The effects of the economic citizenship program are that over two thousand foreigners from 73 countries have purchased Montenegrin citizenship based on an investment of 250 million euros and payment of fees of 74 million euros. 238 applications have been rejected, while another 15 are in various stages of consideration.
This was stated in the information on the status of the project as of December 31st last year, which was adopted by the Government.
Vlada Duško Marković On November 22, 2018, the Ministry of Foreign Affairs of Montenegro adopted a Decision on the criteria, manner and procedure for selecting persons who can acquire Montenegrin citizenship by admission for the implementation of the Special Investment Program of Special Importance for the Economic Interests of Montenegro.
Along with the apartment, the chosen ones also received a passport
According to this decision, an interested foreigner - applicant can acquire Montenegrin citizenship by admission under a special program if he has deposited an amount of at least 450.000 euros into an escrow account (transition account), for the purpose of investing in one of the development projects in the capital city of Podgorica or the coastal region of Montenegro, or an amount of at least 250.000 euros, for the purpose of investing in one of the development projects in the northern or central region of Montenegro.
Based on the decision, the then Ministry of Sustainable Development and Tourism issued a Public Call for Expressions of Interest on 26 February 2019 for projects to be included in the List of Development Projects in the Field of Tourism. However, most of the development projects were so-called condo hotels - a building with apartments and suites that formally functions as a hotel, in which foreigners who buy an apartment have the opportunity to obtain Montenegrin citizenship along with it.
Among the accepted projects were the construction of 12 hotels - seven in Kolašin ("Breza", "Bjelasica 1450", "K16", "D" with annex "E", "Montis hotel & resort", "Magnum" and "B"), one each in Žabljak ("Durmitor Hotel and Villas"), Tivat ("Boka Place") and Budva ("Cruiser") and two in Bar ("Amma Resort" and "Liko Soho").
One project in the field of agriculture and processing industry (apple plantation in Pljevlja) worth half a million euros was reported, but it was not implemented.
The EU has criticized the project since 2019.
The application period for this program was until December 31, 2022, as the European Union requested that it be terminated. Following new demands from the EU for Montenegro to terminate this project because they consider it a security risk, the Government in December 2021 limited the number of applications until the end of 2022.
In February 2022, the European Union delegation to Montenegro again called for the economic citizenship scheme to be abolished, as well as regretting the decision to extend the program for a year.
In 2019, the European Commission assessed that the schemes through which citizenship is obtained qualify as a security risk due to the possible infiltration of organized crime, money laundering, tax evasion and corruption. The EC report also states that such schemes in countries that are not members of the EU and have a visa-free regime with the EU (such as Montenegro) can be used to bypass the procedure for shorter stays in the EU via visas.
“The risks to the public policies and security of the EU and its Member States are significantly increased in the absence of previously effective residency requirements and may constitute grounds for the suspension of the visa waiver programme, as recently proposed for Vanuatu,” the EU Delegation’s letter from February 2022 states. They also requested that adequate oversight be carried out on persons who have obtained such citizenship.
The European Commission also pointed out this problem in Montenegro in its enlargement report from November 2023.
“The controversial economic citizenship program, which supported public revenues but conflicted with the country's EU obligations, expired at the end of 2022. However, many unprocessed applications continued to be considered even in 2023,” the report says.
Ćoćo, Statis, Bemax,... also profited.
This project, in addition to its problems with the EU, has also been criticized because the list of priority projects includes investments from controversial businessmen close to the former regime. Thus, three projects in Kolašin (“K16”, “D” with annex “E” and hotel “B”), i.e. on Zoran Ćoća Bećirović, and the sale of these properties is also handled by the company "Kolašin Valleys", owned by his son Luka Bećirović, but also the sons of former high-ranking officials Blazo Djukanovic i Marko Gvozdenović. Also the project “Durmitor Hotel and Villas” is owned by Petros Statis, and “Cruiser” was launched by the company Bemax.
Total investments in all 12 hotels are estimated at 350,7 million euros, and the projected number of accommodation units (apartments, suites and rooms) is 2.333.
The information states that, according to auditors' reports, 247,6 million euros were invested in these projects by the end of December, and that, according to the records of the Investment Agency, there are another 6,15 million euros in escrow accounts, which were deposited by applicants whose applications are still being considered by the competent institutions.
According to data from the Central Account of the State Treasury, the total amount of administrative fees paid from the beginning of the program's implementation until December 30 last year amounts to 43,5 million euros, and an additional 30,8 million euros is in the account of the Innovation Fund.
The fee for economic citizenship since the beginning of the program has been 100 thousand euros per application, and from 2021 an additional fee for the Innovation Fund of 100 thousand euros has been introduced.
From the beginning of the project until the end of 2022, a total of 1.113 applications were submitted, relating to obtaining citizenship for the investor and his family members (spouses and children). Of this number, the Ministry of Interior approved 860 applications, rejected 238, and the remaining 15 are in various stages of consideration.
Russians received the most passports, followed by the Chinese
In September last year, the Center for Civic Education (CCE) published data showing that from the beginning of the project until June 10 last year, Montenegro had granted 2.074 economic citizenships.
Of that number, more than half (1.055) were given to people of Russian origin.
"The top 10 most common countries of origin of applicants, in addition to Russia, also include China (190), the USA (107), Ukraine (59), Vietnam (49), Lebanon (45), Belarus (43), South Africa (40), Turkey (39) and Egypt (38). An additional 363 applicants are from 63 different other countries, dominated by Asian and African countries, while the CCE does not have data on origin for 63 new citizens," the CCE announced.
Montenegrin citizenship in accordance with the Economic Citizenship Program, as they stated at the time, has so far been denied only to those originally from the continents of South America and Antarctica.
One project completed in the prosecutor's office
The “Magnum” project from Kolašin was subsequently removed from the list, and an investigation into it was launched by the Special State Prosecutor's Office.
In early December, the government announced that it would hand over to SDT the documentation regarding the construction of the Magnum hotel in Kolašin, after it was determined that the company had submitted a false guarantee regarding the project. The guarantee was for the amount of 2,5 million euros, and was provided by the Italian bank Credit Agricole.
The government previously initiated the procedure for collecting the guarantee after the company failed to complete the construction of the hotel within the planned deadline. The company committed to completing the project by October 30, 2024, which was not done.
The company “Magnum Development”, owned by Veselin Bečanović, did not submit the requested documents, but instead informed the Government that they had begun negotiations with commercial banks in Montenegro to issue a new bank guarantee to cover the extension of the project's completion period. The company announced late last year that it had completed 90 percent of the rough work and expected to complete the entire hotel in December 2025. Magnum Development claims that the validity of the guarantees was checked with the bank on December 23, 2021.
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