Advantages and regulations

Why is Serbia an Attractive Country for Foreign Investors 

According to the World Investment Reports for 2016 and 2017, Serbia is mentioned as one of the few countries from the South-Eastern part of Europe where foreign direct investments and companies from abroad found the proper place for development and stability. Also, the World Bank Report revealed that Serbia improved the business climate in the past few years and worked on the conditions related to fast incorporation and a favourable tax regime for foreign investors. Considering the confidence and the stability of the economy, Serbia welcomes investors worldwide to operate in the country’s main industries.

• The manufacturing sector in Serbia is strong and consistent

Boosting the business-friendly incorporation procedures in Serbia represented the proper starting point to attract foreign investments. The manufacturing sector made no exception, as the authorities sustain this important sector and the multitude of projects involved. Equipment, machinery, food & beverages, tobacco, textiles, petroleum products, wood, and plastics are part of the flourishing manufacturing sector in which most FDIs directed from abroad.

• Competitive tax rates in Serbia

Because most entrepreneurs from overseas consider the tax regime in the chosen country for business, the Serbian government focused on creating a welcoming structure in this sense. For instance, the corporate profit tax is set at 15%, the tax on dividends, royalties, capital gains, and interests is a rate of 20%, the VAT has the same rate of 20% but lower in certain fields, and the withholding tax is set at 20%. Compared to other European countries, Serbia offers low taxes in the business field.

• Free zones in Serbia

Serbia created the free zones and related industrial parks. Novi Sad, Pirot, Zrenjanin, Vranje, Belgrade or Krusevac are only a few of Serbia’s free zones with well-developed infrastructures and the possibility of benefiting from 0% VAT for import and export goods from and in these areas if 50% of the goods are made with domestic components. Multinational companies interested in operating with low labour costs among many others can choose the free trade zones in Serbia.

• Serbia has an excellent geographic position

In many cases, Serbia is seen as a gateway to Europe, due to its strategic geolocation which sustains businesses from abroad. In this sense, Serbia is the link between the Eastern and the Western part of the old continent. The well-developed infrastructure allows foreigners to have great connections with Russia, Germany, Austria, Benelux, UK, France, Spain, Italy and many more. The air, water, and land transportation sustain a good way of doing business in Serbia.

As for the political stability of Serbia, foreigners do appreciate a relaxed climate and a government that sustains the foreign investments by offering varied incentives, a proper administration, and a trustworthy fiscal background.

• Key facts to consider when making investments in Serbia

Knowing the business destination for investments in Serbia will help an entrepreneur decide fast on the sector in which he or she wants to place the money. Here are a few facts to consider about Serbia before making investments:

• Companies can be easily incorporated in Serbia as there are fewer formalities involved.

• The taxation regime in Serbia is among the lowest in Europe.

• An investor can easily establish a subsidiary or a branch in Serbia.

• The manufacturing sector in Serbia is preferred by numerous international investors.

• The Serbian economy met significant developments and a positive direction.

• Serbia is an important business hub which allows foreigners to place their investments in varied sectors.

• There are several tax incentives for investors from abroad willing to open companies in Serbia.

• Vranje, Novi Sad, and Pirot are important free trade zones with an excellent infrastructure and a series of tax advantages.

• In terms of business costs, large companies from abroad can establish branches and subsidiaries in Serbia’s free trade zones.

• There is no VAT imposed on imported and exported goods in Serbia’s free trade zones.

• Serbia connects the Eastern and the Western parts of Europe, thanks to its strategic location.

• Serbia welcomes foreign investments from countries like China, Hungary, Turkey, France, UK, Spain, Japan, Germany and many more.

Most of the investments in 2019 were placed in major sectors like transport, electronic industries, chemicals, plastics, and textiles. The positive direction of Serbia’s economy was noticed by international players who were attracted by the numerous business opportunities in this country in recent years. We invite you to get in touch with our team of company and solicit in-depth information and complete support if you are willing to expand the activities in Serbia through varied investments.

• Provisions of the Foreign Investment Law in Serbia

The Serbian Investment Act was enforced in 2015 to help foreign entrepreneurs understand better the rules and regulations of the business environment. The foreign investments in Serbia can be placed by forming a company or buying shares in an already established business. Both ways involve nationals and foreigners interested in investments in Serbia. One should know that such investments are made through legal contracts in respect to the local legislation.

• Laws governing the business in Serbia

Companies in Serbia must follow varied rules and regulations applicable in this country. The Law on Energy, The Law on Customs, the Law on Foreign Exchange Operations, the Law on Public-Private Partnership and Concessions, the Law on Insurance, the Law on Capital Markets and the Law on Procedure of Registration before Business Registers Agency must be observed by both domestic and international investors in Serbia. It is important to have an idea about the business environment and general rules for starting a company in Serbia and skip any possible misunderstandings that might occur.