The use of the name Crna Gora or Black Mountain (Montenegro) began in the 13th century in reference to a highland region in the Serbian province of Zeta. The later medieval state of Zeta maintained its existence until 1496 when Montenegro finally fell under Ottoman rule. Over subsequent centuries, Montenegro managed to maintain a level of autonomy within the Ottoman Empire. From the 16th to 19th centuries, Montenegro was a theocracy ruled by a series of bishop princes; in 1852, it transformed into a secular principality. Montenegro was recognized as an independent sovereign principality at the Congress of Berlin in 1878. After World War I, during which Montenegro fought on the side of the Allies, Montenegro was absorbed by the Kingdom of Serbs, Croats, and Slovenes, which became the Kingdom of Yugoslavia in 1929; at the conclusion of World War II, it became a constituent republic of the Socialist Federal Republic of Yugoslavia. When the latter dissolved in 1992, Montenegro federated with Serbia, creating the Federal Republic of Yugoslavia and, after 2003, shifting to a looser State Union of Serbia and Montenegro. In May 2006, Montenegro invoked its right under the Constitutional Charter of Serbia and Montenegro to hold a referendum on independence from the state union. The vote for severing ties with Serbia barely exceeded 55% - the threshold set by the EU - allowing Montenegro to formally restore its independence on 3 June 2006.
Montenegro's economy is transitioning to a market system. As of 2015, around 90% of Montenegrin state-owned companies have been privatized, including 100% of banking, telecommunications, and oil distribution. Tourism, which accounts for roughly 20% of Montenegro’s GDP, brings in three times as many visitors as Montenegro’s total population every year. Several new luxury tourism complexes are in various stages of development along the coast, and a number are being offered in connection with nearby boating and yachting facilities. In addition to tourism, energy and agriculture are considered two distinct pillars of the economy. Only 20% of Montenegro’s hydropower potential is utilized. Montenegro plans to become a net energy exporter, and the construction of an underwater cable to Italy, which will be completed by 2018, will help meet its goal.Montenegro uses the euro as its domestic currency, though it is not an official member of the euro zone. In January 2007, Montenegro joined the World Bank and IMF, and in December 2011, the WTO. Montenegro began negotiations to join the EU in 2012, having met the conditions set down by the European Council, which called on Montenegro to take steps to fight corruption and organized crime.The government recognizes the need to remove impediments in order to remain competitive and open the economy to foreign investors. The biggest foreign investors in Montenegro are Russia, Italy, Cyprus, Denmark, Hungary and Serbia. Net foreign direct investment in 2016 reached $755 million and investment per capita is one of the highest in Europe.Montenegro is currently planning major overhauls of its road and rail networks, and possible expansions of its air transportation system. In 2014, the Government of Montenegro selected two Chinese companies to construct a 41 km-long section of the country’s highway system. Construction will cost around $1.1 billion. Cheaper borrowing costs have stimulated Montenegro’s growing debt, which currently sits at 65.9% of GDP. Montenegro first instituted a value-added tax (VAT) in April 2003, and introduced differentiated VAT rates of 17% and 7% (for tourism) in January 2006. In May 2013, the Montenegrin Government raised the higher level VAT rate to 19%.