Montenegro became an independent state in 2006, after a successful referendum on secession from the joint state with Serbia. Since then, the country has accelerated political and economic reforms, as part of a broader strategy aimed at integrating the country in international and Euro-Atlantic structures. Socialist - Democratic party (DPS) has ruled the country since the independence, but in the last elections held in 2020 DPS lost the majority in the Parliament. Montenegro is a unitary state and parliamentary democracy, and local governments have limited policy competences. The president has largely ceremonial powers and is directly elected every five years. The key executive figure is the prime minister, who leads the government. The current prime Minister is Zdravko Krivokapic, from the centre - right party For the future of Montenegro. On December 15, 2008 Montenegro presented its candidacy to join the EU, achieving candidate status in 2010. On June 26, 2012 the European Union agreed to open negotiations for Montenegro's accession to the EU following the approval of the European Council. These negotiations are proceeding at an accelerated pace and the Montenegrin claim is that accession could take place in 2025, a date that appears as a guideline in the EU  Strategy for the Western Balkans, presented in February 2018 by the the European Commission. The support received from the EU, NATO and IMF, linked to the good relation that Montenegro has with the former countries of Yugoslavia and the intention of the Government to increase foreing investment are improving the political and economic prospects of Montenegro. 

Montenegro has been severely shocked by the economic crisis triggered by COVID - 19, and the GDP shrunk by -12% in 2020. According to the previsions of IMF, GDP is liekly to increase by 5,5% in 2021. Montenegro has potential for further economic growth and development: the adoption of euro as currency has promoted higher trade and financial stability, hydroelectric industry is strong and the country receives support from EU, NATO and IMF for its stabilization. However, the economy still faces severe structural imbalances: the small size of its market, chronic emigration (38% of its population lives abroad), dependence on tourism, high poverty and bad governance (corruption, weak media) and deficiency on road and electricity networks. 

COVID -19 infections are likely to be reduced in the following months, according to the projections of the IHME.

The political environment is stable and the threat posed by political instability is low. The political environment had been dominated by the Democratic Party of Socialists (DPS) since independence. However, several corruption scandals involving the DPS, including the abuse of state resources, triggered anti-government protests in 2019, followed by a wave of protests against a controversial religion law. Consequently, for the first time since the introduction of the multi-party system in 1990, the DPS lost its majority in the August 2020 parliamentary elections. Three opposition political coalitions, the pro-Serbian For the Future of Montenegro, the centrist Peace is Our Nation and the liberal Black-on-White party, won a slim majority, and agreed to form a technocratic government led by Prime Minister Zdravko Krivokapic. The change in political leadership and peaceful transition of power strengthen Montenegro’s democratic credentials, demonstrating that it has relatively free and fair elections.

While the new government is likely to remain nominally committed to pro-European reforms, keeping Montenegro on the EU accession path, reforms are likely to be slowed down, as the government will focus on seeking closer ties with Serbia. The new government has also pledged to reform the electoral system and intensify the fight against corruption and organised crime.

Since independence in 2006, foreign policy has been centred on integrating the country into Western and international institutions. In particular, this has meant securing NATO and EU membership. Montenegro joined NATO in 2017, and has been negotiating full EU membership with the European Commission since 2012. Consequently, Montenegro has developed good relations with NATO allies and EU member states, and the DPS government largely followed the EU’s lead in foreign policy. However, the government that took power in December 2020 is likely to seek closer ties with its traditional Orthodox Christian allies Serbia and Russia, which represents a significant change in foreign policy orientation. Attempts to reconcile a pro-Western foreign policy with closer ties to Serbia and Russia are likely to be a source of friction in the new government. Even if the government remains committed to EU membership, attempts to increase cooperation with Serbia and Russia are likely to anger Montenegrin nationalists and create friction with EU and NATO members.

Montenegro is considered a Hybrid Regime in the 2020 Democracy Index, developed by The Economist Intelligence Unit (EIU), where the country ranks 84 out of 167 countries scored.

The country ranks 48 at the 2020 Human Development Index developed by the United Nations Development Programme.

Businesses in Montenegro face small but persistent obstacles to their operations, related to poor infrastructure and the weak capacity of state bodies to implement and enforce business regulations. However, as a result of the EU accession process and increased EU assistance, both the quality of infrastructure and the capacity of the administration are likely to continue to improve.

Trade unions have been losing influence since the 1990s and trade union membership is declining across most sectors. While strikes occasionally take place, they usually affect heavy industry and mining, and mostly occur in state-owned or recently privatised companies. Strikes tend to be peaceful and only last a few days. Workers usually strike to demand better pay and working conditions, and are generally happy to negotiate directly with employers.

Reliable access to qualified workers is becoming increasingly difficult. The small size of Montenegro’s population and the increasing rate of emigration of young, well-educated Montenegrins indicate that labour availability is likely to continue to pose an obstacle to businesses. The government in 2015 approved a quota system for importing foreign labour, especially in the summer months (June-September) during the tourist season on the coast, to help companies in the construction and tourism sectors.

The government is generally keen to align its legislation and regulatory framework with EU rules and standards. However, the administrative capacity to implement and enforce these regulations is lacking. As a result, businesses in Montenegro regularly face delays when seeking to obtain necessary permits and licences, and cannot expect that existing regulations will be duly enforced. In particular, the capacity of local governments is low outside the capital Podgorica and the larger towns on the coast. In rural and remote areas, local governments struggle to support domestic and foreign businesses.

Petty corruption among police officers or local officials is declining and does not pose a major threat. However, political corruption continues to adversely affect businesses. Political connections are crucial in winning government contracts and public procurement tenders.

The new government will boost the fight against corruption, but progress will likely be slow. While in the first years of the new government’s term this is likely to moderately improve the institutional environment for businesses, the persistent nature of corruption and the legacy of the DPS will continue posing operational challenges.

Overall, Montenegro ranks 52 out of 190 countries scored at the 2020 Doing Business Index by the World Bank and 67 out of 198 at the 2020 Corruption Perception Index by the Transparency International Organization.

The security environment in Montenegro is generally benign. Montenegro has no open issues with neighbouring states that could escalate into conflict. Relations between different ethnic groups are stable and there is no history of inter-ethnic violence. Montenegro in June 2017 became a member of NATO, which reduces the threat of war and conflict.

Crime rates are lower than in Western Europe. However, organised criminal groups are present and active, especially in the coastal towns of Tivat and Kotor. The police and security forces are generally capable of maintaining security and order. Although criminal groups are known to have links to police officers to help them avoid prosecution, corruption in the police is not systemic and businesses can rely on law enforcement bodies. Petty crime, such as theft and pickpocketing, poses the most common security threat for businesses. Thefts increase during the summer season (June-August) around the tourist resorts on the Adriatic coast, when criminal groups specialised in theft target tourists. However, most such incidents are non-violent.

Opposition and civil society groups stage occasional anti-government protests. The passage of a new law relating to religious rights in December 2019 led to regular, large-scale protests across the country. Although the protests remained largely peaceful, on occasion the police fired tear gas and used stun grenades. The main grievances that drove the protests have been neutralised by the parliamentary elections in August, which saw the ousting of the DPS, which had been in power since the 1990s. The new government will adopt amendments to the Law on Freedom of Religion and abolish the disputed articles. Protests usually take place in the capital Podgorica, near government institutions, though the 2019-20 collective action took place across the country. Businesses with premises near city centres are more likely to suffer operational disruption as a result of protests.

Overall, Montenegro ranks 69 out of 163 in the 2020 Global Peace Inde

No vaccinations are required to enter the country.

Montenegro ranks 68 out of 195 within the 2019 Global Health Security Index, a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), developed with The Economist Intelligence Unit (EIU).​​​​

The climate is continental in the interior of the country, mountainous along the reliefs, and Mediterranean along the coast. In the center of the country, summers and autumns are hot and dry and winters are cold, even harsh, with frequent snow. Summers in coastal regions are hot and dry while winters are mild and humid. In the summer temperatures are cooler in mountainous regions.

Montenegro is located in an active seismic zone.

Flooding is not rare in winter months during periods of melting snow.

Numerous wildfires have been reported in recent years during the summer.

If you plan to visit Montenegro, stay informed by the Emergency Management Directorate.