Abstract: Over the past few decades international flow of capital has contributed to the globalisation phenomena. Some countries took advantage of this, managing to develop their economies and to improve the standard of living of their citizens by attracting foreign investments. Others were not so successful. Countries of the South-Eastern Europe, hit by Balkan wars and economic sanctions, were late to be included in the first wave of international capital flow. But now, when the whole region tries to join the accession process to the European Union, foreign investments are more important then ever. This paper examines one such country Montenegro, which suffered for almost two decades, isolated by economic sanctions and hit by the consequences of the Balkan wars. Montenegro is a part of the State Union of Serbia and Montenegro and it undertook extensive economic and social changes in order to fulfil the conditions for accession into the European Union. This paper presents general information for foreign investors interested in this part of Europe and describes specific benefits and risks that they may face during the process. There are many possibilities that can be exploited by educated investors not afraid to invest their capital in Montenegro.