Dr Petar IvanovicCEO of MIPADr Petar IvanovicCEO of MIPA

Investment Opportunities Investment Opportunities In MontenegroIn Montenegro

Investment Opportunities Investment Opportunities In MontenegroIn Montenegro

Set up in March 2005 MIPA operates under the Prime Minster Office and serves as a platform for marketing foreign direct investment opportunities on behalf of the Government.

The President of MIPA’s board is Prime Minster, while members of the Board are ministers and representatives of private sector.

Basically, MIPA has a triple role:#1 To assist foreign investors in setting up their businesses;#2 To recommend GoM to remove red tapes for doing business;#3 To provide statistics to the GoM about foreign investments;

Role of MIPARole of MIPARole of MIPARole of MIPA

Recent PastRecent Past

1994 – 1997 UN Sanctions;1999 - NATO bombing;2000 - over 20% of total population were

refugees;Montenegro – the only ex YU republic on

which territory there was no war and with the stable government for 16 years;

2006 – Montenegro recover its independency;

Dilemmas We HadDilemmas We Had

How to develop country super-fast?How to stop brain drain and create future for

young people?How to improve environment for business

development?How and how fast to privatize state ownership?How to attract investors?

Our AnswerOur Answer

By increasing economic freedomsOpening country – no visa requirements;Accepting sound money – euro;Reducing taxes;Strengthening competition;Improving the rule of law;Building trust through improvement of the

business environment;Taking responsibility for the future;

What We Achieved?What We Achieved?

Telecommunication – 100% private (3 GSM); Banking – 100% private (12 banks); Capital market – 100% private (35 broker houses); Agriculture – 100% private; Services – 100% private; Oil import and distribution – 100% private (12

importers); Tourism – mostly private; Industry – mostly private;

Montenegro TodayMontenegro Today

1. The highest FDI per capita in Europe;

2. According to Fraser Institute - the highest level of economic freedoms in the region;

3. Largest share of privatized capital in the region;

4. The most dynamic capital market in the region;

5. Budget surplus;

6. The only state in the region which use EURO;

7. The lowest unemployment rate in the region;

8. The lowest inflation rate in the region;

Montenegro TomorrowMontenegro Tomorrow

So, Why Montenegro?So, Why Montenegro?

1. Safe and stable;2. Predictable macroeconomic stability; 3. Ability to remit profit, dividends and interest;4. National Treatment of Foreigners;5. Euro;6. Favorable Tax Climate (CT 9% VAT 17% PIT 15%);7. Easy Business Start Up (1 € + 4 days);8. International Accounting Standards (IAS);9. Location and climate;10. Increasing economic freedom;

Secret Love of Lord ByronSecret Love of Lord Byron

While a picture tells a thousand words, Lord Byron’s words, in the early 19th century, paint a masterpiece picture:

“At the birth of our planet, the most beautiful encounter between land and sea must have happened at the coast of Montenegro. When the pearls of nature were sown, handfuls of them were cast on this soil.”

Why are FDI’s Crucial?Why are FDI’s Crucial?

FDI’s are changing way of thinking;

Speeding up the reform processes;

Changing the structure of the economy;

Contributing to GDP, GDP growth, employment, budget revenues, export/import…

Developing regional cooperation – business language is unique language;

Origin of InvestorsOrigin of Investors

Investors are coming from 63 countries;

Comparing to total number of investors, none of the countries dominates;

Based on the value invested, investors from following countries are leaders:

Norway, Austria,

Russia, Slovenia,

Hungary, Great Britain.

Investments are increasing due to:Investments are increasing due to:

Unique investment opportunities;

The reform of the financial services sector;

The positive experience of existing investors;

The ability to serve customers in Western and Central Europe;

The quality of service MIPA provides.

230

295

240280

145

384

120

505

180

672

200

0

100

200

300

400

500

600

700

2000 2001 2002 2003 2004 2005 2006 2007

FDI in 2000-07 (in million FDI in 2000-07 (in million €€))

Government plan in previous Economic Agenda

Number of Foreign CompaniesNumber of Foreign Companies

1145

1650

3070

3650

0

500

1000

1500

2000

2500

3000

3500

4000

2004 2005 2006 2007

Firms Operating in MontenegroFirms Operating in Montenegro

Infrastructure

ServicesIncludingbanking

Energy

High Tech

Tourism

InvestmentOpportunitiesInvestment

Opportunities

MONTENEGRO

Public tender for purchasing 62,7123%;

Enclosed workshops – 14.000 m2, connected to all energy supplies and equipped with 14 bridge cranes of 2.5 - 40 t lifting capacity;

Outdoor working platforms – 4.600 m2, connected to all energy supplies and equipped with two 25 t portal cranes and three 8-50 t auto-crane;

Adriatic Shipyard Bijela

Marina Development

Ada Bojana

Velika Plaza

Valdanos

Buljarica

Lucice

Jaz

Tivat – Kalardovo

Njivice

MONTENEGRO

Free Trade Zone Port of Bar

Favorable geographical positions;

No customs and tax duties;

Flexible, efficient and profitable conditions for doing

business;

95% of total passenger and freight transport in Serbia and

Montenegro;

Favorable geographical positions;

No customs and tax duties;

Flexible, efficient and profitable conditions for doing

business;

95% of total passenger and freight transport in Serbia and

Montenegro;

Expected tendersExpected tenders

Tobacco Co “Duvanski kombinat”;Health-spa in Herceg Novi;Electric CompanyObod CetinjeWine CompanyPort of BarMontenegro AirlinesRailroads

Expected tendersExpected tenders

Water Supply Systems;Communal Services;Highways;New hydro plants;Ada Bojana;Send Beach in Ulcinj;Valdanos;

Potentials of Montenegro?Potentials of Montenegro?

BUSINESS HUB for region;

Regional financial center;

High-tech & educational center;

Transportation corridors;

ExpectationsExpectations

To attract minimum 5 billion FDI till 2011;And minimum 30 billion till 2030;

FDI per capita in 2007-2011 will be 8,100 € or 4 times more than in the period 2001-2006.

Q - Why You Should Invest in Montenegro?

A - Because you can make profit!

Q – What you should do?

A – Do it now. Waiting will only decrease your future profit!

MONTENEGRO

MIPA Publication

Publication is available on MIPA's web page: www.mipa.cg.yu

Guide for foreigner investors, containing simple and straightforward answers on the most frequently asked questions:

•economic climate in Montenegro

•capital market

•operational costs

•foreign investments

•business registrations, laws, tax,…

Montenegrin Investment Promotion Agency (MIPA)Montenegrin Investment

Promotion Agency (MIPA)

Jovana Tomasevica 2Podgorica 81000, MNE

Phone:(00 382 20) 203-140; 203-141; 202-910

E-mail: ivanovic@cg.yu

Web site: www.mipa.cg.yu

Thank You!