FDI statistics in Montenegro

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FDI statistics in Montenegro new presentation
of data Mira Radunovic Head of Balance of
Payments Division
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LEGAL FRAMEWORK

• Law on Central bank of Montenegro (Official
  Gazette of Montenegro, no 40/10, 46/10, 6/13)
• Law on Official Statistics and Statistical System
  (Official Gazette of Montenegro, no 18/12)
• Law on Current and Capital Operations with Abroad
  (Official Gazette of the Republic of
  Montenegro, no. 45/05, and Official Gazette of
  Montenegro, no 62/08, 40/11)
• Decision on statistical data to be submitted to
  the Central bank of Montenegro for the purpose of
  compiling the Balance of payments of Montenegro
  (Official Gazette of Montenegro, no 61/12)
• Decision on keeping separate records on foreign
  current and capital transactions and their
  reporting to the Central bank of Montenegro
  (Official Gazette of Montenegro no 38/10)
• Decision on the amount of cash that may be
  brought into or leave Montenegro without
  declaring (Official Gazette of Montenegro no
  38/10).

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FDI in Montenegro

• FDI is an important issue in Montenegro
• Inward FDI are more important than outward.
• 10 ownership rule is applied according to
  BPM5/BPM6 and BD4 methodology
• ITRS - primary data source for the compilation of
  FDI

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Chart Net FDI flows in Montenegro
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FDIs as drivers of economic growth, but also
as the factor of the trade and current account
deficit
Chart FDI vs import of goods
Chart FDI vs CA and trade deficit
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Foreign Direct Investment- flows

• The Central bank compiles FDI statistics -flows
  using information from ITRS.
• Separate ITRS codes for transactions in direct
  investments by residents abroad and non-residents
  in MNE (equity and debt).
• FDI comprises not only the initial transaction
  establishing the relationship between the
  investor and the enterprise, but also all
  subsequent transactions between them and among
  affiliated enterprises.
• Intercompany debt transactions between affiliated
  enterprises are recorded as a direct investment
  other capital.
• Reports on transactions in cash from the Custom
  office.
• The data are cross-checked by using information
  from various sources as enterprises, media, etc.

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Foreign Direct Investment- flows (cont.)

• In accordance to BPM6 and BD4 FDI data
• Includes intercompany lending, except between
  financial institutions (the data could be
  provided for stock)
• Covers fellow enterprises.

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Foreign Direct Investment- stock data

• In 2010 CBM launched direct reporting system by
  companies for FDI stock data - both inwards and
  outwards.
• All legal entities with foreign capital and legal
  entities owning a company abroad are obligated to
  submit reports to the CBM about the stock and
  changes in capital annually
• Geographical breakdown is available.
• Included data on reinvested earnings.
• Also available data on transactions between
  fellow enterprises (mainly intercompany debt).

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New presentation of FDI dataASSETS/LIABILITIES
PRINCIPLE
    FDI ASSETS     FDI LIABILITIES
    Investment by MNE direct investors in DIE abroad     Investment by foreign investors in DIE in MNE
  Reverse investment by DIE in MNE in their direct investors abroad     Reverse investment by DIE abroad in their direct investors in MNE
  Investment by fellow enterprises in MNE in other fellow enterprises abroad   Investment by fellow enterprises abroad in fellow enterprises in MNE
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Plans for future

• To improve questionaires for inward and outward
  FDI
• Include questions regarding flows and DI
  relationship
• Reverse investments
• Create a new reporting system based on
  electronically submission of data
• To include data on RIE in BOP

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Thank you for attention!