Stricter conditions for foreigners starting next year

The right to obtain a work permit and temporary residence is granted to a foreigner who owns at least half of a real estate property (1/2 in the real estate registry) whose value exceeds 150,000 euros (tax base amount) according to the decision of the municipal tax authority, or who is the owner and co-owner of more than 51 percent of shares in a company that paid at least 5,000 euros in taxes and contributions in the previous year, based on a certificate from the state Tax Administration, which refers to the obligations paid to this state authority.

This was stated to “Vijesti” by the Ministry of Interior in response to questions regarding the implementation of the new Law on Foreigners, which has been in force since the beginning of this year.

Most of the stricter conditions for obtaining permits will begin to be applied from next year, until which the deadline for the Ministry of Interior to draft bylaws has been extended, that is, from the tax return for 2026, while foreigners who obtained residence permits based on real estate ownership under the old law will not have to prove the value of the property when extending it.

In recent days, several associations of foreigners and business associations have stated that certain provisions of the law are unclear and need to be specified by bylaws, which they also emphasized at a round table at the Chamber of Commerce regarding the implementation of the new provisions of the law. Some of these mentioned ambiguities relate to how the value of real estate is assessed, whether the owner must be a natural person applying for the permit or whether it can be a legal entity owned by him, which taxes the minimum amount of 5,000 euros refers to (state, local, ...), who sums them up, and how the fulfillment of that amount is determined... They also requested that bylaws be adopted as soon as possible, reports Vijesti.

The Ministry of Interior told “Vijesti” that the Law on Foreigners prescribes that bylaws for the implementation of this law will be adopted, or harmonized with this law, within 12 months from the date of entry into force of this law.

At the round table held at the Chamber of Commerce two weeks ago, the representative of the Ministry of Interior Dragan Dašić said that previously there was no condition of a determined value of real estate, and that in exercising rights based on company operations more than a thousand cases of inactive companies were discovered, that is, that they served only for obtaining residence permits and not for active business, which is why they decided to introduce a minimum paid amount.

In response to the question from “Vijesti” to clarify how a temporary residence permit is obtained through ownership of real estate and which procedures the owner must fulfill and initiate, the Ministry of Interior stated that the owner of at least 1/2 of the property must be a natural person applying for the residence permit.

“A temporary residence permit for the purpose of using and disposing of the right to real estate owned by a foreigner in Montenegro may be issued to a foreigner who meets the conditions from Article 43 of this law, and as proof of the justification of the request submits a real estate list or another proof in accordance with the law governing the real estate cadastre, which confirms ownership of that real estate, as well as proof of the value of the real estate issued by the local government authority responsible for tax collection, in accordance with the law. This means that the temporary residence permit is issued to a natural person - a foreigner who owns real estate in Montenegro. The permit from paragraph 1 of this Article may be issued to a foreigner who is a co-owner of at least 1/2 of the real estate. Real estate, in the sense of paragraph 1 of this Article, includes family houses, holiday homes, villas, apartments, hospitality facilities, mixed residential-commercial buildings and business premises. Proof of the value of the real estate is a decision on the determination of real estate transfer tax issued by the local government authority responsible for tax collection, whose tax base amount is not less than 150,000 euros”, stated the Ministry of Interior.

They also pointed out that the obligation to submit proof of the value of real estate does not apply to citizens of European Union member states or members of their families regardless of whether those members are citizens of EU member states, as well as to citizens of the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway and the Swiss Confederation.

Dašić stated at the round table that foreigners who have already acquired the right of residence based on ownership of real estate under the old law continue to extend permits under previous rules, without additional proof of the value of that real estate.

In response to the question of which taxes the condition for obtaining residence based on company operations refers to, the Ministry of Interior stated that the certificate is issued by the Tax Administration.

“A temporary residence and work permit for entrepreneurs and executive directors in companies in which they are the sole owners or owners of more than 51% of capital may be extended as long as they meet the conditions from Article 43 of this law and provide proof of fulfilled obligations based on taxes and contributions in a minimum amount of 5,000 euros on an annual level. Proof of fulfilled obligations based on taxes and contributions will be obtained by the foreigner from the Tax Administration”, stated the Ministry of Interior, reports Vijesti.

Dašić said at the round table that abuses were identified in exercising rights on this basis, which is why they decided to introduce additional control mechanisms, including the obligation to prove settled tax obligations when extending the permit, whose full application will be implemented from next year.

It is not prescribed how many family members can be brought under one real estate and company.

In July last year, when the amendments to the Law on Foreigners were being prepared, 95 thousand foreigners lived in Montenegro, which is about 15 percent of the total population. Of that number, 30 thousand had permanent residence permits, mostly persons from the territory of the former Yugoslavia, and 65 thousand had temporary residence permits.

The Ministry of Interior then stated that about 16 thousand obtained temporary residence based on ownership of real estate or companies, and that they then brought multiple family members who obtained residence based on family reunification.

In response to the question from “Vijesti” how many family members can now obtain residence based on one real estate, the Ministry of Interior stated that the law does not prescribe the number of family members who can exercise the right to a temporary residence permit for the purpose of family reunification with a foreigner who has been granted a temporary residence permit based on ownership of real estate.

“We note that a temporary residence permit for family reunification is issued to a foreigner who is, among other things, a member of the immediate family of a foreigner who has been granted temporary residence in Montenegro or a partner in a life union of a person of the same sex who has been granted temporary residence in Montenegro. Members of the immediate family are considered: spouses; their minor children born in or out of wedlock; children of one of the spouses and adopted children, up to the age of 18; parents or adoptive parents of minor children”, stated the Ministry of Interior.

Also, the law does not prescribe how many family members of a foreign owner or director of a company established in Montenegro can obtain the right to residence based on the activity of one company.

In response to the question from “Vijesti” whether since the beginning of the implementation of the new law there has been an increase or decrease in the number of residence permits issued to foreigners, data from the Ministry of Interior indicate that the number of foreigners with residence permits based on ownership of real estate has slightly increased from 5,432 as of December 29 to 5,516 as of February 23 when the Ministry made the latest overview.

The total number of foreigners with temporary residence and work permits for entrepreneurs and executive directors in companies on December 29 amounted to 12,211, while on February 23 that number slightly decreased to 11,992.

That is, in two months the total number of foreigners who obtained permits on this basis slightly decreased from 17,643 to 17,508, or by 0.8 percent, reports Vijesti.

Natalija Gerasimova, executive director of “Navusa”, a company that also deals with the registration of foreign companies, stated several times during January that the new law will significantly reduce the number of foreigners living in Montenegro, and that 70 percent of her clients intend to leave Montenegro due to stricter conditions.

Source: mondo.me