Montenegro Moves to Rewrite Hotel Investment Rules

Montenegro is preparing to overhaul the rules governing the sale and operation of privately owned units inside hotels. A new Tourism and Hospitality Bill introduces four operating models, limits the proportion of hotel inventory that may be sold and imposes commercial-use requirements on certain privately owned units. As of September 11, 2026, however, the legislation has not entered into force: Montenegro's parliament continues to list the bill as “in procedure,” leaving existing law applicable to current transactions.

Montenegro's New Tourism Law Is Still a Bill

The Montenegrin government approved the proposed Tourism and Hospitality Law on June 18, 2026. It is intended to replace the existing legislation dating from 2018 and forms part of a broader effort to raise tourism-service standards, expand digital administration and strengthen consumer protection and destination management.

The proposal reached parliament on July 7 under reference 20-1/26-1. It remained under consideration as of September 11.

That distinction is critical for investors. The rules contained in the draft cannot yet be treated as legally binding requirements.

RONA Legal, which reviewed the bill in detail, also stresses that the existing Tourism and Hospitality Act continues to govern transactions until a replacement law is adopted and published in Montenegro's Official Gazette.

Montenegro Proposes Four Hotel Operating Models

The bill establishes four models for hospitality properties: the condo model, mixed model, integral or associated model, and tourist resort.

The framework is particularly important for developments in which individual rooms or apartments are sold to private investors while remaining part of a functioning hotel.

Under the proposed condo model, hotels in Montenegro's coastal region and Podgorica would need a minimum five-star classification. Properties in the northern and central regions outside the capital would need at least four stars. Hotels would have to operate throughout the year.

Individual accommodation units could be sold, but they would have to remain in commercial use for at least ten months annually. Hotel common areas could not be sold separately, while individual units would be registered in the cadastre subject to their commercial-use obligations.

For buyers, this makes ownership fundamentally different from purchasing a conventional apartment. Title to the property would coexist with restrictions linked to the operation of the hotel as a single tourism business.

Mixed Hotels Face 50% to 60% Sales Caps

The proposed mixed model has additional scale requirements. Hotels on the coast and in Podgorica would need at least five stars and 120 accommodation units. In the central and northern regions outside the capital, the threshold would be four stars and 60 units.

The bill also limits how much of the property can be sold.

Normally, accommodation units intended for individual sale could account for no more than 50% of the hotel's total capacity.

The limit could rise to 60% for larger properties. On the coast and in Podgorica, that exception would require a minimum five-star hotel with at least 240 units. In the central and northern regions, it would require at least four stars and 120 units.

The measure is designed to prevent developments formally classified as hotels from being converted predominantly into privately owned residential property.

Management Contracts Become Central to Ownership

The bill also sets detailed requirements for contracts between unit owners and hotel managers. A management and maintenance agreement would have to be signed together with the property-sale contract.

The agreement would regulate hotel operations, management and maintenance charges, branding fees, insurance, repairs, liability, reporting and owners' rights in common areas.

It would also address the owner's remuneration. The draft links payments to average rents and occupancy for comparable units within the hotel and provides for a minimum payment equivalent to 10% of the amount calculated under that formula.

Units covered by the condo regime would need to remain commercially available for at least ten months of the year. Periods outside commercial use would also be restricted.

These provisions may prove more important to investors than the formal star rating of a project because they determine both personal-use rights and the mechanism through which investment income is calculated.

Existing Law Already Restricts Hotel-Unit Ownership

Some of the concepts are already part of Montenegro's current system.

Official government guidance states that condo hotels on the coast and in Podgorica must have at least five stars, while qualifying properties elsewhere require at least four. They must operate for 12 months of the year, and individually owned units must remain in commercial use for at least ten months.

Units are also registered individually in the real-estate cadastre with an obligation linking them to hotel management.

The proposed legislation therefore does not create privately owned hotel units from scratch. Its significance lies largely in restructuring and expanding the statutory models and setting more detailed rules for ownership, management contracts and the proportion of accommodation that can be sold.

Tourist Resorts Would Receive Their Own Framework

The bill separately defines a tourist-resort model.

A qualifying resort would occupy a plot of between five and 150 hectares and operate as a single commercial and functional entity. In northern and central Montenegro, it would need at least one four-star hotel with 60 accommodation units. On the coast and in Podgorica, the requirement rises to a five-star hotel with at least 120 units.

Such developments could include tourist villas, wellness facilities, restaurants, golf courses, marinas and sports infrastructure.

The provision is particularly relevant to Montenegro's coastal investment market, where major developments frequently combine hotels, privately owned residences and leisure infrastructure. The new framework seeks to preserve the tourism function of these complexes rather than allowing them to evolve into conventional residential developments.

Operators Would Have 12 Months to Adapt

If adopted in its current form, the law would give existing companies, entrepreneurs and individuals involved in tourism and hospitality 12 months from its entry into force to bring their operations into compliance.

Holders of certain existing licences, approvals and tourism-register entries would also have to reapply within the same period. Existing permissions would continue to apply until replacements were issued unless another legal reason caused them to expire.

Proceedings already started before the new law enters into force would be completed under the existing legislation. The bill itself provides that the new act would become effective on the eighth day following publication in Montenegro's Official Gazette.

The transition period reduces the risk of an immediate disruption to operating hotels. Developers selling projects today face a different issue: contracts signed under the current system may remain in force once the regulatory framework changes.

Montenegro Is Tightening Oversight of Tourist Accommodation

The legislative overhaul coincides with stronger enforcement across Montenegro's tourism industry.

Ahead of the 2026 summer season, the government identified unregistered accommodation as one of its main inspection priorities. Authorities said controls would be intensified particularly in coastal areas, where private accommodation forms an important part of the tourism market.

The proposed law also places greater emphasis on centralised tourism data and digital information systems.

For property investors, the broader direction is clear: the distinction between simply owning a holiday property and operating accommodation commercially is likely to become increasingly important.

As International Investment experts report, the immediate risk is treating the proposed rules as though they were already law. The 50% and 60% sales caps, expanded operating models and 12-month transition period remain provisions of a bill. Yet buyers cannot safely ignore them either. Hotel developments have long construction and sales cycles, meaning contracts signed under today's law may still be operating after a new framework takes effect. For an investor, the project's legal model, restrictions on personal use, management contract and ability to adapt to future regulation are therefore more important than headline rental-yield promises.

FAQ: Montenegro's Tourism and Hospitality Bill

Has Montenegro adopted the new Tourism and Hospitality Law?

No. As of September 11, 2026, the bill remains under parliamentary consideration.

Can foreigners currently buy hotel units in Montenegro?

Yes, provided that the project complies with the models and requirements established by current Montenegrin law.

What would change for condo hotels?

The proposal sets rules covering hotel classification, year-round operation, commercial availability of privately owned units and contracts between owners and hotel managers.

How much of a hotel could be sold to investors?

Under the proposed mixed model, the standard ceiling would be 50% of accommodation capacity. Certain larger hotels could sell up to 60%.

Could an owner use a condo-hotel unit throughout the year?

Not under the proposed condo regime. Units would have to remain in commercial operation for at least ten months annually.

When could the new law take effect?

There is no confirmed date. Parliament must first adopt the legislation. The current text provides for entry into force eight days after publication in the Official Gazette.

What happens to existing hotels?

The bill proposes a 12-month period for existing operators to align their businesses and relevant permissions with the new rules.