Dr Petar Ivanovic CEO of MIPA Investment Opportunities

Dr Petar Ivanovic CEO of MIPA Investment Opportunities In Montenegro

Role of MIPA l Set up in March 2005 MIPA operates under the Prime Minster Office and serves as a platform for marketing foreign direct investment opportunities on behalf of the Government. l The President of MIPA’s board is Prime Minster, while members of the Board are ministers and representatives of private sector. l Basically, MIPA has a triple role: #1 To assist foreign investors in setting up their businesses; #2 To recommend Go. M to remove red tapes for doing business; #3 To provide statistics to the Go. M about foreign investments;

Recent Past 1994 – 1997 UN Sanctions; l 1999 - NATO bombing; l 2000 - over 20% of total population were refugees; l Montenegro – the only ex YU republic on which territory there was no war and with the stable government for 16 years; l 2006 – Montenegro recover its independency; l

Dilemmas We Had How to develop country super-fast? l How to stop brain drain and create future for young people? l How to improve environment for business development? l How and how fast to privatize state ownership? l How to attract investors? l

Our Answer l By increasing economic freedoms l Opening country – no visa requirements; l Accepting sound money – euro; l Reducing taxes; l Strengthening competition; l Improving the rule of law; l Building trust through improvement of the business environment; l Taking responsibility for the future;

What We Achieved? l l l l Telecommunication – 100% private (3 GSM); Banking – 100% private (12 banks); Capital market – 100% private (35 broker houses); Agriculture – 100% private; Services – 100% private; Oil import and distribution – 100% private (12 importers); Tourism – mostly private; Industry – mostly private;

Montenegro Today 1. 2. 3. 4. 5. 6. 7. 8. The highest FDI per capita in Europe; According to Fraser Institute - the highest level of economic freedoms in the region; Largest share of privatized capital in the region; The most dynamic capital market in the region; Budget surplus; The only state in the region which use EURO; The lowest unemployment rate in the region; The lowest inflation rate in the region;

Montenegro Tomorrow

So, Why Montenegro? 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Safe and stable; Predictable macroeconomic stability; Ability to remit profit, dividends and interest; National Treatment of Foreigners; Euro; Favorable Tax Climate (CT 9% VAT 17% PIT 15%); Easy Business Start Up (1 € + 4 days); International Accounting Standards (IAS); Location and climate; Increasing economic freedom;

Secret Love of Lord Byron While a picture tells a thousand words, Lord Byron’s words, in the early 19 th century, paint a masterpiece picture: “At the birth of our planet, the most beautiful encounter between land sea must have happened at the coast of Montenegro. When the pearls of nature were sown, handfuls of them were cast on this soil. ”

Why are FDI’s Crucial? l FDI’s are changing way of thinking; l Speeding up the reform processes; l Changing the structure of the economy; l Contributing to GDP, GDP growth, employment, budget revenues, export/import… l Developing regional cooperation – business language is unique language;

Origin of Investors l Investors are coming from 63 countries; l Comparing to total number of investors, none of the countries dominates; l Based on the value invested, investors from following countries are leaders: Norway, Russia, Hungary, Austria, Slovenia, Great Britain.

Investments are increasing due to: l Unique investment opportunities; l The reform of the financial services sector; l The positive experience of existing investors; l The ability to serve customers in Western and Central Europe; l The quality of service MIPA provides.

FDI in 2000 -07 (in million €) Government plan in previous Economic Agenda

Number of Foreign Companies

Firms Operating in Montenegro

Services Including banking Infrastructure Energy Investment Opportunities High Tech Tourism

Adriatic Shipyard Bijela Public tender for purchasing 62, 7123%; Enclosed workshops – 14. 000 m 2, connected to all energy supplies and equipped with 14 bridge cranes of 2. 5 - 40 t lifting MONTENEGRO capacity; Outdoor working platforms – 4. 600 m 2, connected to all energy supplies and equipped with two 25 t portal cranes and three 8 -50 t auto-crane;

Marina Development Ada Bojana Velika Plaza Valdanos Buljarica Lucice Jaz Tivat – Kalardovo Njivice

Free Trade Zone Port of Bar Favorable geographical positions; No customs and tax duties; MONTENEGRO Flexible, efficient and profitable conditions for doing business; 95% of total passenger and freight transport in Serbia and Montenegro;

Expected tenders Tobacco Co “Duvanski kombinat”; l Health-spa in Herceg Novi; l Electric Company l Obod Cetinje l Wine Company l Port of Bar l Montenegro Airlines l Railroads l

Expected tenders Water Supply Systems; l Communal Services; l Highways; l New hydro plants; l Ada Bojana; l Send Beach in Ulcinj; l Valdanos; l

Potentials of Montenegro? l BUSINESS HUB for region; l Regional financial center; l High-tech & educational center; l Transportation corridors;

Expectations To attract minimum 5 billion FDI till 2011; l And minimum 30 billion till 2030; l l FDI per capita in 2007 -2011 will be 8, 100 € or 4 times more than in the period 2001 -2006.

l. Q - Why You Should Invest in Montenegro? l. A - Because you can make profit! l. Q – What you should do? l. A – Do it now. Waiting will only decrease your future profit!

MIPA Publication Guide foreigner investors, containing simple and straightforward answers on the most frequently asked questions: • economic climate in Montenegro. MONTENEGRO • capital market • operational costs • foreign investments • business registrations, laws, tax, … Publication is available on MIPA's web page: www. mipa. cg. yu

Montenegrin Investment Promotion Agency (MIPA) Jovana Tomasevica 2 Podgorica 81000, MNE Phone: (00 382 20) 203 -140; 203 -141; 202 -910 E-mail: ivanovic@cg. yu Web site: www. mipa. cg. yu

Thank You!