The end of the era of “zero-activity companies”: 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 in practice began to be applied at the beginning of 2026, brought a number of changes to the process of issuing residence permits (VNZh).
The main and most noticeable tightening affected residence permits on the basis of business ownership (directorship). For many years in Montenegro, there was a practice whereby it was enough to simply open a company to legalize one’s stay. In many cases, these firms remained so-called “zero-activity companies” — enterprises with no real turnover, hired employees, or actual activity, used exclusively as a formal basis for living in the country.
Now this 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 confirm 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 listed in the register, but also generate funds for the regular payment of all required taxes and social contributions on the salaries of the director and employees.
- Payment of profit tax. An alternative confirmation of the reality of the business is the payment of profit tax in the amount of over 5,000 euros at year-end.
This is an important signal for those planning to renew their status next year: thinking about the new requirements, optimizing business processes, and bringing their companies to the necessary financial indicators should be done 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 directors, whose business 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 earlier 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. Interrupting the required period due to a refusal of a residence permit resets the years of residence in the country, so maintaining status becomes task number one.
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 logic of the legislative changes is not aimed at isolating the country, but at qualitatively cleaning 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 go through all stages of obtaining or renewing a residence permit in Montenegro under the new rules without risks.
Residence permit through property ownership: a new threshold of 150,000 euros
For buyers and owners of Montenegrin square meters, the key innovation is related to the changed conditions for obtaining a residence permit through property ownership.
If for many years the mere fact of owning property in many cases was considered by the 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 share 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 property falls under the new migration requirements.
The most common question today is how exactly will this value be confirmed in practice? Although enforcement practice is still in the process of formation, there is already a reliable and clear mechanism in Montenegrin law. The owner has every right to engage a licensed appraiser. An official property 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 mechanism of legalization through property purchase has been fully preserved, but has moved into a more formalized and transparent framework. For conscientious 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 medicine
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 the field of information technologies (IT) and workers in the medical sector. For these groups of professionals, 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 doctors, Montenegro is becoming a much more understandable, comfortable, and 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, serious anxiety prevailed 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 costs for maintaining a business, 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 clear up, the authorities started issuing the first explanations, and it became obvious that the practice of applying the law was not so dramatic; the overall information background 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 to the rules themselves. As soon as there was an understanding of the law’s mechanics, the level of anxiety dropped to normal values.
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 complex issues of construction legalization, many potential buyers preferred to take a wait-and-see position.
First of all, deals were put on hold by those buyers for whom the purchase of square meters was inseparably linked to solving migration issues. But the market did not come to a standstill. Moreover, against the backdrop of an 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 clear and close market showed growth in activity.
- The local population. Montenegrins have become more active in resolving their housing issues, including thanks to the development of mortgage programs and credit instruments.
- The Balkan diaspora. People living and working in Western Europe, the USA, 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 rental market, it certainly remains 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 are not recording sharp drops in square-meter prices, 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 the global sense, healthier.
The influence of the EU and new rules for construction legalization (upotrebna dozvola)
The prospect of Montenegro joining the European Union remains a powerful 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 in the foreseeable future may receive a colossal boost.
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, transaction transparency standards rise, and therefore the capitalization of quality real estate objects inevitably grows as well. Therefore, buying today is a bet on future growth.
However, the buyer has changed. They have become more demanding and more level-headed. If earlier 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, the real prospects for liquidity, and guarantees of obtaining a residence permit.
Special attention should be paid to the issue of legalization. For Montenegro, this is historically a difficult issue: a significant part of the housing stock in one way or another has incomplete documentation or lacks a use permit (upotrebna dozvola). Any movement in this area is instantly reflected in the liquidity of the entire market.
On February 13, 2026, important amendments to the legislation were adopted, which potentially open 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-sale and lending transactions without the strict restrictions of the past.
For the market, this is a positive signal. In fact, the state is giving the opportunity 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, a certain degree of uncertainty in procedures still remains — the market is waiting for clarifications on exactly how these norms will be applied by notaries, cadastral authorities, and banks. But the direction has been set absolutely correctly.
💡 Note: To make the purchase safe, MD Realty specialists conduct a full property audit before the transaction and help resolve any issues with the cadastre and legalization of properties (upotrebna dozvola).
MD Realty forecast: is it worth buying, and where exactly?
Summing up the past months, we can say with confidence: Montenegro’s basic advantages have not disappeared. It remains 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 high-quality, and emotions will give way to cold calculation.
At MD Realty, we definitely recommend considering Montenegro for property purchase, but you need to approach this process with a clearly defined goal:
- Investments and capital preservation. If your main task is to protect your funds and earn from value 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 asset liquidity.
- Personal living and relocation. If you are looking for a home for yourself and your family, investment logic moves into second place. You need to choose a location based on your lifestyle. Critically important factors become year-round infrastructure, the availability of quality schools, medical institutions, transport accessibility, the absence of dense summer development, and the level of noise. 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 at the same time have steady demand for long-term rentals in winter from expats or the local population.
The main takeaway of early 2026: Montenegro’s 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, ill-considered demand disappears, the most reliable opportunities for the smart buyer open up.
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