What is the future of Tivat from the aspect of funding and investments, and why Tivat still represents an inexhaustible gem, both for the business development and for living in Tivat
Situated in the heart of the Bay of Kotor, Tivat has always been interesting to both domestic and foreign investors. In the economic development of Tivat, two periods can be clearly identified. The first, until the end of the 20th century, when the main driver of the economic development of Tivat and the environment was the “Naval Technical Institute Sava Kovačević” or “Arsenal”, as was commonly called a military shipyard and second, from the beginning of the 21ST century, which we can tie to the start of realization of the project “Porto Montenegro”. From that moment until today, Tivat has significantly changed its image. Thanks to a clearly defined vision, numerous investment incentives, fast and efficient management, Tivat turned from a small industrial city into a tourist and nautical center of the Mediterranean at the beginning of the 21st century. Only In the last decades, the climate of understanding has been created that tourism is the main pillar of the development of the economy of Montenegro, and therefore Tivat itself. Taking into account the extraordinary geo-strategic position, natural potentials, as well as data on the contribution of tourism in gross domestic product and foreign trade balance, as well as its importance in generating employment and raising the standard of living level for the population, tourism in Tivat is recognized as a priority economic branch.
Today, Tivat represents a desirable place for life and work – by opinion of many. This is clearly indicated in numerous statistics. According to the last census, Tivat is one of the 3 municipalities in Montenegro where birth rate is higher than mortality. Statistical data also indicate a steady increase, as well as a higher percentage of population growth than at the country level. The best ways to indicate Tivat’s development as a tourist destination are quantitative indicators of tourist traffic, which show that tourist arrivals in the comparative period of ten years tripled. For the recall, during 2008, Tivat visited 40 975 tourists, ie 275 495 overnight stays were realised, while in 2018 there were 123 289 arrivals and 926 574 overnight stays.
This way positive trends are followed by representatives of the tourism industry, and today Tivat has four hotels of the highest category – five stars, while in the collective accommodation today there are 1720 beds and 4503 beds in individual.
These data are supported by the fact that our destination is increasingly mentioned in numerous world renowned magazines and in other media, who greatly praise natural beauties and cultural attractions of Tivat and Montenegro as a unique destination. We are witnessing an increasing interest of airline companies toward our destination, as well as increasing numbers of flights connecting us with European metropolises.
Examples of many tourism successful countries show that the destination needs to be branded to make it even more attractive tourist destination. With the already recognizable slogan “Many Worlds Within”, the Municipality of Tivat, together with company Brand New Tivat, is striving to position Tivat as a destination that offers a nice life for its inhabitants, attractions for tourists and a favourable business environment. Successful business environment, which we have created for years, has resulted in the successful implementation of the most important tourism projects in the region, such as Porto Montenegro and Luštica Bay, right here in Tivat.
Thanks to the dynamic reform of the local community, our Tivat, as a successful Montenegrin brand, has created the necessary preconditions for economic prosperity, thus contributing significantly to the overall development and European progress of Montenegro. Tivat is a tourist destination in Montenegro that is fain visited. We worked together on this, thoughtfully and responsibly, concordant in desire for our town to achieve and confirm the leading position in the development of not only the south of Montenegro, but all of Montenegro and beyond. As a outgrowth of these efforts, Tivat is increasingly becoming a modern and beautiful town. Only a precondition has been achieved, and that our successes are upfront the greatest guarantees are people whose knowledge, reputation and successful work represent the best message for the times that are yet to arrive.
By approaching EU membership and joining NATO, we are open up to completely new opportunities for the development of the Municipality. In order to free up the development potential, the Municipality will increase investments in capital projects in the coming years, independently and in partnership with private investors, which will have the effect in creating new jobs, employment and increasing the budget funds.
Permanent improvement of the business environment contributed to the attraction of the Tivat Municipality to large investors who started the realization of investments such as Porto Montenegro (investor Adriatic Marinas), Luštica Bay Resort which Swiss Orascom Development builds, Blue Horizons Investor Qatari Diar from Qatar, etc. The launch of these investments, especially the opening of Porto Montenegro in 2009 as one of the largest marinas in Europe, has contributed to increasing the attractiveness of the municipality of Tivat and Montenegro as a whole as investment and tourist destination.
Investment boom in the municipality of Tivat represents one of the most important flywheel effects in the socio-economic development of this municipality. Investments in Tivat and real sector growth in the last five years have contributed to improvement of the fiscal sustainability of this municipality. Viewed per capita, the current budget income of the Municipality of Tivat rose by a third, so from 540 euros in 2009 it grew to about 720 euros in 2017, which is three times higher than the average current budget revenues per capita of all municipalities in Montenegro in 2014 (which amounted to 260 euros). (Source: Government of Montenegro)
According to the Statistical Business Register (SBR) of Monstat, which represents a reliable source of data on the number and structure of business entities, the number of active economic entities in the municipality of Tivat in 2017 was 1304, which represents an increase of 354 or 37.21% to 2015, and of over 70% compared to 2009. To this fact certainly contributed that in the past period, the Municipality of Tivat has taken significant steps towards improving of business environment.
When speaking about the benefits of the business ambience of the municipality of Tivat, they are reflected in:
– Equal opportunities for investing by both domestic and foreign business entities, as well as open access and cooperation with local businesses in their work towards overcoming business barriers;
– Transparency in the work of the local government with citizens and companies (sms service and web portal, system 48), as well as the inclusion of the Hospitality and Hotels Association in the committee for the preparation and monitoring of the tourist season, as well as in the Organization of the New Year’s event, which is held every year at evermore enviable level and serves as a good example of cooperation between local government and economy in the area of the Municipality of Tivat;
– Mostly the lowest amounts of local administrative fees in the region (submissions, reminders, decisions, certificates, verifications and transcripts, as well as taxes in the field of entrepreneurship)
– Incentives related to the reduction of local municipal fees in the form of reduction of municipal fees of 50% for objects that face public areas and roads, as well as for the music performances, lower prices of LIT (local income tax) for the use of advertisement boards, billboards and other advertisements forms; use of showcases for displaying articles outside the business premises, etc. in relation to the amounts of LIT of municipalities in the region
– Various incentives when paying the fee for utility communal land development for residential, mixed-use and commercial buildings, as follows:
In the case of a one-time payment for the communal land development, the investor is entitled to a reduction of 20% of the calculated value of the fee.
The net area for storage areas and technical rooms within the building, is accounted for 50% of the projected area, unless located in the underground floor
Garages within the building are not included in the calculation of the net area
The net area of the balconies, loggias, verandas, porches and galleries accounts for 50% of the projected area, and the terrace and outer staircases 30% of the projected area.
reduction of utilities bill for the amount of 200 € / m2 of solar collector or panels in facilities that use solar energy systems for DHW heating, space heating and space cooling;
reduction for facilities for production, processing and storage by 70%
reduction for open space on a plot designed for the business activity, by 70%;
reduction for boarding house, motel and hostel by 20%.
The annual membership fee in the Municipality of Tivat is among the lowest in the region. while the surtax on the income tax of natural persons at a sustainable level as in other municipalities of Montenegro and amounts to 13%
Further, when it comes to incentives for business development, as well as investment and funding aspects, it is important to note that the Secretary for Tourism and Entrepreneurship of the Municipality of Tivat provides incentives in agriculture through thirteen different programs and incentive measures for improvement in the aforementioned area. Altogether, there are also financial incentives for women entrepreneurs as a kind of support for quality business ideas for start-ups, but also for business development, with all the technical and administrative support to entrepreneurs from the registration itself, collecting the necessary documentation and entering the legal flows of doing business. The intention is to support quality business ideas and create an open approach of the public and private sector in terms of comprehensive improvement and economic development, as well as creating a favourable business environment.
Thanks to the results achieved till now in the area of improvement of the business environment of Tivat Municipality, the Ministry of Finance and the Chamber of Commerce have it selected as one of the 6 pilot municipalities for obtaining an internationally recognized certificate on a favourable business environment, the so-called BSF SEE certificate. The evaluation process for obtaining this certificate is under way. The BFC SEE certificate is meant for municipalities and cities that have adequate capacities and are strategically resolute in improving their business environment, attracting investments and encouraging the development of local economy.
Another example of support and cooperation of local government with the private sector is the linking of hospitality and agricultural industry through encouraging the promotion and sale of products of domestic agricultural producers in renowned hotels such as the hotel “Regent” (Porto Montenegro) and “The Chedi” (Luštica Bay). A successful mutual cooperation was established, which resulted in the organization and participation at food fairs, whereby the local administration instigates and encourages investment in agricultural industry, as well as a wider recognition and branding of local domestic products.