Montenegro has formally started drafting a law to screen foreign investments on national-security and public-order grounds, adding a new regulatory layer that could affect acquisitions and major investment transactions.
The Ministry of Economic Development opened a 15-day public consultation on the planned Law on Screening of Foreign Investments on Sept. 11, with comments due by Sept. 26.
The move advances an initiative previously endorsed by the government and begins the legislative process for creating Montenegro’s first comprehensive foreign-investment screening mechanism.
The government says the regime is intended to protect security and public order while bringing the country’s investment-review framework closer to European practice.
The ministry is expected to act as the central screening authority, supported by an inter-institutional body, while final decisions on sensitive transactions would remain with the government under the model outlined so far.
For investors, the significance is straightforward: Montenegro is moving from an overwhelmingly open FDI framework toward one in which some transactions could require additional review before completion.
The exact scope of mandatory review, transaction thresholds and investor categories will depend on the final legislation.
Montenegro has traditionally relied heavily on foreign capital to finance development.
Gross foreign direct investment reached around €457 million in the first half of 2026, with property investment accounting for roughly €238 million and investment into domestic companies and banks about €72 million.
That dependence means the government will need to design the system carefully.
A screening mechanism that is too broad or unpredictable could increase transaction timelines and legal uncertainty, while one that is too narrow could fail to address the risks the legislation is intended to cover.
The likely objective will therefore be targeted review rather than general restrictions on foreign investment.
Comparable regimes typically examine issues such as control of critical infrastructure, sensitive technology, energy supply, personal data and other areas where ownership can have implications beyond the commercial value of a transaction.
For Montenegro, the change marks a shift in investment policy.
For much of the past two decades, the emphasis has been on attracting capital. The new framework would require authorities to look more closely at the identity of investors, ownership structures and the implications of particular transactions.
The timing is significant because Montenegro is entering a large investment cycle involving energy, transport, tourism infrastructure and logistics, with foreign companies and financiers expected to provide a substantial share of the capital.
The rules would not necessarily prevent such investment, but some deals could face additional conditions or longer approval procedures.
The regime could also affect mergers and acquisitions involving existing Montenegrin companies.
Investors conducting due diligence may eventually need to assess not only competition and sectoral approvals but also whether a transaction triggers foreign-investment review.
That could influence transaction documentation.
Share purchase agreements may require additional regulatory conditions, longer closing deadlines and clearer allocation of risk if approval is delayed or granted subject to conditions.
For lenders, the regime could also become relevant where financing structures provide significant control rights or where enforcement could result in ownership of an asset covered by the law.
The legislation could therefore affect private equity, infrastructure funds, strategic buyers and some complex financing arrangements, not only traditional greenfield FDI.
The government has indicated that the legislation will be prepared within an 18-month framework following its latest conclusions, suggesting the system may not become fully operational immediately.
That gives businesses and advisers time to prepare.
The main questions will be which transactions require notification, what thresholds apply and how quickly authorities will be required to decide.
Those details will determine whether the regime becomes a limited additional compliance step or a more material consideration in Montenegro-focused transactions.
For a country that remains heavily dependent on foreign capital, the challenge will be to introduce greater scrutiny without undermining investment certainty.
The effectiveness of the new framework will ultimately depend less on how many deals it reviews than on whether the rules are clear, predictable and applied within commercially workable deadlines.
