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Is Investing in Emerging Markets Worth the Risk?

bountymounty

bountymounty

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Feb 12, 2017
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#1
I'm thinking about investing a few hundred thousand euros somewhere I can be sure I'll get them back with a profit after some time.

I haven’t figured out exactly how to go about it yet, but before I start researching, I wanted to hear your thoughts on investing in countries like:

Montenegro
North Cyprus
Armenia

In my opinion, it feels like throwing money down the drain, but what do you guys think?
 
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#2
bountymounty said:
I'm thinking about investing a few hundred thousand euros somewhere I can be sure I'll get them back with a profit after some time.
Click to expand...
Nowhere you can be sure.
bountymounty said:
I haven’t figured out exactly how to go about it yet, but before I start researching, I wanted to hear your thoughts on investing in countries like:

Montenegro
North Cyprus
Armenia

In my opinion, it feels like throwing money down the drain, but what do you guys think?
Click to expand...
Probably Montenegro is the best option, as long as they forget about joining the EU. However, investing in the country as a whole would require lots of efforts and local presence, not sure it’s worth it.
 
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#3
bountymounty said:
Montenegro
North Cyprus
Armenia
Click to expand...
Three very different countries.

Montenegro is a bit full of Russiand and Chinese with their passport program. May join the EU. I am personally not too sure that there is a solid ecosystem of companies worth investing into. I have some doubts that many of the passport guys are brilliant people. Also, I am not too sure about the education system enabling a economic success.

North Cyprus is half recognised by Turkey only and heavily influenced by Turkey. I personally would consider it high risk. Also, I do not see much room for real investments as it is lacking the necessary freedom for any enterpreneurial success.

Armenia has a solid base of startups and a government who is willing to adapt their education system to bring more talents to the market. Most Armenian startups are focussing primarily on the bigger US market. In the recent years a good number of Russian IT talents settled in Armenia further boosting the sector.
 
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#4
Montenegro population increased by around 10% thanks to draft dodgers from Russia and Ukraine, these are usually IT talent or business people, young men so it's really a positive for the economy. Prices of real estate went up a lot though. I don't know if it's a good idea to invest there at this point. What type of investment are you referring to, real estate, stock, starting a business ?
 
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#5
Yes, I think the question is what you want to invest in and what about be sure to get it out again. I mean if you want to be sure, you can opt for a time deposit in a bank under the government guarantee. But otherwise, there is always a risk involved.
 
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#8
bountymounty said:
Real Estate and Stock investment may be what I can effort.
Click to expand...
Armenia has only very very few stocks on their exchange. I think you will most likely rather be looking at VC (which is risky). Would you be interested in VC funds as well?

Real estate is rather high in Armenia and Montenegro at the moment due to the large number of Russians that moved there. Not sure how much it will go up futher.

bountymounty said:
Montenegro sounds like something, but no one really believe it to be the next hype ?
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They were selling passports and have now been ordered to stop from the EU. I personally do not believe too much in Montenegro. I am also not too sure about the quality of the people that moved there. I have reasonable ground for serious doubts.

12345 said:
North Cyprus is too risky for me
Click to expand...
I cannot recommend either.
 
#9
daniels27 said:
They were selling passports and have now been ordered to stop from the EU. I personally do not believe too much in Montenegro. I am also not too sure about the quality of the people that moved there. I have reasonable ground for serious doubts.
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Hi can elaborate on this a bit? I was researching Montenegro as well and I am curious about it. It's beautiful holiday destination but the state is not well ran right and its poor country in general
 
#10
12345 said:
Hi can elaborate on this a bit? I was researching Montenegro as well and I am curious about it. It's beautiful holiday destination but the state is not well ran right and its poor country in general
Click to expand...
www.rferl.org

Months After It Renounced Them, Montenegro Still Has Hundreds Of 'Golden Passports' In The Pipeline

Under EU pressure, Podgorica has officially shuttered its contribution to the global buy-a-passport business. But RFE/RL's Balkan Service has learned it's still considering handing out hundreds more "golden passports," which in the past have mostly gone to Russian and Chinese nationals.
www.rferl.org www.rferl.org

To be honest, I am very vary of this program. It mainly attracted Chinese and Russians, and they were not even living there as they bought hotels and airbnbs. (Yes, there are some dudes like Andrew Henderson which I would consider as asset.) But from my point of view any passport program aimed at Chinese may bring some money but a lot of problems later on. If you are Chinese and want to live there, you can do this easily and after very few years, you can become a normal citizen. I know many Chinese in the caribbean who did this and become citizens of the very same countries selling the very same passports. And for the Russians (and all people here on the forum as well) it is the same. If you want to live somewhere, you can get naturalised there easily. Most of the time, people just want the passports for dubious activities like laundering money on fake names etc. This is not something that leads to a good economy.

There are many countries which have many honest Russians running their business from there. It is good for the economy. Armenia is like this. UAE. Even Israel had their IT conomy boost due to the influx of Russians years ago.

Neverthless, Montenegro has beautiful landscape.

While we are at it, what about Georgia, Uzbekistan, Kazakhstan, Mongolia? Anybody investing there?
 
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#11
I just watched a program about Montenegro, and it seems like it's a relatively undiscovered place where the tax rate is a maximum of 15%, and if you stay under 8,000 EUR per month, it's 0%, as I understood it.

Montenegro has also not signed up for CRS, meaning there is no automatic exchange of information with tax authorities.

Real estate is still cheap, although many properties have doubled in price over the last 5 to 7 years.

They are not part of the EU, and one can hope it stays that way. The climate is good, reportedly quite nice, with super-fast internet.

Digital nomads have already found their way there, partly because there's no surveillance, very simple regulations, and it's incredibly cheap to live and eat there. Health insurance is ridiculously cheap! I haven't seen either a hospital or a doctor's office, though.

Many people from Switzerland, Germany, England, and France have already settled there, and many more are on their way. There are also Russians and Ukrainians who have found their way there. It sounds like a completely overlooked piece of land where one might be able to live in peace for the next 10 to 15 years.
 
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#13
EliasIT said:
Many people from Switzerland, Germany, England, and France have already settled there, and many more are on their way. There are also Russians and Ukrainians who have found their way there. It sounds like a completely overlooked piece of land where one might be able to live in peace for the next 10 to 15 years.
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We have many immigrants from all those places and open-minded people do know those places. The Balkan is quite big with a few countries. The waters are always nice, lake, rivers, sea. The mountains are good too.

Croatia was the last member of the EU to be added and the economy literally took off when they joined. Most countries are hoping for that wonder eventually to happen too. Don't get me wrong, but they won't become the next Monaco and Liechtenstein. The countries are too big for that, don't have oil and cannot live on tax heaven income alone. No former refugee from any of those countries would invest in any of those. And they know the country, the people, the language, the education and the economy.

The reason why we like Montenegro is because of the landscape. Yes, it is good. But not that good either. And the reason people talk about it is because of their citizenship program, which they stopped because of EU intervention and their intent to join the EU. Hence, also the reason why people bought their passports, it will eventually be a EU passport.

I personally would say that you can invest in Montenegro:
  • In commercial real estate as the tourism industry probably will still grow.
  • In private real estate as the country's economy will go up once they join EU.
  • In companies, probably not as the education does not bring up enough talent nor does the immigration.
  • In funds, probably not.
 
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#14
daniels27 said:
  • In commercial real estate as the tourism industry probably will still grow.
  • In private real estate as the country's economy will go up once they join EU.
Click to expand...
That would also be sufficient.

Is there any official page about the discussing Montenegro joining the EU ?
 
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#16
I was in Montenegro (mainly Tivat area) in mid 2022 and again this year. A lot of residential and retail development happening around Porto Montenegro and seemed a lot busier this year. Targeting the higher end buyers. Also smaller apartment blocks etc a bit further from the marina. Lower end buyers probably looking at Budva or further down the coast. To me, Budva is a mess and from what I have read, rules on developments there are quite relaxed.

Lustica Bay is also expanding and seems early buyers seeing some nice capital gains. Porto Novi is a mystery to me and whilst I was there in June, so before the July/August summer invasion, the place was empty. Barely anyone walking around. Whereas Porto Montenegro has plenty of people walking around most days and the Regent Hotel had plenty of people coming and going.
 
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#19
JackAlabama said:
add albania to this. if montenegro is under the radar, albania is this 10x.
Click to expand...
Ok. but back to the question. Has anybody invested in any of those markets?

Would you invest in those funds:

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