Visit-Montenegro.com : Foreigners Will Be Able to Register their Land Ownership

Visit-Montenegro.com : Foreigners Will Be Able to Register their Land Ownership

Luksic Announces the Government would Revoke the Decision of the head of Directorate for Real Estate, Mico Orlandic:

Podgorica – Montenegrin government will revoke the decision of the Director of the Directorate for Real Estate, Mico Orlandic. This decision ordered Cadastres not to register land property for companies which have been registered in Montenegro, but are, in fact, owned by foreign capital, “Vijesti” have learned.

Most probably this Thursday, government is expected to adopt the changes of sub-legislative acts which had been prepared by Minister of Finance, Igor Luksic. This move will ensure that the companies which are registered in Montenegro and which had been founded by foreigners, will receive the same treatment like domestic companies. This will allow them to register the land they had bought with the Cadastre without problems.

Orlandic, who is a high official of Social-Democratic Party (SDP) has recently ordered Cadastres to request documents confirming that the company which buys certain land would use it for business purposes. Problem lies with the fact that the Ministry of Finance does not want to issue such papers to the companies registered in Montenegro, regardless of whether they are owned by domestic or foreign capital, as it treats all companies as domestic.

Old Federal Laws, which is being implemented in Montenegro, allows foreign companies to by and register land, houses, flats and office space, provided they prove that their real estate will be used in business purposes.

Domestic companies, obviously, do not need such evidence, which should be issued by the Ministry of Finance, regardless of who owns the company.

Such reading of the legislature had also been provided by the Court of Commerce and it has been sent to the Real Estate Directorate. However, investors still could not register their property in Cadastres.

Asked by “Vijesti” if the government and Finance Ministry have done something about this problem, Luksic said that “a detailed analysis of the legal framework in Montenegro had been conducted, and that the Ministry would propose changes in the legal provisions of certain acts in order to ensure full implementation of Law on Foreign Investments and Businesses.”

Absurdity of the situation lies with the fact that, for instance, Telekom, CKB, Jugopetrol and other companies are treated as foreign companies, as they are owned by foreign capital. According to our regulations, they are domestic companies and tax-residents and that is the case with all similar examples. The rights of foreign individuals and corresponding ownership and legal structure are entirely other issue and they have to be obeyed”, Luksic said.

Earlier, government stated - unofficially - that the new order of the Director of the Real Estate Directorate had sparked protest of certain foreign investors who have founded their companies here and who had been buying land. Some of them filed complaints.

Draft Law on Ownership and Legal Relations, which will be discussed at the Parliament at some later date, provides possibility for Montenegrin companies, which are owned by foreigners, to register land using their name. The adoption of this law requires a two-third majority in the Parliament. New Law also provides the possibility for foreign individuals to buy and register land, except in cases when it is situated at certain protected locations.

At the moment, foreign individuals are prevented from buying land to their name by the provision of yet another law. This provision has not been implemented in practice for a long time. With Orlandic taking over as head of the Real Estate Directorate last year, a decree had been issued, stipulating that foreigners could no longer be registered as an owner.

Numerous owners of real estate in Montenegro, along with the building investors, claimed that the decision to forbid registering of land for foreign companies caused a drop of circulation on real estate market and withdrawal of certain investors.

Democratic Party of Socialists and SDP, as is already known, have conflicting positions regarding property rights and privatization in Montenegro. There have been numerous cases of decisions which have been reached, only to be canceled a bit later, or becoming merely a pawn in maneuvers inside the ruling coalition.

(23 July 2008)

By: Z.VUČINIĆ