NewsMontenegro's foreign direct investment landscape: Trends, shifts, and 2023 outlook

Montenegro’s foreign direct investment landscape: Trends, shifts, and 2023 outlook

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In the previous year, Montenegro witnessed a total inflow of foreign direct investments amounting to EUR 856.99 million, as indicated by preliminary data from the Central Bank of Montenegro (CBCG). This reflects a decline of 25.59% compared to the figures of 2022, attributed to a reduction in investments related to intercompany debt, as well as investments in companies and banks, alongside the withdrawal of foreign investments.

The data further discloses that the net inflow of foreign direct investments stood at EUR 428.67 million, marking a significant 45.23% decrease compared to the previous year.

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Within the category of equity investments, an inflow of EUR 558.44 million was recorded, constituting 65.16% of the overall inflow. In the breakdown of equity investments, the segment covering investments in companies and banks amounted to EUR 95.26 million, signifying a notable decline of 56.58% – as outlined in the Central Bank Bulletin.

Conversely, the data also reveals a positive trend in real estate investments, indicating a growth of 3.33%, totaling EUR 463.18 million. Notably, this sector remains the only one experiencing an increase in foreign direct investments.

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The inflow of FDI in the form of intercompany debt reached EUR 264.65 million, contributing to 30.88% of the total inflow. This signifies a 34.09% reduction compared to the previous year – the report stated.

The majority of investments continue to originate from Serbia, with citizens of this country injecting approximately EUR 125.26 million. Following closely are Russian investors with contributions amounting to EUR 112.5 million. Turkish citizens secure the third position, having invested EUR 85.26 million in Montenegro throughout the last year. Investments from Germany accounted for EUR 72.87 million, Swiss investors contributed EUR 64.87 million, and U.S. citizens added EUR 53.4 million.

Analyzing the investment structure concerning citizens of these countries, real estate investments emerge as the predominant choice. Serbian citizens lead in this category, directing EUR 78.3 million towards real estate. Russians follow suit, having invested in real estate assets totaling EUR 55.95 million, while Turkish citizens allocated nearly EUR 51 million. U.S. citizens directed approximately EUR 34.3 million into real estate, with Swiss investors contributing just over EUR 13 million. Notably, in the case of Switzerland, a significant portion of the investment pertains to intercompany debt, totaling EUR 41.15 million.

The overall outflow of foreign direct investments in 2023 reached EUR 428.32 million, marking a 16.06% increase compared to the comparative period.

Outflows attributed to resident investments abroad amounted to EUR 91.92 million, while withdrawals of funds from non-residents invested in Montenegro reached EUR 336.40 million – concludes the published report.

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