Residency in Montenegro – Interview with Jonathan Howe

Montenegro continues to be a highly attractive destination for people looking to relocate — whether for lifestyle, a simpler pace of life, or strategic access to Europe. For many, it offers a rare combination of financial efficiency, low bureaucracy, and a Mediterranean quality of life that is increasingly hard to find elsewhere.

Following significant amendments to the Law on Foreigners that recently entered into force, Peter Flynn spoke with Jonathan Howe, founder of Montenegro Guides and expert in Montenegro's residency regulations, who provides specialised support to foreign nationals relocating to Montenegro.

Key Takeaways

• Two-tier system now in force: EU/EFTA citizens are exempt from the €150,000 property minimum and €5,000 company tax requirements
• UK citizens: Post-Brexit, treated as third-country nationals — subject to the full €150,000 minimum and €5,000 tax requirement
• Property route: €150,000 minimum for non-EU/EFTA nationals, evidenced by transfer-tax decision; no minimum for EU/EFTA nationals
• Property-based residency caveat: Official government guidance states this does not count toward permanent residence qualification
• Company route: €5,000 annual tax requirement for non-EU/EFTA nationals holding 51%+ ownership; EU/EFTA nationals fully exempt
• Grandfathering: Permits issued before 17 January 2026 can renew without meeting the new thresholds
• IT/Healthcare routes: Up to 3-year permits (renewable once for a further 3 years) with 12-month employment contracts
• Status: Law entered into force 17 January 2026; implementing regulations expected within 12 months
• Tax rates: Personal income tax now 0%/9%/15% progressive on salary; corporate tax 9%–15% progressive

Why are more people choosing to make Montenegro their home?

"For most people I work with," Jonathan explains, "the decision to relocate to Montenegro is based on four things: lifestyle, climate, cost of living, and taxation. Montenegro offers advantages in each of those areas, provided everything is set up correctly from the beginning."

Although costs have risen over the past few years, Montenegro still remains more affordable than the UK, US, and most EU countries. Many clients also see Montenegro's future EU membership as a long-term advantage. Establishing residency now may simplify things considerably in the years ahead.
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How does the residency process work in practice?

There are two primary routes to residency in Montenegro: real-estate ownership, and company incorporation with a work and residence permit. Each comes with its own requirements, and both were significantly affected by amendments that entered into force on 17 January 2026.
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Residency Through Property Ownership

"This remains one of the most straightforward paths," Jonathan notes, "though the requirements are now more restrictive for many non-EU nationals than they were before 2026."

For many third-country nationals, the property must now have a taxable value of at least €150,000, evidenced by the transfer-tax decision issued by local authorities. However, EU citizens and their family members (regardless of the family member's nationality), as well as citizens of Iceland, Liechtenstein, Norway, and Switzerland, are exempt from that value threshold.

For all applicants, the property must meet the following conditions:

• Be a legally registered residential dwelling with proper occupancy permits
• The applicant must own at least 50%, or be the married spouse or dependent child of the owner
• Applicants are typically required to show a minimum of €7,300 in a Montenegrin bank account at the time of application
• Maintain local health insurance
• Maintain a clean criminal record

Important note: Property-based residence remains temporary, renewed annually, and does not grant work rights. Official government guidance states that property-based temporary residence does not count toward permanent residence qualification.

Grandfathering provision: Permits issued before 17 January 2026 on the basis of real-estate ownership can be extended without demonstrating the new property value threshold.
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Residency Through Company Incorporation

"The company route is popular with entrepreneurs and location-independent professionals who need work rights," Jonathan explains. To qualify, you typically register a company in Montenegro and employ yourself as the executive director or hold a significant ownership stake.

For non-EU/EFTA nationals: Registered entrepreneurs and employee-directors who personally own more than 51% of the company can extend their permit only if the company paid at least €5,000 in taxes and contributions in the previous year.

"This is a much more pragmatic approach than arbitrary employee headcounts," Jonathan notes. "The €5,000 threshold proves you're running a real business without forcing you to hire people you don't need."

For EU/EFTA nationals: EU citizens and their family members, as well as citizens of Iceland, Liechtenstein, Norway, and Switzerland, are exempt from the €5,000 tax requirement.

All company-based residency applications must demonstrate:

• Genuine ongoing business activity
• Regular payment of taxes and social contributions
• A legitimate operational presence in Montenegro

A spouse and dependent children can obtain residency through family reunification under this route.
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What happened with the December 2025 proposals?

The path to these changes was anything but straightforward. Throughout 2025, the government circulated various proposals that sparked intense debate. An initial July draft required companies to employ three people, including one Montenegrin citizen. By November, this had hardened to three employees with two being Montenegrin — a requirement that prompted immediate pushback.

The German-Montenegrin Business Club and UANCG (the Association of Real Estate Agencies of Montenegro) argued that arbitrary employee quotas made no economic sense for small businesses and would discourage genuine investors while doing little to prevent abuse. Following intense lobbying, the government withdrew its November proposals and submitted revised amendments in December.

Current status: The amendments were passed by Parliament on 31 December 2025 and entered into force on 17 January 2026. The final property threshold is €150,000 rather than the €200,000 mentioned in earlier drafts, and existing property-based permit holders can renew without meeting the new threshold. Implementing regulations are expected within 12 months of the law's entry into force.

Brexit consequences: UK citizens, now treated as third-country nationals, face the full €150,000 property minimum and €5,000 company tax requirement. The only exception is UK nationals who are family members of EU citizens.

What about the new IT and healthcare fast-track routes?

"These are welcome additions and they apply to all nationalities," Jonathan points out. Foreign employees in IT and healthcare can obtain an integrated work-and-residence permit if their employment agreement is for at least 12 months. That permit can be granted for up to three years, renewable once for a further three years.

"These routes should make relocation more straightforward for qualified professionals in these sectors."

How does the UK's Brexit status affect British buyers?

"This is one of the biggest impacts," Jonathan observes. "UK citizens are now treated as third-country nationals — the same as Russians, Americans, or Australians."

For UK citizens, the following requirements now apply:

• Subject to the full €150,000 minimum for property-based residency
• Subject to the €5,000 annual tax requirement for company-based residency
• No exemptions apply

The one exception: UK citizens who are family members of EU citizens (for example, married to an EU national) may qualify under the family member exemption.

"Brexit has real practical consequences here. British buyers who were considering Montenegro for residency should understand they're now in a different category than their European neighbours."

Is buying property still the simplest path to residency?

"Yes — for most people who can meet the requirements, it still is," Jonathan confirms. "The property route requires the fewest moving parts. You're buying something tangible, and you're contributing to Montenegro's economy in a clear way."

For families, retirees, and remote workers who don't need local work rights, property-based residency remains the cleanest option. "That said, some people buy a qualifying home for living purposes and still register a company separately for work. The two routes are not mutually exclusive — you can pursue both if your circumstances require it."

For EU and EFTA nationals, "the property route has actually become even more attractive since they're not constrained by the value threshold."

How long does residency last, and how easy is renewal?

Temporary residence is issued for up to one year, renewable annually. Permanent residence is generally available after five consecutive years of qualifying lawful residence. Official government guidance states that property-based temporary residence does not count toward permanent residence qualification.

Renewals require demonstrating continued compliance with the applicable requirements — whether property ownership standards or company activity thresholds. "The authorities are becoming more aligned with European standards. Renewals are no longer a formality — they're linked to continued compliance."

What rights and benefits come with residency?

Temporary residents can:

• Open local and international bank accounts
• Buy, import, and register a vehicle
• Bring their spouse and dependent children
• Live in Montenegro long-term

Work rights vary by route. Property-based residency grants no work rights. Company-based residency allows you to work through your registered company. The IT and healthcare routes permit work for the sponsoring employer.

Healthcare access depends on your route and home country eligibility. Company directors and employees who are not eligible for healthcare in their home country may access Montenegro's national system. Most other foreign residents use private healthcare, which is both affordable and widely available.

Can residents eventually become Montenegrin citizens?

Yes, though it requires patience and the right type of residency. After five years of temporary residence (through routes other than property ownership) and five years of permanent residence — ten years in total — you may apply for citizenship.

Dual citizenship is not permitted under this route, though Montenegro does allow it in limited circumstances such as citizenship by descent. "That's a long commitment, and the compliance requirements make it challenging. You're essentially maintaining qualifying status for a decade."

How does residency interact with taxation?

"This is one of the most misunderstood areas." Having a residence permit does not automatically make you a tax resident. You become liable for worldwide income tax in Montenegro only if you spend 184 or more days per year in the country, or if Montenegro is considered your "centre of personal and economic interests" and you are not a tax resident elsewhere. Montenegro-sourced income is always taxable, regardless of residency category.

Montenegro's current tax rates are as follows:

Personal income tax (on salary):

• 0% on gross income up to €700
• 9% on income from €700.01 to €1,000
• 15% on income above €1,000

Corporate income tax: Progressive rates broadly from 9% to 15%

Other taxes:

• No wealth tax
• No inheritance tax between direct relatives

Montenegro is listed by the OECD among CRS jurisdictions and appears on OECD CRS-MCAA materials. "Tax residency is never black and white. Always get advice from someone who understands both your home country and Montenegro. Both sides matter, especially with CRS now in effect."

How easy is it for families to relocate?

The biggest challenge is schooling, primarily due to the language barrier. Many families choose international schools or homeschooling initially while children adapt. Options include international schools (primarily in Podgorica and coastal areas), local public schools, and private bilingual schools.

Montenegro permits parent-organised home education, provided the child is enrolled with a school and undergoes the required assessments. However, for expat families hoping to use an external online curriculum in English or another foreign language, the practical position remains unclear. Families should confirm directly with their chosen school whether it will accept enrolment for a home-educated pupil and how assessment would be handled in practice.

Healthcare and general living standards are good, and most private services are reasonably priced. For elderly relatives, co-ownership of property is often the most straightforward way to secure residency, though they would need to meet the applicable value thresholds unless they qualify as family members of an EU/EFTA citizen.

"Family reunification rights are well-established, and Montenegro is genuinely family-friendly in terms of bureaucracy."

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What should buyers and investors do now?

"The most important thing is understanding how the new rules apply to you."

For those already with residency:

• If you obtained property-based residency before 17 January 2026, you can renew without meeting the new €150,000 threshold
• If company-based, ensure your company demonstrates at least €5,000 in annual tax payments‍

‍For new applicants:

• Determine whether EU/EFTA exemptions apply to your nationality
• Budget accordingly — whether €150,000 for property or capacity for €5,000 annual company taxes
• Gather required documents early (criminal records, education certificates, apostilles all take time)
• Consider IT or healthcare routes if you have relevant qualifications and can secure 12-month contracts

For property buyers:

• Always verify the property has proper occupancy permits and clean title
• Request a preliminary tax assessment to confirm the value meets the €150,000 threshold
• Understand that official government guidance states property-based temporary residence does not count toward permanent residence qualification

"Don't assume anything. Each person's situation is different, and the two-tier system means nationality matters significantly."

What's your top advice for anyone applying now?

"Preparation and understanding which rules apply to you — that's critical." Jonathan's specific recommendations:

1. Know your status. Understand whether EU/EFTA exemptions affect you. This changes everything.
2. Gather documents early. Criminal records, education certificates, apostilles — these all take time.
3. Get professional guidance. The rules are complex and implementing regulations are still being finalised. Don't attempt this without expert support.
4. Plan for long-term compliance. If going the company route, build a real business that can demonstrate €5,000 in tax payments through normal operations.
5. Understand the permanent residence limitation. If your goal is eventual citizenship, be aware that official government guidance states property-based residency time does not count toward permanent residence qualification.

"When clients speak to me, I always begin by asking: When you imagine your life here, what does it look like? Once we know that, we can work backwards to find the best route."

About the Contributor

Jonathan Howe is the founder of Montenegro Guides, specialising in relocation, immigration, and long-term settlement support for foreign nationals moving to Montenegro. With extensive experience navigating Montenegro's residency system, Jonathan provides expert guidance on all aspects of establishing legal residence.

About NT Realty

NT Realty is a Montenegro-based real estate agency operating since 2006, specialising in helping international buyers navigate property purchases in the Kotor Bay area. As a member of UANCG (the Association of Real Estate Agencies of Montenegro), NT Realty provides expert guidance on residency-qualifying properties and the complete relocation process.

Important Disclaimer

Amendments to the Law on Foreigners were passed by Parliament on 31 December 2025 and entered into force on 17 January 2026. Implementing regulations are expected within 12 months of the law's entry into force. Some procedural details may change as these regulations are finalised.

This article is based on: the Law on Foreigners amendments (entered into force 17 January 2026); official Government of Montenegro guidance; expert analysis by Jonathan Howe, Montenegro Guides; industry reports from UANCG and the German-Montenegrin Business Club; and current legal summaries.

The information provided is for general guidance only and should not be considered legal advice. Applicants should verify current requirements with qualified legal counsel and the relevant Montenegrin authorities at the time of application.

Peter Flynn moved to Montenegro in 2005 and began working in the country's property market as a private speculator. He established New Territory DOO in 2006 to formalise his operations after the country gained independence. With two decades of experience guiding international buyers through Montenegro's property market and residency processes, he specialises in the Tivat and Bay of Kotor area. Working alongside business partner Maša Flynn, NT Realty (which takes its name from the New Territory holding company) has helped hundreds of buyers from the US, UK, Australia, and beyond navigate Montenegro's evolving legal and regulatory landscape. Peter maintains close working relationships with local lawyers, notaries, and government officials, providing clients with current, practical guidance rooted in on-the-ground experience.