Why aren't Montenegro and Kosovo tax heavens?
Posted by Happy-Hour88@reddit | AskBalkans | View on Reddit | 19 comments
They're small, currently mismanaged and poor but many small states are wealthy. Slovenia is only sligtly larger than Montenegro but is well-developed and the wealthiest Slavic/Ex commie European country.
I know Kosovo is a disputed country but Montenegro isn't, so why are they still poor? Can't they lower corporate tax or something and open casinos for the wealthy Albanians and Bosnians to visit?
Nince1107@reddit
I wouldn’t put Kosovo and Montenegro in the same boat.
Fred_Neecheh@reddit
Rule of law mate. Same reason why Russian oligarchs, including those close to Putin, would choose the UK to park their money and also to live, before 2022. Because cast-iron protection for those monies, provided no one investigates and proves they are ill gotten. Which, once you have gotten to that level, you have cleaned several times over.
Meanwhile, smaler countries might be more accepting. But also more likely to simply confiscate it, if you arent paying dues to the local mafioso.
That said, MNE tried it, and you do have some cases, eg Thanksin Shinawatra is a citizen of Montenegro, look him up.
J0hnnyBlazer@reddit
ye bosna too, also these shit countries needs to legalize weed, cocaine and turn down the speaker at the mosques 🕌 to like 15db because it’s not fair I sit smoke a joint and some imam starts crying into my ears.
If they did these things I will consider start visiting again
J0hnnyBlazer@reddit
Compare that to Thailand, fukkin paradise where you have weed coffee shops at every corner, I flew from bangkok to Koh phangan with 50 gram weed. Now compare that to bosna, kosovo where they bitch and crying for fukkin everything and dont even have beaches, why the fukk would i go there
Adorable-Ad-1180@reddit
Montenegro at least has drugs and beachs.
swollen_messiah@reddit
And bitches
After-Chicken-6693@reddit
Not a lot of people know this but actually at one point Montenegro was a tax heaven before 2000. However few people that came here to use those benefits were asked to pay contributions by ruling party at the time. They did not want to pay and they were escorted out of country, and than law changed following year.
Visible-Climate-6920@reddit
Cuz “polako, brate, sutra ujutru”
Unitedpossibles@reddit
Well you said it already. From the perspective of Montenegro, it’s very corrupt + protectionist, a very bad combo. What this means is that you have all these very badly run industries that have no reason to add value because internal competition is restricted. There’s a huge import tax on everything. Why do you think that even when you fly into the airport there, they have the most strict customs out of all the 80 + countries I’ve been to. They are looking for people bringing in products without paying the tax. And they don’t mess around. An interesting insight into the mindset here. Very few people trust getting returns over time, they want money now. Maybe this is because of the war history and people thinking, who knows what’s going to happen. But the result is this mindset of money now. This also translates into how leaders operate. They cannot, or don’t want to wait for returns over time. They all want to take benefits now. A tax haven approach requires forward thinking and an investment mindset. Montenegro essentially produces nothing and is selling away its assets (land) for money now. This is the only reason it’s doing well now. But it’s a small country. It will run out. I mean look at budva. The mismanagement of this city has ruined this once iconic place. It’s unreal how bad Montenegrins are at managing their own country. Zero thought, only dollar signs.
Geomambaman@reddit
This post reads as if Slovenia is tax haven, which is amusing since its one of the countries with the highest income tax in the world.
Several-Zombies6547@reddit
European countries like Ireland, Cyprus and Malta have become attractive tax havens for foreign businesses because they are part of the EU, so they can operate in Europe more efficiently.
ZonzoDue@reddit
The comparison with Slovenia is unfair : Slovenia has been for most of its history part (and well integrated) of the Holy Roman Empire and then the Austro-Hungarian Empire. And a very strategic part of it I might add. They have always been richer, more industrialized and with better institutions than its Southern neighbors which were part of the outer parts of the Ottoman empire.
Plus, Slovenia had a few perks of its own : no actual war on its soil in the 90's that have them a head start, neighbor to industrially rich Italy and Austria and on a sweet place logistically.
Ok_Eagle_3079@reddit
Because people in Montenegro and Kosovo prefer to live in tax hells
TsarKikso@reddit
Because they aren't EU members and also because such places already exist in Europe that are well established. If you are rich would you go to Kosovo\Montenegro or to Monaco that has no income tax, even corporations would rather go to the Netherlands or Luxembourg with its low business tax. When they become EU members they could set their taxes to be lower so they could become tax heavens.
BardhyliX@reddit
Casinos are illegal in Kosovo, the ones that exist here do illegally, and quite often are destroyed by police operations and then rebuilt.
Usually they're close to the border with Serbia where it's a "grey" area where the police has to take alternative roads to even be allowed to go up there as it's a KFOR patrol zone.
azuratios@reddit
Both Malta and Cyprus became "tax havens" after joining the EU. They are not tax havens actually, their goverments deliberately followed policies that attracted diversified foreign investments and phantom investments.
Malta made itself very desirable for businesses struggling in other EU countries and UK businesses fleeing post-brexit. Cyprus initially "sold" EU citizenship by attracting foreign capital - buyers had to deposit 2m Euro in Cypriot banks or buy property of 500k and keep it or risk their citizenship being revoked. Once these strategies "go off" and the country proves itself reliable for the initial investments low corporate taxes & other business-friendly laws attract regural investors.
Pretty much every other country in Europe with similar status - Andorra, Monaco, Luxembourg etc - has a historical reason that led them to become "tax havens."
Montenegro and Kosovo neither have these historical cirmustances nor the ability to follow these policies without access to the markets of other large economies. They do use the euro and while I guess a reliable currency is one of the most important factors for these strategies, as far as I know the EU has been very critical of their adoption of the euro which de facto makes it less reliable for foreign investors.
So, I think the answer to your question is that they yet don't have the capability to make their countries rich in that way but they may do it in the future. The comparison with Slovenia is very wrong - it is not a country that became richer by foreign capital & such policies.
TheEagle74m@reddit
Because government runs on taxing people, so 🤷🏻
lelebato@reddit
Lol it’s not like any country around them has a shortage of casinos or a lot of wealthy people.
Slovenia had a better start than any ex-Yu country due to being neighbours with some of the richest western countries and having a relatively developed industry. And they were also smarter than all of us and invested heavily into good things.
I don’t think Montenegro or Kosovo can do that, it’s just not possible. Especially Kosovo which is much poorer right now than Montenegro and in a very weird political situation.
Montenegro can change itself if they can get into EU, but they are also heavily dependent on tourism (without much infrastructure to support and justify their prices), so they will have to rethink basically everything in their system
And becoming a tax heaven isn’t something you can easily do in their situation
shqiptarski1444@reddit
Not enough wealthy Albanians and Bosnians 😆 more likely rich Arabs would be the ones visiting those casinos