KEY REASONS TO INVEST IN SERBIA

1. BOOMING MARKET POTENTIAL

Externally, Serbia can serve as a base for duty-free exports to a market of 1 billion people encompassing:  
• The European Union,
• The United States of America,
• Russia,
• South East Europe, and
• Belarus.
This customs -free regime covers most key industrial products, with only a few exceptions and annual quotas for a limited number of goods. Internally, with 7.5 million people, the Serbian market is the 2nd largest in South East Europe. The average net monthly salary rose from €91 in 2001 to €402 in 2008. Coupled with rapid consumer loan expansion, this fueled a sharp increase in local demand, which was reflected in a double‑digit growth of retail trade turnover on an annual basis.

2. LOW OWERHEAD COSTS

One of the key advantages of doing business in Serbia, compared to the majority of other CEE countries, are lower operating costs.
Serbia’s tax system is highly conducive to investment, featuring the following benefits: 
• One of Europe’s lowest corporate
profit tax rates set at 10%;
• Value Added Tax of 18%–among the
most competitive in Central and Eastern
Europe;
• A 10-year corporate profit tax holiday
for investments of over €7 million
that generate at least 100 new jobs;
 • Tax credits for investing in
fixed assets of up to 80% of
the invested amount;
• Salary tax and social insurance
charges exemptions
for employees under 30 and
above 45 years of age.
Labor costs in Serbia are comparable to those in South East European countries, while standing at 50% of their level in Eastern European EU member states. In addition, low utility costs help businesses achieve high profit margins.
 

3. ATTRACTIVE INVESTMENT INCENTIVES

Highly competitive and diverse nvestment incentives are designed to reduce the costs
of investment projects in Serbia.
For large investors in the automotive, electronics, and IT industries, a special financial package is available.
If a project’s value exceeds €200 million, with the minimum of 1,000 new jobs created, the state may cover up to 25% of the investment.
For smaller-scale Greenfield and Brownfield projects in the manufacturing, services, and R&D sectors, non-refundable funds are offered, ranging between €2,000 and €10,000 for each new job created.
This incentive scheme has already benefited world-class companies such as Henkel, Kronospan, Gorenje, and Pompea. In three years, about €34 million has been approved in the form of state grants. As a result, more than 80 new investment projects, worth as much as €500 million, have been implemented, bringing over 15,000 job posts across Serbia. The FDI-related financial frameworks will be continuously upgraded in order to offer the even more business- friendly incentives.

4. QUALITY HUMAN RESOURCES

Serbia’s labor force combines exceptional work efficiency with sizeable labor supply. With a unique combination of highquality and low costs, it is one of the key factors in reaching
a strong business performance.
The quality of the local labor force is best reflected in robust industrial productivity, rising at an 11% rate over thepast five years. The population of university graduates grows by more than 15% annually, averaging over 16,500 each year. Technical education is particularly strong–high school students are among the best performers at world contests in natural sciences, while Serbian engineers are well-known for their expertise. In addition, Serbia boasts the highest English speaking proficiency in Eastern Europe. Management education has also been improved by the introduction of joint graduate and post-graduate courses organized by local universities and renowned Western business schools. Essentially, Serbia offers a wide availability of highly qualified staff. The number of engineers and managers is sufficientto meet the growing demand of international companies.

5. STRATEGIC GEOGRAPHIC LOCATION

As a logistics base, Serbia is the perfect location for a company to efficiently serve its EU, SEE
or Middle Eastern customers. It borders the EU at the Hungarian, Bulgarian, and Romanian state lines, while offering the benefits of  working outside the EU. Furthermore, owing to its position on the geographic borderline between the East and West, Serbia is often referred to as a gateway of Europe. Two important European corridors, No 7 – River Danube and No 10 – the international highway and railroad, intersect on Serbian territory, providing excellent transportation connections with Western Europe and the Middle East. By using well developed road connections, a shipment from Serbia can reach even remotest parts of Europe in less than 72 hours. The transport of goods via railroads is highly cost effective and through the Pan European Corridors No 10 and No 7, Serbia offers access to all European destinations. In summary, Serbia boasts the potential to grow into a logistics hub of South East Europe. In order to further upgrade the country’s road and railway networks, the Serbian Government will invest roughly €4 billion in their modernization over the coming years.

6. REFORMING BUSINESS START-UP

 The business registration procedure in Serbia currently takes a maximum of 5 days, down from previous 23. As of May 2009, the entire process could be completed in at the Business Registration Agency, which acts as a full-fledged one-stop-shop. Company types in Serbia are similar to those in developed economies. One can incorporate a business as a Joint Stock Company, Limited Liability Company, General Partnership or Limited Partnership. The minimum capital required is as low as €10,000 or €25,000 for a Joint Stock Company, and €500 for a Limited Liability Company. The entire business registration process is simplified and tailored
to meet the requirements of the type of a company one wishes to establish. Transparency and low registration costs add to the efficient institutional and legal frameworks for business registration. Business start-up is further encouraged by ongoing regulatory reforms. The most essential one includes the future law in the urban planning and construction area, which will be fully harmonized with the EU legislation in order to speed up construction procedures.

For more informations about investment climate in Serbia please visit web site of Serbian Investment and Export Promotion Agency (SIEPA).