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Montenegro

Montenegro. Investment ambient and opportunities of Montenegro Towson, April 12 th 2010. H.E. Miodrag Vlahovic Ambassador of Montenegro to United States. Macroeconomic data. 2009: GDP growth -4%, Deficit 2,6% of GDP-a (90 mil €), Inflation-app. 3%.

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Montenegro

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  1. Montenegro Investment ambient and opportunities of Montenegro Towson, April 12th 2010. H.E. Miodrag Vlahovic Ambassador of Montenegro to United States

  2. Macroeconomic data 2009: GDP growth -4%, Deficit 2,6% of GDP-a (90 mil €), Inflation-app. 3%

  3. Investment Incentives • The Law on Foreign Investment – 2000 (Amendments 2007) • Corporate income tax rate – 9% - lowest in the region • Value added tax – 17% (7% for tourism and IT products; 0% for some basic products) • Personal income tax –12% in 2009 and 9% in 2010 • 42 agreements avoiding double taxation • Average customs duty – 6,6% • Business registration procedure – 4 days

  4. Advantages • Political stability • Macroeconomic stability • Level of achieved Euro-Atlantic integrations (EU and NATO) • Achieved level in negotiations for WTO accession • Efficient and transparent tax system • Reformed banking sector • Simple and fast business establishment • Liberalized foreign trade system (in accordance with WTO) • Educated and qualified labour • Attractive space for living • Preserved environment

  5. Good basis for foreign investors • “Foreign investor” > 25 % of total capital invested • Foreign companies in Montenegro are guaranteed equal legal treatment as local ones • No limit on the amount of capital invested in Montenegro • CEFTA membership • FTA – Free trade agreement with Turkey and Russia

  6. FDI in Montenegro • 2006-2008 FDI per capita 1.000 € • First nine months of 2009 FDI 857,5 €; 15,3% more then in 2008 • Companies and banks – 628,2 million € • Greenfield investments 3,338 billion € in 2008

  7. FDI in Montenegro by countries 01.01. – 30.09.2009. • Italy – 439.608.540,94 € • Russian Federation – 49.070.450,70 € • Austria – 43,172,143.28 € • Great Britain – 41,076,071.75 € • Cyprus – 36,198,692.75 € • Hungary – 30.380.518,01 € • Netherlands – 29,767,341.74 € • Switzerland – 26,383,175.37 €

  8. Montenegro – success story in 2009 • Electric Power Holding Company of Montenegro – EPCG • Closure of transaction on 30th of September 2009 • A2A registered as owner of 43,7% of the shares of EPCG • To increase power of production capacities on 90 MW • Provide profit of 300 million €

  9. Structural and legislative reforms • Labor Law • Decrease of taxes • Concession Law • Property Law • Construction Law • Elimination of business barriers • Improvement of infrastructure (transport, water supply, electricity supply, treatment of waste and waste waters, IT) • …

  10. Major results in privatization process • Telecommunication – 100% private ownership • Banking sector – 100% privatized • Capital market – 100% private ownership • Agriculture – 100% private ownership • Services – 100% private ownership • Oil import and distribution – 100% private ownership • Tourism – mostly private ownership EBRD – small scale privatization 3.7 (evaluation scale 1-4+) – large scale privatization 3.3 (evaluation scale 1-4+)

  11. Planned privatizations (1) • Montenegro Airlines • National flying company • 99,88% share owned by the Government of Montenegro • Five Fokker 100s and two Embraers 195 • In September 2009 adopted model for capital increase of 30%

  12. Planned privatizations (2) • AD “Montecargo” • Company provides services of transportation of cargo • Announced a public tender for sale of the majority stake in AD “Montecargo” in October 2009 • Acquisition of a majority stake – 87,6358% of total capital • Tobacco Company Podgorica • Announcing a public tender for the sale of the majority stake in the Tobacco Company is planned for 2010 • Acquisition of a majority stake • Basic activities – primary processing and preparation of tobacco, cigarette production, whole sale and retail sale • Installed production capacities enable monthly processing of 400 t cigarettes (4800 t/year)

  13. Planned privatizations (3) • HydroPowerPlants on Morača River • HPP Andrijevo • HPP Raslovići • HPP Milunovići • HPP Zlatica ■Total installed capacity 238,4MW • Annual production721 GWh • Time frame for construction of all power plants 6 years • Construction costs540million€

  14. Planned privatizations (4) • Adriatic Shipyard “Bijela” • Announcing a public tender for the sale of the majority stake in the Institute “Adriatic Shipyard “Bijela” is planned for 2010 • Acquisition of a majority stake • Company is the largest ship repairing yard in the southern Adriatic • Reparation of navigable vessels of all types and for all purposes of up to 120.000 deadweight capacity • Capacities for manufacturing of navigable vessels – barges for various purposes with and without own drive, pontoons, working platforms, and other steel constructions • Shipyard field in area of 120.914 m2 • LLC “Maritime Affairs” Bar • Company is in ownership of “Port Bar” • Announced a public tender for sale of 100% stake in LLC “Maritime Affairs” Bar in October 2009 • Concession for the period of 30 years

  15. Planned privatizations (5) • Health Institute “Simo Milošević” • Multidisciplinary health centre • Total area of facilities: 86.206 m2 • Announcing a public tender for sale of the majority stake in the Institute is planned for March 2010 • Acquisition of a majority stake – 56,4806% of total capital • Hotel-touristic company “Ulcinj Riviera” • Service and tourist company • Hotel “Bellevue”.Capacity - 770 beds, consists of three pavilions: Avala, Borik i Cer. Accompanying facilities include: two restaurants, cocktail lounge, terrace, souvenir shop etc. • Hotel “Olympic”.Capacity - 252 beds; rooms: 24 single, 96 twin-bedded,12three-bedded. Accompanying facilities: swimming-pool, terrace, congress hall etc. • Car park “Neptun” around 60.000 m² • Car park “Češki kamp” around 70.000 m² • Announcing a public tender for the sale of the majority stake in the HTP “Ulcinjska rivijera” is planned in 2010 • Acquisition of a majority stake (60,7311% of total capital)

  16. Thank you for your attention! H.E. Miodrag Vlahovic, Ambassador of Montenegro to United States

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