Every incentive an investor is offered in Montenegro — a tax relief, a state guarantee, a plot sold below market, a debt written off by a state-controlled company — is a candidate for state aid control. If it is aid and it was not cleared first, the money comes back with interest.
Most advice on this still describes the 2018 act. That act was repealed on 13 August 2025. Its replacement was then amended on 14 May 2026, and the amendment did two things that change the analysis for anyone structuring an incentive: it replaced majority ownership with control throughout, and it imported the European Commission's own state aid rulebook by reference, with the Montenegrin competition agency exercising the Commission's functions.
Sources, checked on 20 September 2026: Zakon o kontroli državne pomoći, "Sl. list CG" 89/2025 of 5 August 2025, registarski broj 1193, EPA 618 XXVIII, adopted 30 July 2025, in force on the eighth day after publication — 13 August 2025 — shown as in force; the text was read from the Official Gazette's own page images (21 pages). Zakon o izmjenama i dopunama, "Sl. list CG" 70/2026 of 20 May 2026, registarski broj 1318, EPA 995 XXVIII, adopted 14 May 2026, in force on the eighth day after publication. Article 65 of the 2025 act repealed the earlier act at "Sl. list CG" 12/18; Article 62 leaves procedures already begun to be finished under it. The act's footnote records transposition of Council Regulation (EU) 2015/1589 and the Commission Notice on the recovery of unlawful and incompatible State aid (2019/C 247/01). Zakon o zaštiti konkurencije, "Sl. list CG" 46/2026, published and in force 2 April 2026. This page states Montenegrin law.
What counts as state aid: four cumulative conditions
Article 2 sets them out, and all four must be met.
- The aid is granted directly or indirectly from public funds, by a decision of the Government, a state administration body, a local self-government body, a company under the control of the state or a municipality, or a legal person that manages and disposes of public revenues and state property — including EU funds and other public funds.
- It is granted to beneficiaries carrying on an economic activity, placing them in a more favourable position than other market participants.
- It is not provided on the same terms to companies, or is provided selectively by reference to the company's size, type of activity, place of business or place of registration, or is intended for a single company or for the production of particular goods.
- It threatens or may threaten competition and affects or may affect trade between Montenegro and other states, contrary to ratified international treaties.
The first limb is where the May 2026 amendment bites. Article 1 of the amending act replaced the words "in majority ownership" with "under control" in Articles 2(1), 3(1), 4(1), 11(1)(5), 21(1), 30(1) and 59(1) and (2). A state enterprise the state does not majority-own but does control is now inside the perimeter — on the giving side and on the penalty side.
The instruments: eight ways to give aid without writing a cheque
Article 11 is the list investors should read before agreeing terms with any public counterparty. Aid may be granted as:
- a subsidy or a subsidised interest rate on loans;
- fiscal relief — tax, contributions and other public revenues;
- a guarantee from the state or a municipality;
- assignment of the state's or municipality's profit or dividend to the beneficiary;
- write-off of debt owed to the state, a municipality, a company under state or municipal control, or a legal person managing public revenues and state property;
- sale or use of state or municipal property below market price;
- purchase or use of property or products by the state or a municipality above market price;
- other aid in accordance with law.
Items 6 and 7 are the ones that appear in ordinary transactions rather than in incentive programmes. A discounted plot, a lease at a friendly rent, an offtake contract priced generously — each is on the statutory list.
Article 12 converts them to a number: the subsidy equivalent, calculated using reference and discount interest rates which the Agency publishes on its website, with the Ministry prescribing the method. Article 13 fixes the date of grant as the date the beneficiary acquired the legal right to receive the aid — not the date of payment.
A "scheme" includes a contract
Article 5 defines a state aid scheme as any act — a law, another general regulation, a decision, a contract, a programme or any other act — under which aid may be granted directly to beneficiaries for a defined period, in a defined or undefined amount, on the conditions set in that act. Individual aid is aid not based on a scheme, and also any aid that is subject to the notification duty but granted under a scheme.
That the word contract sits inside the definition of a scheme is the provision most likely to surprise a foreign investor negotiating directly with a public body.
Article 10 carves out de minimis aid — aid with no significant effect on competition, that is, aid failing the Article 2(4) condition. The Act sets no euro figure: the rules and conditions are prescribed by the Ministry, so the threshold lives in a rulebook and has to be checked against the version in force when the aid is granted.
Article 7a: the EU rulebook, applied here, by the Agency
This is the provision the 2026 amendment inserted, and it is the most consequential sentence in the statute.
This Act is applied in accordance with the rules laid down in the regulations, decisions, guidelines, communications, notices, recommendations, opinions and other acts of the European Commission, the European Council and the European Parliament relating to the application of the Treaty provisions in Title VII, Chapter 1 — the competition rules — of the Treaty on the Functioning of the European Union.
The second paragraph makes the list of those acts, and their Montenegrin translation published in the Official Gazette, part of Montenegro's legal order in state aid control. The third is the operative one:
For the purposes of applying this Act and those acts, the competences which the EU rules assign to the European Commission are exercised in Montenegro by the Agency for the Protection of Competition, and "Member State" means the state aid giver in Montenegro.
So the analytical framework is the EU's — the categories, the tests, the recovery doctrine — applied before accession, with the domestic agency standing in the Commission's place. Where the EU rules require specific national measures, Article 7a(4) sends those to separate regulations, and Article 7a(5) preserves the giver's duty to notify every aid measure to the Agency regardless.
Compatible aid, and the discretionary list
Article 7 separates two groups. Aid is compatible where it has a social character, is aimed at particular categories of consumers and is granted without discrimination as to the origin of goods and services, and where it remedies damage caused by natural disasters.
Aid may be treated as compatible where it serves: economic development of Montenegro or of a region where living standards or employment are below the Montenegrin average; an important project of public interest or overcoming a serious disturbance in the economy; development of certain activities and areas, where it does not adversely affect trading conditions contrary to the public interest; and culture and heritage, among others.
Those categories will be familiar to anyone who has read Article 107 TFEU, which after Article 7a is exactly the point.
Notify first, grant second
Article 15 puts the notification duty on the giver, not the recipient: the giver notifies the Agency of the aid, as a scheme or as individual aid, on the prescribed form, with the draft act and supporting documentation. The notifier is responsible for the truth and accuracy of the data. And if the proposer takes the view that the measure is not state aid, they must say so in the notification and give their reasons.
Article 16 is the standstill, and it is unqualified:
State aid notified under this Act may not be granted before the Agency has decided on its compatibility.
Article 30 lets the Agency demand information from state bodies, municipalities, state-controlled companies, public-funds managers, other legal persons, companies and associations of companies — including secret data, business secrets and other confidential information — within a period of not less than 15 days. Article 31 allows the Agency, during the investigation, to order a temporary suspension of further granting, and a temporary recovery.
Recovery: four months, interest from the date of grant
Article 35 puts the duty to recover on the giver, and the duty to repay on the beneficiary. Interest is calculated on the amount from the date the aid was granted to the date of recovery, with statutory default interest.
Article 36 sets the clock and closes the escape routes:
| Step | Deadline |
|---|---|
| Recovery carried out | without delay, at the latest 4 months from service of the recovery decision |
| Recovery plan filed with the Agency | within 2 months of receiving the decision |
| Deferral or payment by instalments after the four months | prohibited |
| Beneficiary with no seat or permanent establishment in Montenegro | recovery under ratified treaties or the private international law act |
The general rules on compensation for damage apply to the recovery. Article 46 leaves an administrative dispute against the Agency's decision.
What it costs to complain
Article 45a, inserted in 2026, is short and practical. In proceedings before the Agency under this Act — other than a procedure started on a third party's complaint under Article 29 — each party bears its own costs, and no fees are payable in proceedings before the Agency.
A competitor who believes a rival received uncleared aid therefore has a route that costs filing effort rather than money. Article 29 then obliges the Agency, unless it rejects the complaint, to order the giver to respond on the facts within a period of not less than 15 and not more than 30 days.
The registers, and the two dates in the calendar
Article 14 has the Agency keep two electronic registers — of granted state aid and of granted de minimis aid — recording the giver, the beneficiary, the measure, the legal act, the decision number, the type of beneficiary, the sector, the type of aid, the amount, the date of grant and the date of publication of the granting act. Givers must enter the data within 30 days of the grant, through an identification code the Agency issues to their authorised person.
Article 54 adds the reporting rhythm: givers send the Agency data on aid granted in the previous year by 15 March, and the Agency delivers its annual report to the Government and Parliament by the end of the second quarter — and to the European Commission.
And Article 59 prices the failures. A company under state or municipal control, or a legal person managing public revenues and state property, is fined €500 to €5,000 for, among other things, not entering register data within 30 days, entering inaccurate data, giving untrue data in the notification, or not responding in the investigation. Article 58 limits misdemeanour proceedings to two years from the act, with an absolute limitation of four years.
One open question, stated as it stands
Article 64 defers Articles 53 and 54 — the Agency's state aid functions and the annual report — to the entry into force of the Competition Act "which will regulate the new status and competences of the Agency".
The 2025 text said amendments to the Competition Act. Article 6 of the May 2026 amending act deleted the words "amendments to", leaving the Competition Act itself as the trigger. The new Zakon o zaštiti konkurencije at "Sl. list CG" 46/2026 was published and entered into force on 2 April 2026 — six weeks before that deletion.
The natural reading is that the legislator was aligning the cross-reference to the act that had just come into force, so the condition is satisfied and Articles 53 and 54 apply. The residual doubt is the future tense the provision kept. If a case turns on whether the Agency's Article 53 competence was in application on a given date, that is a point to argue from the texts and the dates rather than to assume.
What this means before you accept an incentive
- Ask who is giving it. Article 2(1) reaches companies under the control of the state or a municipality since May 2026, not only majority-owned ones.
- Price the non-cash terms. A plot below market, a lease, a guarantee or a debt write-off are all on the Article 11 list, and Article 12 converts them to a subsidy equivalent.
- Check the notification happened. The duty is the giver's, but the money is recovered from you, with interest running from the date of grant, and Article 36 forbids instalments after four months.
- Read the contract as a possible scheme. Article 5 includes a contract in the definition.
Where the incentive sits inside a tourism or resort project, the programme side is covered in tourism and resort development; for a greenfield build, see the greenfield investment guide. One tax measure already carries its own state aid declaration duty — the loan withholding regime in the 104/2026 note requires a declaration of other state aid received in the previous three fiscal years, filed with the corporate tax return.
What this page does not decide
Whether a particular measure is aid at all is a case-specific analysis, and after Article 7a it runs on EU doctrine that this page does not reproduce. Nor does this page cover the de minimis threshold, which sits in a ministerial rulebook rather than in the Act, the sectoral rules for agriculture, fisheries and transport, or the detail of the investigation procedure. Nothing here is advice on a pending Agency proceeding.
Who we act for
We act for one side and we name it at the start — the investor receiving an incentive, or a competitor challenging one. Fees are fixed and published, and a first consultation is charged and credited against the engagement if it proceeds.
Before you sign the incentive
Send the draft act, decision or contract that grants the benefit, the identity of the granting body and its ownership or control position, and any correspondence about a notification to the Agency. We come back with a written note: whether the four Article 2 conditions are met on your facts, which Article 11 instrument is actually being used and what its subsidy equivalent looks like, whether Article 16 has been complied with, and what your exposure under Articles 35 and 36 would be if it has not.
