06 Mar 15
Rule of Law Worries US Firms in Montenegro
American businesses operating in Montenegro do not believe the state of the rule of law is improving, although they still see the country as an attractive destination for investment overall, a new survey suggests.
The latest survey of the American Chamber of Commerce in Montenegro, AmCham, released on Wednesday, suggests that a significant number of US companies – 70 per cent – do not believe that the rule of law has improved and more than half see “uneven implementation of the laws” as an issue.
More than two-thirds of AmCham members are dissatisfied with the state of the informal, grey economy in the country and about 60 per cent see the overall situation in the Montenegrin market as “quite bad”.
The suvey was conducted among dozens of members of the chamber – companies with partial or full US ownership structure but also investors from other European countries operating in Montenegro.
A large majority, nearly 80 percent, believe judicial procedures remain slow and unpredictable, seeing this as a serious barrier to business.
About 70 per cent of AmCham’s members criticized the rise in VAT of 2 per cent, which was intoduced last year, saying the tax is “a significant obstacle for small and medium-sized enterprises.
“Many investors are still facing problems related to unresolved property rights and restitution, ineffectiveness and inefficiency of procedures as well as delays in the adoption of local zoning plans,” the survey said.
However, the US companies still see Montenegro as an attractive investment destination because significant natural resourcees are located in a relatively small area, because the currency is the euro and because the corporate tax rate is low.
The AmCham association is a representation body for US businesses in the country, which aims to attract more US and other foreign investment. It also promotes US commercial interests with support from the US embassy in Podgorica.
Source: Balkan Insight (Montenegro)