Startups in Montenegro.

Montenegro is a country on a Mountain.

Translating from the Latin Montenegro means the Black Mountain. Despite its relatively small size, Montenegro has always been visible on the political scene of Europe. It used to be a part of the Roman Dolmatia province (Greeks called it Illyria) when its warriors fought three Illyrian Wars with Romans (229 BC, 219 BC and 168 BC).

After the split of the Roman Empire in 395Montenegro territory had came under the Byzantine’s rule and then gained its independence in 1042. However, it soon had joined the Serbian realm and stayed there until Ottomans spread their influence all across the Balkan peninsula in 16th century. Under the Turk’s governorship Montenegro enjoyed a high level of independence thanks again to its mountainous terrain which made it very difficult for Ottoman soldiers to completely subdue the local population most of which were very capable military.

Most of 18th, 19th and beginning of 20th centuries Montenegro had held an independent or semi-independent status (as a principality or as a kingdom) until it again joined Serbia in 1922 and later became part of the Kingdom of Yugoslavia in 1929. During the World War II Germany and Italy invaded Montenegro and a fierce guerrilla war was fought between “Partisans” and anti-communists, pro-German “Chetniks”. It ended by Yugoslavia regiments liberating Montenegro territory in 1944.

From 1944 to 1992 Montenegro had been the separate region of socialist Yugoslavia Republic. At that time it enjoyed an influx of tourists specifically from Eastern Europe and Soviet Union. It provided Montenegro population with one of the highest standards of living in the Warsaw block. Additionally, Montenegro received significant additional payments from the central federal budget of Yugoslavia for its infrastructure projects. After the dissolution of the Soviet Union in 1990th Montenegro stayed as part of Serbia until May 2006 referendum made it one of the youngest newly independent states on earth.

Montenegro today is the Presidential Republic with its unicameral, 21-members Parliament — Skupština Crne Gore — dominated by two parties: the pro-European party Demokratska Partija Socijalista Crne Gore(36 seats) and the opposition alliance Demokratski front (18 seats). Plans to joint NATO has recently became one of the most contentious issue of Montenegrin politics.

Montenegrin $4.2 billion GDP isn’t big enough, its less-than-million population is too small and its industrial and service base is too low-tech and under-developed to sustain a large virtual economy. As a result, the local startup ecosystem is still in its infancy. Fixed line Internet penetration rate (above 60%) is at EU average. At the same time, practically every Montenegrins owns a mobile telephone and that may create an initial users base for e-commerce, marketplaces, FinTech and other B2C startups.

Montenegro is close to EU and can serve as a low-cost and low-tax launch pad for high-tech founders aiming at neighboring Eastern and Western European markets. However, a deficit of qualified personnel may be a serious deterrent for startups growth as many local young technical talents, faced by 20% unemployment rate, seek jobs outside of their country borders.

Business Notes for Startups Founders:

  • political climate: indifferent;
  • economic climate: not friendly;
  • regions to focus: Western Europe, EU;
  • industries to focus: marketplaces, e-commerce;
  • major limitations: slowing GDP growth (under 3%), high unemployment, low-wages (less that $800 per month), brain drainage, ;
  • stimulus: closeness to EU, low costs, low income tax (13%);
  • opportunities: to run low-costs startup aimed at European markets.

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