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NewsForeign citizens significantly contributed to the increase in Montenegro's income

Foreign citizens significantly contributed to the increase in Montenegro’s income

The Ministry of Finance announced that the growth of private consumption and the achieved results in tourism resulted in a significant increase in the revenue collected by the state based on VAT, which for the period from January to September was higher by EUR 171.6 million, or 34.8%, in compared to nine months of 2021, i.e. EUR 127.7 million, or 23.8%, compared to planned revenues.
In response to Dan’s question about the financial effects of the significant increase in the number of Russians and Ukrainians who have obtained residency in our country, the department said that it is difficult to give a precise, quantified statement on this basis, considering that the system itself does not recognize the specific categories that we stated.
– However, if we bear in mind that overall economic growth is, among other things, conditioned by domestic demand, private consumption and investments, it is clear that the increased presence of foreign citizens is a positive signal for strengthening the budget’s income – the ministry emphasizes.
The Ministry of Internal Affairs recently announced that slightly more than 13,500 Russian citizens have been approved for temporary or permanent residence in Montenegro, and there are almost 11,100 Ukrainians in the country on the basis of temporary protection or approved residence.
Since the beginning of the war in Ukraine, at the end of February, 112,755 citizens of Russia and 50,614 Ukrainians have applied for a stay of up to 90 days in Montenegro.
– From the beginning of the war in Ukraine, on February 24, to October 10 this year, 119,619 citizens of the Russian Federation entered Montenegro, while 103,406 of them were registered at the exit – the Ministry of Interior announced.
The Ministry of Finance emphasizes that we are witnessing that, despite the crisis caused by the war in Ukraine, the Montenegrin economy is recovering strongly compared to pre-pandemic levels and is recording dynamic growth, which in the second quarter of the year amounted to 12.7%, which makes it officially the largest in Europe. As they added, the growth above expectations, along with favorable macroeconomic indicators, is positively evaluated by the relevant international organizations, which have revised their growth forecasts for Montenegro upwards for the current year.
– In addition to the significant increase in imports and recorded inflation in this period, there is no doubt that a significant increase in the number of foreign citizens who obtained residency in Montenegro due to the war in Ukraine, through an increase in private consumption, contributed to higher incomes. Therefore, it is evident that the increased influx of foreign citizens, caused by the war in Ukraine, contributed to positive trends, and, according to the Government’s estimates, it primarily reflected stronger private consumption and positive results in tourism, trade and related activities, since they were mentioned persons transferred their capital to our country and gradually start private businesses and express interest in further investment. Additional benefits can be expected in the following period as well.
As they pointed out, appreciating the great interest and seriousness in the work of newly formed companies, the Government and the Ministry of Finance are creating a series of measures that, within various areas, create conditions for facilitating the civil and labor legal status of non-residents, in order to provide them with optimal conditions for life and work. which would simultaneously create new values, both for their businesses and for the overall economic picture of Montenegro.
– Confirmation that such measures give results is precisely the growing number of foreign citizens who start and successfully develop their business within the Montenegrin business environment. Therefore, the strong influx of non-residents is also effected by a strong increase in newly founded companies, which, according to unofficial data, is more than 40% higher than last year, with a large percentage of companies founded by foreign citizens – the ministry says.
They emphasize that it is good news that companies that are missing on the Montenegrin market are being established.
– The type of activity of newly founded companies, a large number of which belong to the IT sector, is also encouraging, which can potentially influence the restructuring of the Montenegrin economy and a faster transition towards a highly competitive economy and encourage digitization trends in the private sector. Additionally, the financial impact of the influx of non-residents is reflected in increased activity on the real estate market, a strong inflow of foreign direct investments and increased expansion of the banking sector, due to stronger domestic demand. The trends so far in 2022 show that the risks of the impact of the war in Ukraine on Montenegro have been mitigated in the short term, while the prospects for the next period remain extremely uncertain due to the further challenges of the geopolitical situation, which, in combination with domestic factors, can slow down the planned economic growth – they point out from the Ministry of Finance.

By June, over 1,200 companies were established

The Revenue and Customs Administration announced that from February 1 to June 9, the establishment of 1,100 companies whose founders were natural persons from Russia were registered in Montenegro.
– Of these, 229 companies deal with computer programming, 81 companies deal with data processing, hosting applications and providing application services. In third place are consulting activities related to business and other management (65 companies) and consulting activities in the field of information technology (63 companies) – data from the Revenue and Customs Administration of Montenegro show.
In the same period, 104 companies were registered and founded by natural persons from Ukraine, and the most represented activity is computer programming, which is what 13 of these companies are engaged in.
According to these data, for the citizens of both countries affected by the horrors of war, Montenegro leads the entire region of the Western Balkans, local media writes.
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