How the New Law on Foreigners Has Affected the Real Estate Market in Montenegro
The end of last year and the beginning of 2026 became a period of serious challenges and transformation for Montenegro’s immigrant community and real estate market. The adoption of the new law on foreigners, heated discussions about rules for legalizing construction, and new economic realities created a perfect storm in the market. Slava Maevski, founder of the MD Realty real estate agency in Montenegro, explains how the rules of the game have changed, who has come out ahead, who will need to rethink their strategies, and what is happening with housing prices now.
The End of the “Zero-Activity Company” Era: How the Rules for Obtaining Residence Permits Through Business Have Changed
The new Law on Foreigners, which was adopted in the final days of last year and effectively began to be applied at the beginning of 2026, brought a number of changes to the process of issuing residence permits (residence permits).
The main and most noticeable tightening affected residence permits on the basis of business ownership (director status). For many years in Montenegro, there was a practice whereby simply opening a company was enough to legalize one’s stay. In many cases, these companies remained so-called “zero-activity companies” — businesses with no real turnover, no hired employees, and no actual operations, used solely as a formal basis for residing in the country.
That tool is no longer available. The state has made it clear: for a residence permit to be successfully renewed, the company must be active. The new requirements oblige foreigners to prove real business activity and strict compliance with tax obligations to Montenegro. In practice, this means two possible scenarios:
Regular payment of salaries. The company must not only be registered in the registry, but also generate funds to regularly pay all required taxes and social contributions on the salaries of the director and employees.
Payment of profit tax. An alternative confirmation of a real business is payment of profit tax in the amount of more than 5,000 euros for the year.
This is an important signal for those planning to renew their status next year: they need to start thinking about the new requirements, optimizing business processes, and bringing their companies to the necessary financial indicators now, without waiting until the moment of submitting documents to the MUP (Ministry of Internal Affairs).
Vulnerable groups and risks for those planning permanent residence
The new legislative norms hit two categories of foreigners the hardest. The first is those nominal company directorswhose businesses existed only on paper. The second, and much more important group, is people who were building a long-term strategy and planned to obtain
permanent residence (PR).
The problem is that under Montenegrin law, obtaining PR requires five years of continuous and legal residence in the country on the basis of a residence permit. If previously the annual renewal process was largely a technical formality, now it is precisely at the extension stage that the most checks, requirements, and, as a result, legal risks arise. An interruption in the residence record due to a refusal of a residence permit nullifies years of living in the country, so maintaining status becomes the number one task.
At the same time, it would be fundamentally wrong to claim that Montenegro is closing its doors or that obtaining a residence permit has become radically more difficult. The very logic of the legislative changes is aimed not at isolating the country, but at qualitatively cleansing the system of fictitious grounds. The state seeks to make migration policy less formal and more focused on those who truly integrate into the economy.
💡 Note: MD Realty experts will help you assemble the correct set of documents and safely go through all stages of obtaining or renewing a residence permit in Montenegro under the new rules.
Residence Permit Through Property Ownership: New Threshold of 150,000 Euros
For buyers and owners of Montenegrin real estate, the key innovation is the change in the conditions for obtaining a residence permit through property ownership.
If for many years the mere fact of owning real estate was in many cases considered by government authorities to be a sufficient basis for issuing a residence permit, now the rules of the game have become stricter: a clear minimum property value threshold has been introduced. As of today, this amount is fixed at 150,000 euros.
For a significant portion of owners, especially those who purchased inexpensive properties in non-resort areas, this means the need to urgently audit their assets and check whether their real estate falls under the new migration requirements.
The most common question today is how exactly this value will be confirmed in practice? Although law enforcement practice is still in the process of forming, there is already a reliable and clear mechanism in Montenegrin legal practice. The owner has every right to engage a licensed appraiser. An official real estate valuation report prepared by such a specialist is an absolutely legitimate document. It has legal force and must be accepted by government agencies as direct confirmation of the property’s value.
Thus, the legalization mechanism through property purchase has been fully preserved, but it has moved into a more formalized and transparent framework. For bona fide buyers and investors, this is not a closure of opportunities, but the establishment of clear rules of the game.
Who benefits? Green light for the IT sector and healthcare
It would be a mistake to view the new law solely through the prism of tightening. The document includes serious preferences for those categories of foreigners that Montenegro’s economy needs most today.
The main positive changes affected specialists in information technology (IT) and workers in the medical sector. For these professional groups, the law opened the possibility of obtaining a residence permit immediately for a longer period — up to three years.
This is an unprecedented step that dramatically improves conditions for qualified professionals. Montenegro is sending the market a very clear positive signal: the country remains interested in intellectual capital, in those who truly work, bring value, and plan to live here seriously. For IT specialists and medical professionals, Montenegro is becoming a much clearer, more comfortable, and more predictable jurisdiction for long-term life and tax planning.
Market psychology: has the trust crisis passed?
Any sharp changes in legislation inevitably cause turbulence. The most nervous and emotionally tense period came during the active discussion of the draft law and the first weeks after its official adoption. In the period from October to December of last year, as well as throughout January 2026, there was serious anxiety in the real estate market and within the immigrant community.
It is important to note that people were frightened not so much by the text of the new law itself, but by the total lack of clarity regarding how exactly it would be applied in practice. The information vacuum was quickly filled with the harshest scenarios and rumors: mandatory hiring of local employees, colossal additional business maintenance costs, and new, unworkable requirements were being discussed.
Against this backdrop of acute uncertainty, some foreigners did indeed decide to leave the country or, at the very least, put their investment and life plans related to Montenegro on a hard pause.
However, as often happens, reality turned out to be much more prosaic than the fears. When the situation began to become clearer, the authorities started issuing the first explanations, and it became obvious that the law’s practical application was not so dramatic, the overall information climate noticeably stabilized.
Today we can confidently state: there is no mass exodus of foreigners from Montenegro. The main wave of panic has subsided. Most expats and investors have taken a balanced, pragmatic position. The market has gone through a typical period-of-change story, when the reaction to uncertainty is always sharper than the reaction to the rules themselves. As soon as there was an understanding of how the law works, the level of anxiety dropped to normal.
Transformation of the housing market: who is buying property today?
Speaking about the law’s impact on the real estate market, it is important to understand the context. The new law did not appear in a vacuum. Even before its official entry into force, the market was already in a phase of some cooling and caution. And when discussions of the Law on Foreigners overlapped with the complex issues of construction legalization, many potential buyers preferred to take a wait-and-see position.
First of all, transactions were put on hold by those buyers for whom the purchase of real estate was inseparably linked to solving migration issues. But the market did not come to a standstill. Moreover, against the backdrop of the outflow of “visa” buyers, other, more fundamental segments of demand became noticeably more active.
Citizens of Serbia. A traditionally strong segment of buyers, for whom Montenegro is a familiar and close market, showed increased activity.
Local population. Montenegrins became more active in solving their housing needs, including thanks to the development of mortgage programs and credit instruments.
Balkan diaspora. People living and working in Western Europe, the United States, or Australia are increasingly returning to the idea of buying property in their homeland. For them, it is a family asset, a summer residence, or a reliable investment for the future.
European investors. Buyers from EU countries maintain steady interest. For this category, the migration factor (obtaining a residence permit) often does not matter at all. Montenegro attracts them with its excellent climate, proximity to the sea, growing tourism potential, and prospects for return on investment.
As for the long-term rentalmarket, it is certainly sensitive to migration fluctuations, but we do not see any systemic collapse or empty cities. The market is now going through a natural period of adaptation and redistribution of demand. As for housing prices, a phase of restructuring is also visible here. We do not record sharp drops in the cost per square meter, but the previous emotional overheating, when prices rose solely on speculative demand, is a thing of the past. The market is becoming more rational, predictable, and, in a global sense, healthier.
The impact of the EU and new rules for construction legalization (upotrebna dozvola)
The prospect of Montenegro joining the European Union remains the strongest fundamental factor that continues to fuel interest in local real estate. For a serious investor, Montenegro is not just a beautiful country for vacation, but also a promising developing market that may receive a tremendous boost in the foreseeable future.
The logic of major investors is transparent: as the country takes steps toward the EU, international trust in the jurisdiction inevitably grows. This is followed by an influx of foreign institutional capital, transparency standards for transactions rise, and therefore the capitalization of quality real estate inevitably increases as well. Therefore, buying today is a bet on future growth.
However, the buyer has changed. They have become more demanding and more rational. If before the questions were mainly about the view from the window and the distance to the beach, now the focus is on the legal cleanliness of the property, real liquidity prospects, and guarantees of obtaining a residence permit.
Special attention should be paid to the legalization issue. For Montenegro, this is historically a difficult issue: a significant part of the housing stock in one way or another has incomplete documentation or does not have an occupancy permit (upotrebna dozvola). Any developments in this area are immediately reflected in the liquidity of the entire market.
On February 13, 2026, important amendments to the legislation were adopted, potentially opening the door to the free circulation of properties without upotrebna dozvola. If this mechanism works at full strength, such properties will be able to participate in purchase and sale and lending transactions without the strict restrictions of the past.
For the market, this is a positive signal. In effect, the state is making it possible to gradually bring a huge stock of real estate, which for many years was considered problematic or had reduced liquidity, into full economic circulation. At the beginning of spring, some uncertainty still remains in the procedures — the market is waiting for clarification on how exactly these norms will be applied by notaries, cadastral authorities, and banks. But the direction is absolutely correct.
💡 Note: To make a purchase safe, MD Realty specialists conduct a full property audit before the transaction and help resolve any issues with the cadastre and property legalization (upotrebna dozvola).
MD Realty Forecast: Is It Worth Buying and Where Exactly?
Summing up the last few months, we can confidently say: Montenegro’s basic advantages have not gone anywhere. It is still a safe, incredibly beautiful, compact country with a stunning climate and huge tourism potential. Interest in real estate is returning, and the market is preparing for gradual stabilization after a period of turbulence. Demand will become more qualitative, and emotions will give way to cold calculation.
At MD Realty, we definitely recommend considering Montenegro for property purchase, but the process should be approached with a clearly defined goal:
Investment and capital preservation. If your main task is to protect funds and earn on price growth or rental income, your choice is the coastal regions. Budva, Tivat, Kotor, and promising developing locations around them. This is where the highest tourist traffic and stable demand from foreign buyers remain, which guarantees high liquidity of the asset.
Personal residence and relocation. If you are looking for a home for yourself and your family, investment logic moves to the background. You need to choose a location based on your lifestyle. Year-round infrastructure, the presence of quality schools, medical facilities, transport accessibility, the absence of dense summer construction, and noise levels become critically important. In this case, the choice may fall on quieter regions.
Combined strategy. If you plan to live in Montenegro for several months a year and rent out the apartment the rest of the time, look for a balance. Choose locations that are popular with tourists in summer but also have stable demand for long-term rentals in winter from expats or the local population.
The main conclusion of early 2026: the Montenegrin real estate market requires a much more thoughtful and professional approach than it did a few years ago. But it is precisely this transformation that makes it so attractive. Where chaotic, poorly considered demand disappears, the most reliable opportunities for the smart buyer open up.
💡 We will find property tailored to your goals: MD Realty experts will prepare a free personalized selection of verified properties that perfectly match your goals and budget. Leave a request for a consultation.
How the New Law on Foreigners Has Affected the Real Estate Market in Montenegro
