NewsEconomic citizenship program brings significant economic and other benefits and connects Montenegro...

Economic citizenship program brings significant economic and other benefits and connects Montenegro to the world

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The program for acquiring Montenegrin citizenship by investment („Program“) has existed since 2019, but it was actually actively implemented only during two years, 2021 and 2022. It took time for the Program to be operationally set up, for investment projects to be registered and passed checks, and that all parties become familiar with it to the required level and gain practice in its management. So far, the program has brought about 350 million euros of direct foreign investments into the Montenegrin economy without borrowing.

If the Government of Montenegro extends the Program until reaching the originally planned limit of 2,000 approved applications, the potential income that could be generated from the Program until its closure amounts to more than one billion euros.

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Frequently cited concerns about the Program

There is a risk of money laundering through this Program
The program attracts criminals and can be the basis for financing terrorism
The program represents a migration and security risk for EU member states
However, there is no factual basis for any of these fears. These are politically motivated accusations that are not true and must be strictly refuted. The rule of law and fact-based debate must prevail.

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Refutation
Rule of law and investment migration

The European Commission emphasizes the rule of law as a central principle of EU functioning that every member state, as well as potential future members, must adhere to.
The rule of law also implies respect for the sovereignty of each state, and it is the sovereign right of each state to individually determine who its citizens are. This is a firmly established principle in both international and EU law. It is also an issue that is constantly debated in light of Malta’s highly successful citizenship by investment program which has generated billions of euros for the local economy over the past 10 years. The program is under constant supervision by the EU. But the local politicians of Malta realized the crucial importance of the program for the country. And they firmly defend their sovereign rights. In recent times, Malta has hired some of the best lawyers and European experts in this field to handle the litigation. Malta is defending its right to determine who its citizens are and is expected to win a court case against the EU at the European Court of Justice.

Immigration and EU citizenship versus citizenship by investment

As for citizenship by investment in Europe, only a few hundred applications are processed annually in Europe, mostly in Malta, which involves thorough international eligibility checks. Meanwhile, Eurostat (Europe’s official statistics body) reveals that over 700,000 (!) EU citizenships are granted to individuals each year based on naturalization and descent provisions – often without any links to those countries – without thorough background checks. Roman Abramovich, for example, obtained Portuguese citizenship in this way, and in the last few years Portugal alone has granted more than 50,000 citizenships in this way.

Moreover, the EU receives approx. 600,000 undocumented migrants every year, and currently millions of Ukrainian refugees, from a country that before the war was considered one of the most corrupt countries in the world.

Therefore, it is absurd to state that the several hundred citizenships that Montenegro grants as part of its Program represent a security threat to the EU or open the door for criminal elements in the EU.

The Maltese program Is the best reference point in this area. This program, which was initially implemented in 2013, has been a great success, and the benefits it has brought have been recognized by the citizens of Malta and all political parties active in Malta. Likewise, Portugal, Spain, Ireland, Italy and Greece continue their successful investment migration programs, constantly refining them, as they represent a significant source of foreign direct investment for the respective countries.

Check of international suitability (“due diligence”)

The comprehensive international suitability assessment procedure is carried out on behalf of the state by world-renowned independent companies specialized in this field: Exiger from Canada and S-RM from the United Kingdom, which are licensed in Montenegro for these important tasks. This in-depth analysis takes at least one month and if the result is negative, the request is automatically rejected, without the right to appeal. If the result is correct, only then the request qualifies to be considered by the competent state authorities. And even before this analysis, brokerage agents and local banks perform preliminary checks. This verification process ensures that no undeserving individual can obtain Montenegrin citizenship, and the process directly addresses concerns about money laundering, links to terrorism, and full background and character verification of applicants.

Therefore, it cannot be understood that there are concerns about money laundering, background checks, terrorist links, etc., as is sometimes alleged. If the EU continues to be concerned about the international eligibility verification process, it could be invited to officially control this process and see for itself that it is being done according to top international standards.

Quality of applicants

The Montenegro program attracts the highest level of global entrepreneurs and investors. There are serious names from the world of the technology industry, such as the top management of Google, cosmetic and fashion industry chains, bankers, doctors who work in the most prestigious world-renowned clinics, who have already become or will soon, through this Program, become Montenegrin citizens. The quality of the applicants is the best illustration of the success of the Program. Every country in the world would like such applicants for its citizens, and that is the essence of such programs, to bring valuable individuals who support and improve the country’s development in the long term. Such individuals are unlikely to pose a risk for any migration and security reasons.
Positive economic impact

The expected economic effects, when all current applications are processed by the competent authorities, amount to 445 million euros, of which 200 million euros are direct income for the state. Investors of projects that participate in the program will receive 245 million euros, and these are funds that they are obliged to invest, within the total investment, for the construction of new hotels. If the Program continues until the anticipated 2,000 successful applications, it would mean that more than one billion euros would be generated through the Program.

These potential funds cannot be directly replaced from other sources and, significantly, they are implemented in several economically very complex years, which include the impact of the covid pandemic and the war in Ukraine. In addition, the newly built hotels will contribute to the employment of at least 2,600 hotel workers and contribute more than 100 million euros per year to the country’s GDP.

North of Montenegro

We are witnessing the development of large infrastructure projects, such as highways and ski resorts, which aim to develop the north of Montenegro. Such projects would not be possible without the Program, and certainly not with this dynamic. The new hotels will be managed by renowned hotel operators. Funds received from the Program could be used to facilitate payments for the highway, including repaying existing debt and financing further sections of the highway. Such high-profile development and construction works are of key importance for Montenegro, especially for the north, in order to position Montenegro as a globally relevant tourist and investment destination.

Innovation Fund

The primary goal of the Innovation Fund is to encourage the economic growth and competitiveness of Montenegro by increasing the innovativeness of the Montenegrin economy. Our estimates say that, thanks to this Program, the Fund will be able to receive and distribute between 30 and 40 million euros next year. This year, without the contribution of the Program, the Fund will distribute one million euros. And this could be a serious continuation of up to 130 million euros if the Program was implemented up to the full number of the planned 2000 successful applications. Contributions of funds that go to this Fund will enable the Government to, among other things, implement various projects, such as financing start-up companies for Montenegrin entrepreneurs in various fields, possible scholarships for the best students of the University of Montenegro, maybe scholarships for studying abroad for the best students or providing funds for young talents from Montenegro to stay in the country after completing their studies.
Other countries in the region

The Montenegrin program is effectively in competition with many other programs internationally and has numerous advantages compared to similar programs in other countries. Bearing in mind what countries in the region are doing, i.e. North Macedonia, which already has a program, Albania, which is now working on its introduction, and Serbia, which is also considering the idea, it is obvious that the activity of investment migration is growing in the region, regardless of the position of the EU, which no real argument based on facts. The global trend is towards greater investment migration, not less. With the developments in the region, it would be extremely harmful for Montenegro to end its very successful program now.

Conclusion
The fact-based points stated in this memorandum prove that the fears are unfounded and that the truth actually shows the opposite: The program brings significant economic and other benefits, connects Montenegro to the world, brings important, talented investors and entrepreneurs to the country, and helps to accelerate the development of Montenegro.

Termination of the program in Montenegro would not only be detrimental to the country, given the enormous benefits the program has already brought during its short period of operation, but there would simply be no other benefits to be gained from closing it down. .

Montenegro’s path to the EU is stable and, of course, Montenegro must fulfill its obligations to join the EU. But it is the sovereign right of the state to decide on all issues of its citizenship – both in international law and in the law of the European Union. The principle of the rule of law of the EU itself dictates that this is a decision for each country to decide on its own.

Investment migration is in a significant process of expansion worldwide, and it would be illogical if Montenegro did not participate in that expansion. It would be better for him to remain a pioneer of this expansion, rather than opt out of it, and simply explain to his EU partners that the economic and social benefits far outweigh the disadvantages, which are practically non-existent, and certainly the criticisms made by the EU have never been substantiated. There are no benefits for Montenegro to close its program now, only disadvantages, and this can be well explained and the EU will eventually accept these arguments because Montenegro’s position is based on facts and logical, and while it is positive for Montenegro, there no harm to the EU, local media writes.

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