We wrote about the statutory models for buying into a Montenegrin hotel some weeks ago and said, in terms, that a replacement Act was in progress, that we had not read the Proposal's text, and that we would therefore attribute no change to it and state no future thresholds. That was the right position to take at the time. It is no longer necessary.
This page sets out what the Proposal would do, on the basis of its text. Everything in it is conditional, and the condition has not been satisfied.
Status, stated precisely. The document read here is the Predlog zakona o turizmu i ugostiteljstvu — the Proposal of the Law on Tourism and Hospitality — together with the report on the public consultation, that report numbered 01-330/25-51/58 and dated 15 August 2025, obtained from the Government of Montenegro's own document register and read on 5 September 2026. As at that date we located no publication of a replacement Act in the Official Gazette: gov.me returns the Proposal, the opinion on the Proposal and the consultation report, and no promulgated law. Until that changes, the Act currently in force continues to govern every question below, and nothing here should be treated as the law of Montenegro today.
Why a bill is worth reading before it passes
Two of its own provisions answer that.
Article 132 would require companies, other legal persons, entrepreneurs and natural persons already performing tourism and hospitality activity to bring their operations into line within 12 months of entry into force. Article 133 would require holders of an existing licence, approval, decision on entry in the Central Tourist Register or identity card for the listed activities — a list that expressly includes Article 105 and Articles 108 to 111, the business-model provisions — to re-apply within 12 months, with existing permissions remaining valid until the new ones issue, unless some other ground for their termination intervenes first.
Article 134 protects work already under way: proceedings on applications for approvals, licences, identity cards and category allocation begun under the current Act would be concluded under that Act.
So a project being structured now is being structured into a 12-month alignment obligation that would start on a date nobody can yet name. That is a reason to date every assumption, not a reason to pause.
Four business models, where the current Act frames fewer
Article 104 would list four models of operating a hospitality facility: the condo model, the mixed model, the integral (associated) model, and the tourist resort.
The condo model — Article 105
Article 105(1) defines it as the operation, management and maintenance of a hotel as a commercial unit, offered on the market as a single tourist product exclusively through the manager or hotel operator, while ownership of the individual net areas of the accommodation units sits with natural or legal persons whose right to use those units is limited by the Act.
The thresholds are in Article 105(2), and they are not modest:
| Region | Minimum category | Operating requirement |
|---|---|---|
| Coastal region and the Capital | Five stars | In function 12 months |
| Northern and central regions, excluding the Capital | Four stars | In function 12 months |
Then the constraints that decide whether a deal works. Article 105(3): units may be individually sold, and must be in commercial function at least ten months of the year. Article 105(4): the common parts of the hotel cannot be sold. Article 105(5): units are registered individually in the cadastre with a burden of commercial use. Article 105(6): an annotation of the sale contract is entered. And Article 105(7): the sale of units must not change the business model — the model is a property of the hotel, not of the current owner mix.
The management contract — Articles 106 and 107
Article 106(1) would base management and maintenance on two contracts: the unit sale contract and the management and maintenance contract. Article 106(2) requires the management contract to be signed simultaneously with the sale contract. A buyer who is shown one and promised the other later is being shown half the transaction.
Article 107 then prescribes what that contract must regulate, and the list runs to the construction, equipping and opening project and business plans; the operating term, extension, termination and rescission; the manner of running and managing the hotel; the operating approval and category; management, maintenance, brand-use and other fees; insurance and compensation; non-performance; current and investment maintenance; liability for damage and repairs; guarantees and security; house rules; reporting and communication; legal protection in insolvency, bankruptcy, compulsory administration or the appointment of an administrator; and the owner's rights over common areas.
Three items in that list are commercial terms the statute would take out of negotiation:
- A floor on the owner's return. The contract must provide for the owner's payment determined on the basis of a percentage of average rent and average occupancy of the same type of units across the whole hotel for the period their unit is in commercial function — and that payment may not be lower than 10% of that amount.
- A floor on availability. The term must specify a period of at least ten months during which the unit is in commercial function, with the unit out of commercial function for at most 15 consecutive days, and at most ten days per month.
- An annual deadline. The contract between the unit owner and the manager must be concluded by 31 January for the current year.
The mixed model — Article 108
Article 108(1) would require, for the mixed model, a hotel of at least five stars with a minimum of 120 accommodation units in the coastal region and the Capital, or at least four stars with a minimum of 60 units in the central and northern regions excluding the Capital, in function 12 months and forming a single whole.
Article 108(3) caps the share of the hotel that can be sold: the percentage of accommodation units intended for sale may not exceed 50% of total accommodation capacity. Article 108(4) creates the exception — in a hotel of at least five stars with at least 240 units in the coastal region and the Capital, or at least four stars with at least 120 units in the central and northern regions excluding the Capital, the share may go to 60%.
A drafting point worth noting rather than glossing: in the text we read, Article 108 contains two paragraphs numbered (3) and two numbered (4) — the caps, and then separate provisions on delegating management to a hotel operator and on applying Articles 106 and 107. Anyone relying on a paragraph reference in this article should quote the words as well as the number.
Integral model and resort — Articles 109 and 110
Article 109(1) would define the integral (associated) model as the operation of three or more hotels or other facilities associated to offer a single tourist product and constituting a single functional whole, with the rights and obligations between the managers regulated by a written and certified contract (Article 109(2)).
Article 110(1) would define a tourist resort as a model operated in a facility built on land of at least 5 hectares and no more than 150 hectares, forming a functional and business whole, with at least one hotel of at least 60 units at four stars in the northern and central regions excluding the Capital, or at least 120 units at five stars in the coastal region and the Capital, capable of containing tourist villas, wellness centres, restaurants, golf courses, marinas, sports grounds, ski areas and other facilities managed by one or more companies, and required to be in function 12 months a year. Article 110(2) would apply the Articles 106 and 107 management rules to it.
Categorisation would change shape too
Article 95(2) would keep the one-to-five-star scale, and Article 95(3) would allow a specialisation for hotels of three stars or more with particular facilities and equipment. Article 95(4) would require the categorisation application within five days of receiving the approval to perform hospitality activity. Article 95(5) would set the category for four years, and Article 95(8) would have the data entered in the Central Tourist Register.
Article 96 would put the assessment to a three-member commission — a chair and two members appointed by the head of the competent authority — deciding on an on-site inspection, by majority, and issuing a decision.
Article 97 would govern re-categorisation. Under Article 97(2), for facilities up to and including three stars the operator would submit a self-categorisation report with the application, and under Article 97(3) the application must be filed at least 15 days before the existing category decision expires.
One discrepancy we are flagging rather than resolving
Article 135 of the Proposal would repeal the Zakon o turizmu i ugostiteljstvu, and it identifies that Act by the chain "Službeni list CG" br. 2/18, 13/18, 25/19, 76/20 and 130/21. The consolidated text we read for our earlier piece on hotel structures carried a longer chain, including 4/18, 67/19 and 084/24 of 06.09.2024.
We are not going to explain that away. It may be a drafting omission in the bill, or it may reflect how those instruments amended the Act. What it means practically is that anyone relying on the repeal clause to work out exactly which instruments fall away should check the position against the gazette at the time any Act is actually promulgated. Article 136 would bring the new Act into force on the eighth day after publication.
What to do about a bill
Nothing in this document changes an obligation today. What it changes is how you write the documents you are signing today.
If you are buying a unit in a project that is being marketed on a condo or mixed basis, the questions the Proposal makes worth asking now are whether the hotel would meet the Article 105(2) or Article 108(1) category and capacity thresholds if the bill passed in this form; whether the share of units being sold would sit inside the Article 108(3) 50% cap or the Article 108(4) 60% exception; and whether the management contract you are being offered already contains the Article 107 items, particularly the return floor, the availability limits and the January deadline. If it does not, that is not yet a breach — but it is a gap you will be asked to close within the Article 132 twelve months.
If you are the developer or operator, the Article 133 re-application duty is the one to plan for, because it reaches licences and register entries that are currently valid and would remain valid only until the new ones issue.
Before you sign into a model that may be redefined
Send us the marketing model, the draft sale and management contracts, the current categorisation decision with its date, and the cadastre extract for the unit and the plot, and we will set out where the project sits under the Act in force, where it would sit under the Proposal as drafted, and which clauses can be written now so that neither answer requires re-papering later. The models under the current Act are in buying into a Montenegrin hotel, the acquisition-structure question in share deal or asset deal, the operator layer in hotel operating agreements, and how we run hotel files sits with our hotel investment practice.
