Tourism Development Zones

Legal basis

Law on Tourism and Hospitality

Applies to

Hotel and resort projects on state-owned land outside the coast and the Capital City

The rules

What the investor gets

• Land granted under a long-term lease

Procedure

1. The investor's company submits a formal initiative with a feasibility study
2. The Ministry of Tourism forms a commission to assess it
3. The Government takes the final decision
4. Zone management goes to a company that meets the conditions in the feasibility study

How it works in practice

A Tourism Development Zone is built for a developer who already has a project in mind and wants long-term rights to state land away from the coast. It suits mid-sized hotel and resort schemes in the mountains, river valleys and inland towns: large enough to clear the €3 million and 50-unit thresholds, but often too remote or too early for a competitive tender. Because the investor starts the process, it rewards groups that have studied a specific parcel and can show a credible operator, a financing plan and a feasibility study that will stand up to a government commission.

Take a group that wants to build a four-star mountain lodge a little above the unit minimum on a state plot of a few hectares near one of the northern ski resorts. The land is state-owned, larger than 1 hectare, outside the Capital City, and the scheme passes the investment and unit tests, so the zone route is open. The group sets up a Montenegrin company, commissions a feasibility study and lodges a formal initiative with the Ministry of Tourism. If the commission and then the Government approve it, the land is granted on a long-term lease and the zone is managed by a company that meets the conditions set in the study.

Confirm early that the plot really is state-owned and free of claims, and that the municipality's plan allows tourism use at the density you need: a zone does not replace planning. Ask how long recent commission reviews have taken, what lease term and rent basis the Government will offer, and which commitments in your feasibility study become binding once the zone is granted. Check too what happens if the hotel is later categorised below four stars, since the category is one of the conditions the zone rests on.

A zone combines well with the other instruments. A four-star hotel inside one still benefits from the reduced VAT rate on rooms and food, and from a property tax reduction if the site lies in a priority tourist location. Because zones exist only in the northern and central regions, the condo-hotel threshold there is four stars rather than five, which gives the developer a route to sell some units once the hotel is trading. A zone is also, in effect, the investor-led version of a long-term state land lease.

This is a summary of the rules as the guide describes them, not tax or legal advice. Confirm current terms with the Ministry of Tourism, the Montenegrin Investment Agency or a local adviser before relying on them.

Where it could apply

Open opportunities where this instrument is likely to be relevant. Eligibility depends on the final project, so treat these as starting points.

OPP-ZB-02 · Žabljak

Žabljak mountain hospitality cluster

NorthernMountainPlanning set

Area

37,794 m²

Altitude

1,456 m

Beds

300

OPP-MK-02 · Mojkovac

Mojkovac Tara riverside camps and resorts

NorthernRiverPlanning set

Area

64,989 m²

Beds

238