INVESTMENTS INCENTIVES IN SERBIA

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Investing in Serbia Hosted by Jetro, Vienna 4th
March , 2003 Ms. Gordana Lazarevic Assistant
Minister Ministry of International Economic
Relations Gracanicka 8, 11000 Belgrade,
Serbia E-mail office_at_mier.sr.gov.yu
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Real GDP Growth
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Inflation Disappearing
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GROWTH DRIVERS
Economic liberalisation
Accelerated privatisation
Deregulation and improving competition
Increase in foreign investment Decrease in
country risk
The Bottom Line High growth potential
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The Foundation for Investment
Reform Progress
Deregulation
LEVEL PLAYING FIELD
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Improved Economic Legal Framework

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Laws to be adopted
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Deregulation
ALREDY IN PLACE
FUTURE IMPROVEMENT
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Fiscal and Budget System

• 6 main taxes and few fiscal forms

• One excise tax

• One sales tax

• One tax rate, almost no exemptions

Introduction of VAT from 1/1/2004

• Unified and consolidated budget

• Unified financial audit

• Introduction of IAS
• accounting standards for
• banks (2003) and
• enterprises (2004)

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Sound Financial Sector

• Paris / London Club
• Paris Club wrote off 66 of FRYs 4.5 billion
  debt in November 2001. 51 was written off and
  15 more will be written off after 3 years of
  successful implementation of the IMF program
• Foreign banks
• Raiffeisen Bank
• HVB Bank
• National Bank of Greece
• Microfinance Bank
• Reform of Banking System
• 23 domestic troubled banks closed including the
  4 largest
• Financial legislation reform Payment operations
  transferred to banks
• Securities Market Act
  adopted
• Investment Fund Law to be
  adopted

• Alpha Bank
• Société Générale
• Hypo Alpe Adria Bank

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Tax Incentives

• Tax credit of 20 of investments in fixed assets
  in a given year, and up to 50 of total tax (for
  SMEs 40 and up to 70 of total tax)

• Tax credit of 100 of total gross wages fund of
  newly employed persons during 2 years

• A 10 year tax holiday for sizeable investments
  (10 million and 100 employed)

• A 5 year tax holiday for investments in regions
  of special interest (100,000 and 5 employed)

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Lowest Income Taxes in the Region
Income tax (companies)
Income tax (individuals)
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Opportunities for Investment

• IT Electronic Sector
• Chemical Industry
• Pharmaceutical Industry
• Automotive assembly and components Industry
• Textile Industry
• Agribusiness
• Timber Industry

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Labour Market

• Highly skilled educated labour
• Relatively low wages (average salary EUR 150)
• English and German widely spoken
• Business people have experience with foreign
  markets

     

     
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Trade Liberalization
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Revitalization of Infrastructure

• Belgrade Airport Regional Hub
• Nis Airport
• Air Traffic Control
• Danube River Project
• Power System Reconstruction
• Highway Rehabilitation and Construction

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Regional Cooperation
UNIFICATION OF CUSTOM PROCEDURES HIGHER MOBILITY
OF GOODS, SERVICES AND CAPITAL LOWER COSTS FOR
BUSINEUSINESS
ROMANIA
- OIL PIPELINE / KONTANZA-PANCEVO
- TRANSPORT PROJECTS DANUBE, ROAD AND RAIL
INFRASTRUCTURE
- MODERNIZATION OF HYDRO ELECTRIC PLANT DJERDAP
SERBIA
EUROREGION DANUBE 21
- ROAD INFRASTRUCTURE
BULGARIA
- RAIL INFRASTRUCTURE
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For more information on foreign investment
opportunities in the Republic of Serbia please
visit the following 1. Regulation The
Ministry of International Economic Relations
www.mier.sr.gov.yu 2. Investment Export
Promotion SIEPA www.siepa.sr.gov.yu 3.
Privatization The Ministry of
Economy and Privatization
www.mpriv.sr.gov.yu 4. Banking activities
The National Bank of Serbia
www.nbj.yu