Montenegro’s prospective entry into the European Union will give foreign companies easier access to its economy, but domestic businesses believe their knowledge of local consumers could offset the financial and operational advantages of larger European rivals.
Business leaders said EU integration would raise competitive pressure across retail, construction, banking and other industries, while also forcing Montenegrin companies to improve governance, planning and compliance. Yet entrants from larger markets may struggle to understand local purchasing habits and the commercial dynamics of an economy with a population of just over 620,000.
The discussion took place at the fourth international Financial Markets of Montenegro conference, during a panel moderated by Bankar editor-in-chief Ivana Boljević.
Ljubomir Šćepanović, founder and president of EXPO Commerce and chairman of retailer Domaća Trgovina, said the group was preparing for EU-related disruption by strengthening internal predictability and long-term planning. The businesses under his leadership employ about 3,000 people, giving the group significant exposure to changes in labour mobility, wages and retail competition.
Šćepanović said established European companies would enter Montenegro with stronger balance sheets, access to cheaper financing and experience operating in the EU single market. Their size would provide an immediate advantage, but attempts to change consumer behaviour too quickly could generate losses.
International companies are generally less tolerant of repeated underperformance in small markets. Two consecutive negative reporting periods could place local management teams under pressure, making disciplined market entry more important than aggressive expansion.
Companies from Croatia and Slovenia may present the most direct competitive challenge. Their proximity, experience in former Yugoslav markets and familiarity with regional consumer preferences give them advantages that more distant European groups may lack.
Montenegro’s domestic retail sector is already concentrated around several established operators with extensive store networks, supplier relationships and local brands. The country’s largest retail chains generated combined revenue of around €1.1 billion in 2024 and net profit of approximately €36.5 million, illustrating both the size of household consumption and the sector’s relatively narrow margins.
EU entry could increase competition through easier cross-border supply, stronger consumer-protection standards and stricter application of state-aid and competition rules. It may also lower some procurement costs, but domestic retailers would face greater pressure to invest in logistics, digital services, employee retention and private-label products.
Blagota Radović, owner and chairman of construction company Zetagradnja, said expansion beyond Montenegro required a gradual strategy based on quality, persistence and strong professional networks. Zetagradnja operates across former Yugoslav and EU markets, giving the company direct experience of different regulatory systems.
Radović said each market had its own institutional and commercial characteristics. Slovenia offered a more advanced and predictable administrative environment, while companies in Montenegro and Serbia continued to encounter heavier bureaucracy and inconsistent implementation of regulations.
For businesses from small economies, large foreign markets can be difficult to enter through ambitious, capital-intensive expansion. Companies need to identify a realistic niche, build a track record and secure reliable legal advice before committing substantial funds.
The contrast also works in the opposite direction. Montenegro’s small size means that a single regulatory decision, investment or large competitor can have a disproportionate effect on prices, employment and profitability. Administrative measures that might create limited disruption in a larger economy can reshape an entire industry in Montenegro.
Šćepanović said predictability was therefore central to investment planning. Changes introduced without adequate consultation, particularly when applied retroactively, can quickly undermine budgets and business plans. He cited administrative measures introduced in Serbia that pushed an entire industry into losses before officials adjusted the rules following discussions with affected companies.
EU membership should gradually constrain that kind of regulatory volatility through clearer procedures, stronger institutions and closer judicial oversight. For investors, greater legal certainty could reduce the risk premium attached to Montenegrin projects and improve access to longer-term bank and capital-market financing.
The transition will nevertheless create pressure on the labour market. Free movement may encourage some Montenegrin employees to seek higher wages elsewhere in Europe, deepening existing staff shortages. Companies with large workforces will need to raise productivity, improve career prospects and offer more competitive compensation to retain trained employees.
Capital-market development emerged as another priority. Montenegro’s stock exchange remains shallow, and privately owned companies still rely predominantly on retained earnings and bank loans rather than public share or corporate-bond issuance.
Radović said discussions were under way for Lovćen Banka to offer shares to the public. A successful offering would be a notable step for the domestic market, potentially broadening investment options for households and institutional investors while creating a reference point for future equity transactions.
The move would also test whether local investors are prepared to shift savings from bank deposits and real estate into productive companies. Persistent inflation has weakened the real return on conventional savings, but the scarcity of liquid securities and limited corporate disclosure have constrained alternatives.
Radović also said he and a group of seven or eight entrepreneurs were interested in taking over Airports of Montenegro and financing their modernisation. The proposal reflects growing private-sector interest in one of the country’s most important infrastructure assets as passenger volumes increase and existing terminals approach capacity during the summer season.
Any transaction involving the airports would require a transparent ownership and financing structure, clear investment obligations and strong regulatory supervision. Modernisation could improve connectivity, tourism revenue and Montenegro’s attractiveness to foreign investors, but the asset’s strategic importance makes the choice of operating model politically and economically sensitive.
Construction presents a different risk. Radović described the market as disorderly, with weak protection for property buyers and the entry of developers without an established record. He warned that Montenegro could repeat aspects of Slovenia’s experience during the global financial crisis, when excessive property development and leveraged construction companies suffered severe losses.
The banking sector is more tightly regulated. Radović credited the Central Bank of Montenegro with strengthening supervision and improving financial stability in recent years. That regulatory discipline is particularly important because real-estate lending, tourism investment and household credit remain closely connected to the broader economic cycle.
Domestic companies regard EU accession as positive, but not commercially neutral. European integration will widen market access in both directions: Montenegrin businesses will gain a clearer route into the single market, while larger EU companies will face fewer obstacles to entering Montenegro.
Local knowledge will remain an asset, but it will not permanently protect inefficient operators. Companies combining that knowledge with stronger governance, patient expansion and access to capital will be best placed to defend their domestic position and grow abroad. The immediate contest will not simply be between large European groups and small Montenegrin firms, but between companies able to plan through regulatory change and those still dependent on the informal practices of a protected local market.
