Category: Montenegro

The word “fiduciary” originates from the Latin language and in translation means trust or pledge and dates back to Roman law and denotes a contract that is created when one party, the fiduciary (fiducians), hands over to another party a fiduciary (fiduciarius) something for ownership, and the fiduciary undertakes to return the same thing to the ownership of the fiduciary after the expiration of a certain term or the fulfillment of a certain condition. The fiduciary transfer of ownership rights i.e. fiduciary (“Fiduciary”) was introduced as a legal institute into the Montenegrin legal system through the Law on Fiduciary Transfer of Rights (“Official Gazette RCG No 23/96”) and after that, it continued to live under the Law on Property Relations (“Official Gazette CG No 19/09”).

The fiduciary represents a conditionally acquired ownership on either movable or immovable property for securing the collection of a claim (existing, future, and conditional) and authorizes the fiduciary/ creditor to collect his receivables before any other creditor, regardless of a person being in possession of the property.

The specificity of the fiduciary, i.e. the Agreement on the fiduciary transfer of ownership rights, is that it must be concluded in writing, such an agreement, if it is related to immovable property, such agreement must be notarized by the notary public, then registered with the real estate cadastre and mandatory notation of fiduciary transfer of property.

This Agreement represents an enforceable document in the sense of the provisions of the Law on Enforcement and Security, so the fiduciary is authorized to initiate the enforcement procedure on the basis of the enforceable document upon the maturity of the obligation.

The main characteristic is that the creditor/ the beneficiary becomes a formal legal owner of the encumbered property, but with limited powers, while the fiduciary debtor is considered an economic owner of the encumbered property, keeps the right of holding, using and collecting on the encumbered property.

Furthermore, the provision of the contract according to which the parties agree that the lender acquires ownership rights to the real estate if the borrower does not return the loaned funds within the term established by the contract, the so-called lex commisoria, is void, but the rest of the contract remains in force.

In practice, the fiduciary has shown more shortcomings or stumbling blocks than benefits. The disadvantages are primarily related to the increased costs of its realization when the debtor falls into arrears with the fulfillment of his obligation. Problems in practice arise from the moment of submission of the application for the definitive registration of property rights based on the contract on fiduciary transfer of property rights with the procedure for erasing the record of the contract because it takes too long (obstruction of the fiduciary debtor in terms of receiving letters, decisions, the exercise of the right to a legal remedy that has a suspensive effect of the decision and, finally, taking too long to deal with reported complaints).

Entry into possession is rarely voluntary, and the creditor is obliged to initiate a separate lawsuit for eviction and possession of the immovable property, after the legally binding conclusion of the lawsuit, enforcement proceedings are initiated for the purpose of judicial possession. In addition, after the definitive registration in the real estate register, the acquirer is obliged to pay the competent tax authority a tax amount of 3% (or more depending on the amount according to the progressive rate), on behalf of the turnover of the real estate, which additionally increases the costs of realizing the collection of claims.

One of the rare benefits is in the case of initiation of bankruptcy proceedings against legal entities that appear as (fiduciary) debtors, as the property of these companies has been formally transferred to the creditor (e.g. most often the Bank), this property does not enter the bankruptcy estate of the debtor and the Bank is not forced to wait for the collection of its claim from the bankruptcy estate, but can immediately proceed to the sale of such property, as a separate creditor.

It is clear that the tempo is fast in all segments of life, especially in the business environment, practice has so far shown that fiduciary as a legal institute, in relation to a mortgage, for instance, is a rather complicated, long and demanding procedure, especially in the part that refers to the settlement of the secured claim, and that the costs from the beginning to the final realization and cancellation are extremely high.

Most, if not all, business entities resort to a mortgage as a faster, clearer, and more economical means of security, so the question really arises whether we still need a fiduciary in our legal life.

By Alma Karadjuzovic Djindjinovic, Partner, and Dajana Drljevic, Associate, JPM & Partners Montenegro

Montenegro has enacted two new laws that significantly reform its investment fund sector.

The Law on Open-Ended Investment Funds with Public Offering and the Law on Alternative Investment Funds came into force on 19 March and 20 March 20 2025, respectively. These laws introduce a comprehensive regulatory framework for the establishment and operation of Open-Ended Investment Funds with Public Offering (UCITS funds), Alternative Investment Funds (AIFs), and their managing companies. 

Key Highlights:

• UCITS funds: These funds pool capital raised through public offerings, investing in transferable securities and other liquid financial assets while adhering to risk diversification principles.
• AIFs: Unlike open-ended funds, AIFs generally collect investor capital for investments based on a defined strategy, sometimes with less focus on joint investments in transferable securities.
• Regulatory Oversight: The establishment and operation of both types of investment funds, as well as their managing companies, require approval from the Montenegrin Securities Commission. 

Strengthening Governance and Transparency – A Step Forward for Montenegro’s Financial Sector

The new laws aim to align Montenegro’s investment fund regulations with EU standards, offering greater legal certainty and fostering investor confidence. These legislative updates also distinguish the governance of investment funds from the existing Law on Investment Funds.

Generally, these new regulations should mark a significant milestone in modernising Montenegro’s investment fund sector. By aligning its regulatory framework with international standards, Montenegro enhances investor protection, improves market efficiency, and strengthens its position as an attractive investment destination. 

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.

By Marko Culafic, Partner, Karanovic & Partners

Harrisons has advised the EBRD on two loan facilities provided to Crnogorska Komercijalna Banka Podgorica aimed at enhancing access to affordable green finance for businesses and homeowners.

According to Harrisons, under the SME Go Green Program, a EUR 7 million loan will be on-lent to small and medium-sized enterprises for green investments in energy efficiency, resource efficiency, and renewable energy – helping local businesses meet EU standards and boost their competitiveness. Additionally, a EUR 5 million facility under the Western Balkans GEFF III – Repower Residential Program will support homeowners in investing in high-performance green technologies such as thermal insulation, energy-efficient heating and windows, heat pumps, and solar panels. Homeowners and housing associations will also benefit from cashback incentive grants of up to 20% of their loan value upon successful installation. Both facilities are supported by grant incentives from the European Union and the Japanese government.

The Harrisons team included Principal Mark Harrison, Consultant Ines Matijevic-Papulin, and Senior Associate Mina Zeljkovic.

The Law on Amendments to the Law on Prevention of Money Laundering and Terrorist Financing (“Law“) has been adopted, and a decree on its promulgation has been issued. The Law was published in the “Official Gazette of Montenegro” on 12^th March 2025, and it enters into force on 20^th March 2025.

Below, we have summarized some of the most important amendments introduced by the Law.

• Regulation of business operations related to crypto assets

Although the regulation of crypto assets should have been addressed through a separate law, the legislator has introduced a dedicated chapter on this matter through amendments to the existing Law on Prevention of Money Laundering and Terrorist Financing. The new provisions include an obligation for providers of services related to crypto assets in Montenegro to register before commencing operations. This means that any legal entity, business company, entrepreneur, or natural person with a registered office, residence, or approved permanent residence in Montenegro wishing to provide services related to crypto assets must be established in the Register before starting business operations. The same applies to service providers from EU member states not on the list of high-risk third countries, provided they hold the appropriate authorization or registration in their home country.

Article 145c of the Law stipulates that the supervisory authority must establish the Register within nine months from the date of entry into force of the amendments. A significant issue is the lack of transitional provisions regarding the provision of services related to crypto assets. Due to this omission, the legality of business operations related to crypto assets remains uncertain from the date the amendments enter into force until the establishment of the Register of Crypto Asset Service Providers (“Register”), which is expected to be created within nine months from the Law’s entry into force.

• New obligations for gambling operators

Article 18, paragraph 1, point 7 of the current Law on Prevention of Money Laundering and Terrorist Financing is amended so that gambling operators will be required to conduct customer due diligence and transaction monitoring when processing deposits of EUR 20,00 or more, whether as a single transaction or multiple linked transactions, instead of the previous minimum amount of EUR 2.000,00.

• Enhancement of the client identification system

The Law introduces the possibility for obligatories that have conducted video-electronic client identification to perform subsequent identity verification using reliable algorithms. This verification process is based on comparing the client’s video-recorded image with the photograph from their electronic identification document, obtained during the initial identification process. This verification is only possible if the electronic identification document has not expired at the time of verification. Additionally, obligatories may cross-check data through the Central Population Register, records of issued identification documents, and international databases of stolen, lost, and invalid documents. This measure enhances the efficiency and security of the identification process while ensuring a high level of data protection for clients.

• More precise definition of beneficial owners

The amendments to the Law provide a more precise definition of beneficial owners. A new criterion has been added to determine who qualifies as a beneficial owner – besides ownership interest and decisive influence, a beneficial owner is now also considered to be a person who controls a legal entity or business company “by other means.” This amendment establishes clearer rules on what constitutes “other means of control,” which may include a majority of voting rights, the right to appoint or dismiss most board members, veto rights, decision-making over profit distribution, or changes in assets. Additionally, control may stem from formal or informal agreements with owners, provisions in statutes, partnership agreements, and even family ties or arrangements with appointed representatives.

Furthermore, the Law explicitly defines who qualifies as a beneficial owner in foundations similar to trusts. These include the founder, members of the management and supervisory board, beneficiaries or categories of beneficiaries of the foundation, and people who directly or indirectly control it.

• Increase in financial penalties and amendments to misdemeanor provisions

Finally, the Law increases the minimum range of financial penalties for legal entities failing to comply with its provisions from EUR 3.000,00 to EUR 5.000,00. A new provision has been introduced in Article 137, stipulating stricter fines ranging from EUR 10.000,00 to EUR 40.000,00 if the violation is committed by credit institutions and branches of foreign credit institutions, entities engaged in receivables purchasing, financial leasing, safe deposit box rental, factoring, issuance of guarantees and other sureties, credit granting and brokerage, foreign exchange operations, payment institutions, and electronic money institutions.

Additionally, the amendments to the Law expand misdemeanor provisions to include cases where an obliged entity fails to submit data for maintaining the Register of Beneficial Owners within eight days of registration in the Central Register of Business Entities or within eight days of any change to the beneficial ownership information, in accordance with Article 43, paragraph 3 of the Law. In such cases, a fine ranging from EUR 500,00 to EUR 2.000,00 may be imposed.

The amendments to the Law introduce stricter regulations, increased transparency, and alignment with international standards. More precise definitions of beneficial owners, regulation of crypto assets, and enhancements to client identification are key steps toward more effective financial flow control. Increased fines and stricter misdemeanor provisions further strengthen legal security and accountability for obliged entities. However, the lack of transitional provisions regarding the provision of services related to crypto assets until the Register is established, as well as the fact that crypto asset regulation should have been addressed through a separate law, remain open issues.

By Lana Vukmirovic Misic, Senior Partner, and Mina Coguric, Associate, JPM & Partners

Jovovic, Mugosa & Vukovic Attorney at Law Bojana Nikcevic discusses the impact of judicial delays, activities of the Bar Association, and the legislative changes that are set to reshape Montenegro’s competition law, business regulations, and corporate compliance in the country.

“Unfortunately, political and social circumstances continue to have a significant influence on the legal sector,” Nikcevic begins. “While there have been some improvements in the judiciary – most notably with the long-awaited appointment of new heads of courts and prosecutor’s office – Montenegro still faces a severe shortage of judges which has led to considerable delays in court proceedings, with many cases being prolonged well beyond reasonable timeframes. In fact, some cases that should have been prioritized have been ongoing for 10 to 15 years, placing a significant strain on the court system and those seeking legal resolutions,” Nikcevic elaborates.

Additionally, Nikcevic reports that “one of [Montenegro’s Bar Association’s] key priorities at the moment is negotiating with the Ministry of Justice to amend the attorneys’ fee schedule, which was last updated in 2017. Given rising inflation and the increased cost of living, legal professionals have seen their costs rise while fee structures have remained stagnant.” According to her, the Bar Association is also working on amending other regulations governing the legal profession to further strengthen the position of lawyers. 

Nikcevic also reports on several important amendments to key laws in the past two months with relevant ministries launching public consultations on multiple fronts. “One of the most notable developments is the proposed amendment to the Law on the Protection of Competition. If adopted, the amendments would significantly expand the powers of the national competition agency,” she says. Currently, if the agency identifies a violation, it must initiate proceedings before the misdemeanor court. “Under the proposed changes, the agency itself would have the authority to impose administrative fines directly, without requiring judicial intervention. This would mark a significant shift in competition law enforcement and could lead to increased activity for legal professionals specializing in antitrust matters.” 

Another major development, according to Nikcevic, is the introduction of a new Law on Business Companies, which will replace the existing framework from 2020. “The previous law created multiple challenges for businesses, and the government has decided to enact a completely new law rather than attempt piecemeal amendments. The adoption of this law will be followed by complementary legislation on company registration, which is expected to significantly streamline the process of establishing businesses in Montenegro,” she explains. “These reforms should improve market conditions and generate increased legal work, particularly in corporate structuring and regulatory compliance.”

“While we are not seeing drastic shifts in investment or major structural changes in the economy, businesses are facing challenges in navigating regulatory and administrative processes,” Nikcevic argues. “The combination of judicial delays, pending legislative reforms, and broader economic uncertainty means that companies are taking a cautious approach,” she explains. At the same time, these very challenges are generating legal work. “As businesses look for ways to adapt to new regulations – particularly in corporate law, competition, and compliance – lawyers are playing an increasingly important role in guiding them through these changes. We expect that, as new laws take effect, inquiries and legal workload in these areas will continue to rise,” Nikcevic concludes.

Karanovic & Partners has advised the Green for Growth Fund on a EUR 3 million loan to Lovcen Bank Podgorica.

The Green for Growth Fund is a specialized impact investment fund to mitigate climate change and promote sustainable economic growth.

The Karanovic & Partners team included Partners Katarina Guduric and Maja Jovancevic Setka and Senior Associate Sandra Perisic.

The Montenegrin Agency for the Protection of Competition (“Agency“) has released draft version of the Law on Procedures for Compensation of Damages Resulting from Competition Violations (“Damage Law“) and draft of the amendments and supplements to the Law on the Protection of Competition (“Competition Law“), whose aim is to align Montenegrin legislation with legislation of the European Union as part of Chapter 8 in the negotiations for Montenegro’s accession to the European Union.

Competition Law

One of the most significant changes introduced by the proposed draft of amendments and supplements to the Competition Law is the removal of provisions regulating individual exemptions. As a result, market participants will no longer need to submit a request for individual exemption of their agreements and receive approval for such exemptions from the Agency. Instead, market participants shall self-assess all agreements executed and determine whether they comply with the Competition Law. In case the Agency initiates proceedings in order to determine whether a restrictive agreement has been concluded, the market participants shall be obliged to prove that their agreement meets all of the conditions for their exemption from prohibition prescribed by the Competition Law.

The proposed draft also introduces a significant change concerning the deadline for submission of concentration notifications. Going forward, these notifications will no longer need to be submitted within 15 days of executing the agreement, announcing a public offer, or acquiring control.

The proposed draft of amendments and supplements to the Competition Law also seeks to strengthen the powers and competencies of the Agency, as well as its functional and financial independence.

Namely, it prescribes that the Agency may impose fines as administrative measures – fines in the amount of up to 10% of the total annual turnover in the financial year preceding the year when the violation of the Competition Law has occurred. The minimum fine has been reduced from 1% and can now be set at an amount below 1%. This amendment harmonized Montenegrin legislation with EU legislation, as well as, among others, Serbian legislation, which both prescribe penalties of up to 10% of annual turnover in the financial year preceding the year when the violation occurred. The statute of limitations for imposing penalties is five years.

Furthermore, the proposed draft also prescribes the conditions and methods for reducing or exempting participants from fines for violating competition rules.

Additionally, it prescribes the Agency’s authority to initiate procedures and make decisions on its initiative through its constant supervision of the market, thereby strengthening its regulatory role.

Submission of requests to initiate misdemeanour proceedings before the competent Misdemeanour Court is limited only to violations of the law governing state aid, while the Agency’s obligation to monitor the implementation and effects of granted state aid and to collect data on the use and effects of granted state aid is foreseen.

Finally, the cooperation of the Agency with other state bodies is regulated in more detail. It is stipulated that the Agency may provide the data it possesses to other state bodies and holders of public authority, as well as to the European Commission and competent bodies of foreign countries. At the same time, it is prescribed the duty of state and local administration bodies, holders of public authority and other persons and organizations to provide the Agency with available information necessary for decision-making.

Damage Law

The aim of the draft of the Damage Law is to harmonize Montenegrin legislation with Directive 2014/104/EU of the European Parliament and the Council on certain rules regulating procedures for compensation of damages for the violation of competition law provisions on the market of member states and the European Union.

Firstly, the draft establishes the right to full compensation for damages and specifies that the injured party who has suffered damage caused by the violation of competition on the market can demand and receive full compensation for damages and that the material situation of the injured party is brought to the state in which it would have been if there had been no violation of competition on the market.

Furthermore, the draft prescribes the legal effect of the Agency’s decisions, specifically, it specifies that the violation of competition on the market, determined by a final decision of the Agency or the Administrative Court, shall be considered irrefutable evidence in the proceedings for compensation of damages initiated before the competent court, hence the burden of proof will not be on the injured party. On the other hand, a final decision of the national competition authority of an EU member state may be presented before the competent court as prima facie evidence that there has been a violation of competition on the market and may be assessed together with other evidence submitted by the parties.

In terms of liability, when several entities are involved in the infringement of competition, their joint liability is foreseen. Additionally, special rules are prescribed regarding liability when it comes to small and medium-sized enterprises – rules on limiting their liability to their direct and indirect customers.

Conclusion

The proposed changes to Montenegrin competition legislation represent a significant step toward aligning with the EU standards. We will continue to closely monitor the progress of adopting these amendments and provide timely updates on their implementation.

By Luka Hajdukovic and Katarina Rosic, Senior Associates, JPM Partners

At the session held on December 19, 2024, the Government of Montenegro adopted the Bill of Law on Construction of Buildings and the Bill of Law on Spatial Planning. It was proposed that these laws should be adopted through an expedited procedure.

So far, these areas have been comprehensively regulated through the Law on Spatial Planning and Construction of Buildings. In the event of the adoption of the proposed changes, instead of the current single law, these areas will be separated into two new laws, while the issue of legalization is planned to be addressed through a separate third law.

The Bill of Law on Construction of Buildings is aligned with Directive 2006/123/EC on services in the internal market, Directive 2005/36/EC on the recognition of professional qualifications, Directive 2013/55/EU amending Directive 2005/36/EC on the recognition of professional qualifications, and Annex I of Regulation No. 305/2011 of the European Parliament and the Council on laying down harmonized conditions for the marketing of construction products and repealing Directive 89/106/EEC.

One of the significant changes introduced by the Bill of Law on Construction of Buildings is the requirement to obtain a construction permit and the decentralization of responsibilities regarding the issuance of construction permits between the Ministry and local self-government units.

In the regular procedure, a construction permit will be issued to the investor within 30 days from the date of submitting the application, which must include: the main project; a report on the positive review of the main project; approval from the chief country or city architect; proof of liability insurance for the designer and reviewer of the main project. All other required documentation will be obtained ex officio by the competent authority.

The obligations of the investor before the commencement of construction, the deadline for completing the construction of the building, and the responsibilities in case of a change of investor are also stipulated. The investor is required to complete the construction of the building within five years from the date the construction permit is issued. If construction is not completed within the specified timeframe, the investor must pay an annual fee and continuously maintain the construction site until an occupancy permit is obtained.

According to the Bill of Law on Construction of Buildings, the local self-government authority will issue construction permits for buildings, except in cases involving country buildings of general interest; buildings with a gross construction area of 3,000 m² or more; and hotels or tourist settlements with four or five stars, as well as tourist resorts.

Exemption from the obligation to obtain a construction permit will apply to temporary and auxiliary structures.

A new provision introduces the requirement for a technical inspection to issue an occupancy permit for all buildings, except for the category of single-family residential houses.

The Bill of Law anticipates that the construction permit system will achieve a higher level of safety and security for buildings, as well as increase legal certainty for investors. The Bill of Law also includes new activities in the construction process, prescribes greater responsibility for individuals engaged in construction activities, and introduces enhanced inspection oversight through construction inspectors.

The Bill of Law provides revised conditions for licensing companies engaged in the preparation of technical documentation, including design, review of technical documentation, professional supervision, technical inspections, and designer supervision, as well as other licenses related to activities prescribed by the Bill of Law.

The Bill of Law on Construction of Buildings envisions the establishment of a separate Chamber of Architects, as well as the formation of two chambers: the Engineering Chamber of Montenegro and the Chamber of Architects and Planners of Montenegro, comprising architects, urban planners (from both engineering and non-engineering disciplines), and spatial planners.

The Bill of Law on Spatial Planning defines a new policy in this area, with a primary focus on the decentralization of planning tasks and the allocation of responsibilities between the country and local self-governments for adopting planning documents, in accordance with European regulations and practices. This approach partially restores the authority of local self-governments in the field of spatial planning and development.

The Bill of Law designates and separates planning documents into country-level planning documents and local-level planning documents. These documents are defined in a manner that allows for comprehensive planning assessment and definition of various spaces at both local and country levels, considering their environmental characteristics, significance, and coverage area. Additionally, the Bill of Law redefines instruments for implementing planning documents and addresses construction land. It introduces and defines the concept of urban land consolidation, a process that merges existing cadastral parcels within the consolidation area into a single unit and reorganizes them into urban plots in accordance with the planning document. This process will be conducted by the Urban Land Consolidation Commission.

The Bill of Law also envisions the development of a spatial management program, which will outline the preparation of new planning documents, amendments and additions to existing ones, as well as measures significant for the creation of these documents.

The Bill of Law stipulates that the revision of a country-level planning document will be carried out by the Revision Commission, while the revision of a local-level planning document will be conducted by the business entity responsible for drafting the country and local planning documents.

Of particular importance is the Spatial Plan of Montenegro, as proposed in the Bill of Law. This plan serves as a strategic document and the general basis for the organization and development of Montenegro’s territory. It is adopted for a 20-year period and defines national goals and measures for spatial development in line with Montenegro’s economic, social, environmental, and cultural-historical development.

Also of significance is the development of a national architectural development strategy, adopted by the Government of Montenegro. This strategy aims to promote architecture as part of the national culture and identity. Additionally, it establishes conditions for improving the quality of the built environment.

Additionally, the Bill of Law proposes the establishment of the Chamber of Architects and Planners of Montenegro, as well as inspection oversight in this field through an urban planning inspector.

The Bill of Law on Spatial Planning is aligned with Directive 2014/89/EU which is establishing a framework for maritime spatial planning, Directive 2005/36/EC on the recognition of professional qualifications, Directive 2013/55/EU amending Directive 2005/36/EC on the recognition of professional qualifications, and the Protocol on Integrated Coastal Zone Management in the Mediterranean (Madrid, 2008), which was ratified through the adoption of the Law on Ratification of the Protocol on Integrated Coastal Zone Management in the Mediterranean in 2011.

Finally, it is important to highlight the instability of Montenegrin legislation in this area, given the fact that numerous changes have been introduced over the past decade, with several laws being enacted during this period, often with significant differences. Before 2008, Montenegro had a model where this area was regulated by multiple laws, such as the Law on Spatial Planning and Land Development, the Law on Construction of Buildings, and the Law on Construction Land. For the first time in 2008, a unified law was introduced to comprehensively regulate this field – the Law on Spatial Planning and Construction of Buildings – which remained in force until 2017. During its applicability, this law underwent as many as eight amendments.

A similar fate befell the Law on Spatial Planning and Construction of Buildings, adopted in 2017, which has been amended six times to date. Now, without valid justification, there is a return to the pre-2008 model, involving multiple laws regulating this area. This approach reflects a lack of continuity in the legislative framework and creates additional legal uncertainty. Unfortunately, the General Regulation Plan of Montenegro, which was supposed to be adopted more than four years ago, has still not been implemented, further worsening the situation in this field.

Instead of constant changes to the legal framework, it is crucial to focus on the effective implementation of existing regulations. The issue often lies not with the laws themselves but with their enforcement and oversight. Even less-than-perfect legal solutions can yield results if consistently applied. Conversely, frequent legal amendments destabilize the system, discourage investors, and hinder long-term planning, which is not in the interest of a country striving to attract foreign investments and achieve sustainable development.

By Lana Vukmirovic Misic, Senior Partner and Dajana Drljevic and Bojan Rolovic, Associates, JPM & Partners

Moravcevic, Vojnovic and Partners in cooperation with Schoenherr has advised Agri Europe Cyprus on its acquisition of a 74.94% stake in Hipotekarna Banka Podgorica. Komnenic & Partners advised a group of corporate, family, and individual sellers.

The transaction remains contingent on regulatory approval.

Agri Europe Cyprus is a financial holding company in Southeast Europe with subsidiaries including AIK Banka, AIK Leasing, Eurobank Direktna in Serbia, and Gorenjska Banka and GB Leasing in Slovenia.

According to Schoenherr, the transaction involves the purchase of 7,674,285 shares at a price of EUR 9.77 per share. Post-closing, Agri Europe Cyprus plans to launch a mandatory takeover offer in accordance with Montenegrin capital markets regulations. 

According to Komnenic & Partners, upon the completion of the transaction, “Agri Europe Cyprus will hold approximately 74.94% of Hipotekarna Banka’s share capital, with the remaining significant stake retained by Miljan Todorovic and his corporate affiliates.”

Earlier in 2024, Schoenherr advised on takeover bids for Addiko Bank (as reported by CEE Legal Matters on May 28, 2024).

The Schoenherr team included Partners Matija Vojnovic, Vojimir Kurtic, and Zoran Soljaga, Of Counsel Dusan Obradovic, Attorney at Law Petar Vucinic, and Associates Luka Milosevic, Stefan Dobras, and Zeljko Loci. 

The Komnenic & Partners team included Managing Partner Milos Komnenic, Attorney at Law Desanka Kotlaja, and Associates Jovana Petrovic and Bozo Knezevic.

Montenegro is seeing major changes with the election of a new Supreme Court President, the creation of a state-owned development bank, and tax reforms under the Europe Now 2 program, aligning the country with EU standards, according to Vujacic Law Office Partner Jelena Vujisic.

“Montenegro recently elected a new Supreme Court President after four years and eight unsuccessful attempts,” Vujisic notes. “The Judicial Council selected Valentina Pavlicic, a former representative at the European Court of Human Rights, to lead the institution. This is a significant development for Montenegro’s judiciary, as the courts have faced a challenging situation over the past five years. The appointment brings hope for much-needed improvements in judicial operations.”

Another notable development, Vujisic emphasizes, is the anticipated formation of a state-owned development bank. “This initiative marks a first for Montenegro, with the parliament recently adopting a set of laws to support its creation,” she notes. “The goal of the development bank is to provide financial assistance to Montenegrin companies and stimulate economic growth. The bank will be built upon the existing Investment and Development Fund, taking over its functions and responsibilities. The establishment is expected to be completed by the end of the year.”

Vujisic also highlights that in October, the second phase of Montenegro’s tax reform program, Europe Now 2, was introduced. “This reform includes two major changes aimed at reducing tax burdens and addressing wage policies,” she explains. “For the first time, minimum salaries have been differentiated by education level: EUR 600 net for employees with a high school diploma and EUR 800 net for those with a university degree.” Previously, according to Vujisic, Montenegro only had a general minimum salary standard. Additionally, she says, “employer costs have been reduced, with employers’ pension contributions decreasing from 15% to 10%, and employees’ contributions dropping from 5.5% to 0%. While employees have welcomed these measures, small businesses have expressed concerns that higher minimum wages could negatively impact their operations.”

Montenegro has also introduced new legislation to align with EU standards, Vujisic continues. “A new Electronic Communications Act has been passed to ensure compliance with EU regulations. Additionally, the Agency for the Protection of Competition has taken significant steps, including issuing decisions regarding restrictive practices by telecommunications companies.” She explains that “such decisions are rare in Montenegro and reflect a more proactive approach as the country seeks to improve its readiness for EU membership within the next three years. While these decisions have been appealed, they demonstrate a shift toward stricter enforcement of competition laws.”

“These developments highlight Montenegro’s efforts to strengthen its institutions, support its economy, and align with European standards as it continues its EU integration journey,” Vujisic concludes.