Forming rights of property for property in Montenegro to non-residents of the country

Procedure of purchase of residential and commerce property in Montenegro (if it is in private property) is according to the law “About property and foreign investments” which let foreign legal persons buy and register land, flat or working place but only after showing the confirmation from Ministry of financing about that bought property is necessary for successful work of foreign firm on the Montenegro territory. Another word, having bought property in such way is a basis of registration and working of foreign firm in Montenegro.

Firms which are registered in Montenegro do not need this confirmation. This rule spreads on firms-residents, organizations of which are foreign citizens. So, working Law allows the purchase and registration of all kinds residential and commerce property to legal people (as residents as non-residents, if they obey the conditions above).

As to physical persons non-residents, than Administrative court of Montenegro made a decision that “foreign physical person who is not economic active in Montenegro could not possess the plot in Montenegro”. In this case, foreign people could buy (without open or registration of the firm) apartments (flats) but for house buying (as it assumes the purchase the land where it stands), moreover, plot, the registration of firm is necessary.

Registered firm-resident, in which property there are bought plots, could make investments in construction and sell finished objects.

Before purchase property in Montenegro, potential buyer should know what is the purpose of buying? If construction (for himself or for sell the finished object), that you should take into account several moments, as to security and confidence of investing. So:

1. Constructive works could be only on urbanized piece of land. Urbanization of the plot concludes in including it in Detailed Urbanized Plan (DUP) as a plot which is for construction. Main characteristics which could be on one or another plot are also defined by DUP. To these characteristics refer type of the object, maximal square, number of floors and etc. – these data should be considered by architect.

2. Purchase of plot not in DUP area, and also construction on such plot is very dangerous from investment point of view as construction in area on the DUP territory, the object which is not foreseen by DUP, what is absolutely forbidden.

3. So, for the moment, all plots of Montenegro are on one resister, but not in all regions there is DUP.

That is why plots which are for sale could be divided on three categories:

• Urbanized plots.
Construction on such plots could be done after forming the documents for new owner, agreement of the project and payment of all gatherings. While buying such plot in advance know about characteristics of object which will be construct here.

• Plots, urbanized plan of which are in the stage of development. Construction on such plots could be started only after acceptance of urbanized plan, and in a process of its confirmation it is possible some corrections

• Plots by which urbanized plan will be accepted in a future.

4. in such a manner, price of particular plot defined not only its location and commercial attraction but also level of risk which connects with presents or absents of urbanized plan on this plot.

Take into account everything what was mentioned above we could start buying property in Montenegro. The process of purchase consists of several levels:

1. Preliminary level – level of negotiation.

- Selection of property objects;
- Examination of chosen property;
- Negotiations with owners;
- Checking of lawful of registration

2. Main level – signing the contracts.

- Agreement of transaction condition;
- Preparation and signing the purchase and sell contract (first make primary contract purchase and sell where terms and conditions are specified, than sign by both parties – seller and buyer, than put a pledge 5-10% from object’s cost);
- Registration of signed contract in court which fix passage of property right which sign by all participants and register in court with the payment of registered gathering (from 80 to 400 euro).

3. Final level – forming right of property.

- Tax inspection defined market coast of bought property in Montenegro (tax is 3% from market coast of the property);
- Transaction is finished by full payment of Contract purchase and sell in Montenegro;
- Registration in cadastre of new owner for the property, buyer gets the Decision of putting in cadastre and certification.