was passed in July this year, and it goes into effect from October 15, so the first non-working Sunday for traders will be October 20. The initiator of this legal solution was the Chamber of Commerce Board, while the Union of Employers launched an initiative to abolish it at the request of the shopping malls “Delta”, “Kamelija” and “Gintas”, because the proposal to make shopping malls an exception from this law was not approved.

Traders from the Chamber of Commerce committee believe that the total turnover will not be reduced but that it will shift from Sunday to other days. While the UPCG believe that such a solution is unconstitutional and violates the freedom of entrepreneurship and that it will cause a reduction in the number of employees. They state that now workers who work on Sundays are given other days off.

Text by Goran Kapor, on September 21st, 2019, read more at Vijesti

20 Sep 2019, 19:19 PM

20 September 2019 - Montenegrin Prime Minister Duško Marković met with representatives of world-renowned companies Northstar and Marriott, which will build a 210 million EUR Ritz-Carlton Montenegro resort in Herceg Novi.

The owner of the Ritz-Carlton Montenegro project Mohamed Al Sager said that preparations for the construction of the resort are going according to plan, and that the hotel operator would be the renowned Marriott hotel company, adding that they have ensured that one of their 30 luxury brands, the Ritz-Carlton, is coming to Montenegro.

Marriott to open Ritz Carlton hotel in Montenegro in 2023 3

The Ritz-Carlton Montenegro resort will be a hotel with 300 units, with 120 hotel units and 180 apartments. The first phase of the project, encompassing a hotel, 113 apartments, 13 villas and four restaurants, is expected to be finished in the summer of 2023.

According to the statement by the Government of Montenegro, Prime Minister Marković expressed his satisfaction that such prestigious companies will invest in Montenegro and bring not only money, but also knowledge, experience, and business ethics.

Marriott to open Ritz Carlton hotel in Montenegro in 2023 2

"The Government has serious infrastructure agenda, which will provide new quality to the resorts on that part of the Montenegrin coast," Prime Minister Marković said and pointed to the decision to valorize the airports and request for the construction of a water terminal in Tivat, as well as the construction of a four-lane boulevard between Budva and Tivat.

The interlocutors agreed that this resort offers great job opportunities for Montenegrin citizens and discussed the establishment of the Marriott Academy that would enable acquiring new knowledge and skills for work in tourism.

Read more about the business in Montenegro at TMN's dedicated page.

20 Sep 2019, 14:07 PM

The Local Public Revenue Authority of the Municipality of Budva, until September 8th, collected just over three million euros for the residence tax, which is 250 thousand euros more than in the same period last year.

In spite of one of the most problematic seasons, the management achieved to realize the plan and exceed the collection of taxes, despite the poor capacity utilization during the pre-season and the peak, which lasted only twenty days.

Secretary of Finance and Acting Director of the Public Revenue Collection Authority, Petar Odzic (SDP), said last year's record results were exceeded.

“Out of the total amount of EUR 3,000,116 collected, EUR 1,494,783.50 relates to the payment of the residence tax for private accommodation. Last year, EUR 2,764,353 was collected in the same period, of which EUR 1,391,360 refers to individuals, ”said Odzic.

He recalled that since the beginning of June, teams of tourist inspectors, authorized to control private accommodation and collect the residence tax, have been on the field.

"We plan to have the controls in private accommodation by the end of September, while the hotels will be controlled throughout the whole year," Odzic said.

He recalled that the price of the residence tax remained unchanged and amounted to one euro, and revenue from it in the diameter of 80 percent to 20 percent is shared by the Tourist Organization Budva and the National Tourist Organization.

Text by Vuk Lajovic, on September 18th, 2019, read more at Vijesti

19 Sep 2019, 19:00 PM

19 September 2019 - Prime Minister Duško Marković was recently on a working visit to Nikšić, after which he stated that the municipality follows the Government's strategic development policies that are focused on the overall development of the country and improving the quality of life of its citizens, and that in Nikšić there is a boom in investments from both the public and the private sector.

"Here, we see progress in every place and the main indicator of such a trend is the information that the unemployment rate in Nikšić today is below 13 per cent. In early 2016, it was 22.8 per cent. So, people in Nikšić are working, people in Nikšić are getting employment, a lot is being done in Nikšić on the development of utility infrastructure, new roads, water supply, social infrastructure - over 1,000 apartments are being built today in this city. Therefore, we have a new quality here, we have people here who can finance it, and the State is investing tens of millions through its capital projects. Only the reconstruction of the regional road from Nikšić to Vilusi or what we have done from Petrovići to Vraćenovići and of course the entry into the procedure of construction of a new road from Cetinje via Čevo to Nikšić will cost over EUR 50 million. We have a great situation in Nikšić, one serious team, a good partnership between the Government and the Municipality," the Prime Minister said.

According to the official statement by the Government of Montenegro, during his visit, PM Marković and the representatives discussed the current city development projects, such as phase II of the sewer system, reconstruction of the city football stadium, for which the Government allocated 3 million euros, and the Football Association of Montenegro 1.5 million euros.

The Prime Minister, alongside Minister of Sports and Youth Nikola Janović, laid the foundation stone for the construction of a multifunctional playground at the Dušan Bojović Elementary School in Župa. On that occasion, PM Marković promised that the Government would finance the construction of the entire section of the road from Župa to Nikšić in the length of 21km.

Read more about the business environment in Montenegro at TMN's dedicated page.

18 Sep 2019, 15:31 PM

The International Monetary Fund (IMF) believes that the rush to complete the highway from Bar to Boljari will endanger state finances, that is, fiscal sustainability, and that completing the highway through new loans would require new fiscal adjustment measures.

Work on the first section of the highway from Smokovac to Matesevo, which was due to be completed in May this year, was extended until October next year. The first stock will cost the state about 900 million without interest and exchange differences between dollars and euros. Since public debt has increased significantly due to the construction of the first section, the government has been forced to initiate fiscal adjustment measures, including wage cuts, higher excise duties and VA. The IMF estimates public debt at 88 percent of GDP at the end of 2019.

Pause

"The rush to complete the highway is likely to jeopardize fiscal sustainability. Completion of other stocks could cost an additional 25 percent of GDP. If the government decides to complete the highway between 2021 and 2026 through new loans, government debt (including guarantees) will remain above 80 percent of GDP in 2020. Without new debt, public debt could be reduced to 50 percent of GDP by 2030," the IMF estimates.

As they explain, in the case of a new loan, the return of debt to its initial level in 2030 would require a new round of fiscal adjustment of about three percentage points of GDP between 2021 and 2023. GDP is now 4.8 billion euros, so an annual "fiscal adjustment" would mean that about 140 million euros should be provided through savings or taxes.

"Completing and maintaining a new fiscal adjustment of this size would be difficult," the IMF said.

The IMF believes that further planning of the highway should be paused until a credible feasibility study is conducted that should assess the economic return relative to the construction of another section. The IMF recalls that the Montenegrin government has commissioned a new feasibility study, due to be completed next year.

“If it decides to continue the highway work, we advise the Government not to undertake further construction or financing until at least 2023 when public debt should drop, estimated at below 60 percent of GDP. The construction of the second section is likely to be cheaper (by about 300 million euros) and will provide further benefits in connection with the north and tourist areas," the IMF said.

The IMF mission advised the authorities to carefully weigh the benefits of the highway Bar-Boljare project over the alternative use of scarce public resources.

Warranty

"As the first section of total four is due to be completed by 2020, authorities are weighing options to build a second section. Past feasibility studies, completed several years ago, have estimated the low economic return of the entire highway, based on the limited potential of toll revenue in relation to costs, ”the IMF said.

This organization also points out that continuing to build a highway using the Private-Public Partnership (PPP) model could also entail significant fiscal costs.

“The government wants to investigate the PPP structure to complete the highway and avoid new loans. If a feasibility study suggests that the rest of the project is unlikely to meet the required rate of return on the private partner, it is likely to seek guarantees from the state.

The assumption of certain risks - including construction, availability and demand risks - under Eurostat rules requires that the project is recognized in the country's balance sheet, thereby achieving equal effect, as well as financing the project by a loan from the government. The need to pay the minimum guaranteed budget revenue could also impose significant expenditures due to a long concession contract, ”the IMF estimates.

Without fiscal sustainability, there is no construction of another stock

The IMF mission states that the Government has informed them that it will prudently proceed with further construction of the highway and that, by the time of the new feasibility study in 2020, it will analyze models for the construction of the second section.

"Authorities state that completing the first section is their top priority and will not start the second section if its solutions are fiscally unsustainable," the IMF said.

Text by Marija Mirjacic, on September 17th, 2019, read more at Vijesti

16 Sep 2019, 21:47 PM

16 September 2019 - The University of Donja Gorica in Podgorica and Municipality of Cetinje are organizing the 24th Miločer Development Forum from 14 September to 18 September, while the main forum topic will be "Ecology: Regulation, Education, Business". The forum will gather renowned experts from all over the world.

Professor of the University of Donja Gorica and vice-president of the Association of Economists of Montenegro Zoran Đikanović on the occasion of Miločer Development Forum stated that the main goal is the promotion of the young and new ideas, reported Cafe del Montenegro.

According to him, the mission of the forum is to promote new ideas and boost the sense of future and a new thought.

"Our goal is to launch new ideas, new visions of development, new communication and to open Montenegro to the global world. The forum is testing the possibilities of the practical application of new ideas, in terms of opening new businesses or new areas of research," stated Đikanović.

When asked why they opted for the main topic of this year’s forum to be "Ecology: Regulation, Education, Business", he said that the aim of the forum is to tackle several aspects of ecology: regulation in this field as the main precondition for sustainable development, business operations in this field, especially new ideas, as well as new ideas for funding projects in the field of ecology. He also added that regulations would be regarded in the context of the European laws and Montenegro’s accession to the European Union.

Miločer Development Forum Opening Montenegro to Global World1

"The forum represents a basis for stimulating new thoughts and ideas. It raises awareness of an individual about his/her obligation to develop himself/herself and the environment as well. The forum always gathers many young people who have the opportunity to hear a lot of new information," said Đukanović on the topic the young and their future challenges at the regional and global level.

This year’s forum has been backed by the Center for Climate Change, Natural Resources and Ecology… New business ideas will be presented as well.

"That is a newly-established and innovative center with a clear vision. They are part of the international projects provided by Germany and other European countries as well," pointed out Đukanović.

"In the part referring to business, there will be presentations of business ideas from this area, primarily ideas of the UDG students as well as the students from the University of Montenegro and those from the region. The forum will present seven business ideas in the field of ecology, and some of them have already been funded from international sources. That is why this forum differs from all the other gatherings in Montenegro and the region as well," concluded Đukanović.

Read more news about business in Montenegro at TMN's dedicated page.

15 Sep 2019, 15:05 PM

15 September 2019 - Seventy-one individuals have well more than 1 million EUR on deposit at the end of August, the Central Bank of Montenegro (CBCG) told Dan daily. This data refers to both residents and non-residents.

The representatives of Central Bank also explained that the largest amount of money deposited was 31.9 million EUR, adding that the central bank didn’t collect data about the clients’ jobs.

At the end of 2018, as CdM reports, the number of individuals who had over a million euros on deposit was 69, which is by 2 per cent less compared to the situation in August 2019. "The total amount of the 10 largest deposits of individuals in Montenegro (residents and non-residents) amounted to 88,2 million EUR at the end of August this year, while the total amount of the 10 largest deposits of residents amounts to 32.4 million EUR," said the representatives of the Central Bank of Montenegro.

According to the data of CBM, the number of millionaires in Montenegro is increasing each year. In 2017, Montenegro boasted 64 millionaires, while in 2016 there were 54.

The CBM data also shows that in 2017, the largest amount of cash kept on deposit was 63.3 million EUR, while now it amounts to €31.9 million.

Read more about the business environment in Montenegro at TMN's dedicated page.

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