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Investment in Serbia ‒ Financial Incentives and Beyond

Investment in Serbia may attract many people, and reasons to be active in the field are numerous. We won’t dwell on all reasons guaranteeing the success of your investment in Serbia. You will not discover any factors influencing Serbia investment appeal in the article below. Yet, financial incentives beyond active investment in Serbia are worth discussing.

With the said approach, you can significantly cut your time input and drastically reduce text volumes necessary to achieve the main goal of telling your readers about the financial incentives behind Serbia investment appeal and potential. You are welcome to browse the corresponding section of the International Wealth website for information as to doing business in Serbia. Therein, you will discover useful advice on the subject, together with the full list of services International Wealth offers to our readers and subscribers interested in any kind of investment in Serbia.

Investment in Serbia

Investment in Serbia and target audience of state subsidies

Government support, including, inter alia, financial incentives from the state, is a sure marker the Serbian administration is keen on raising foreign investment. You should clearly understand the national government is selective when choosing the industries to enjoy government support. The situation where either money or significant preferences and discounts are granted to all comers is impossible to imagine and will hardly occur.  

Below, you will find the list of industries where state subsidy programs in the Greenfield and the Brownfield projects are guaranteed to be implemented:

  • manufacturing
  • international or cross-border transnational trade and commerce
  • room selection and hotel accommodation services
  • food production.

Here are the economy branches not eligible for state investment programs (this does not mean investment in Serbia is impossible in any of those):

  • transportation and logistics
  • power industry
  • software development and implementation
  • hospitality sector
  • gambling
  • wholesale and retail trade.

Manufacturers of certain goods may not apply for state support as well, with belonging to a particular industry being the rejection criterion. Please, mind, these companies are still able to make investment in Serbia):

  • synthetic fibers
  • coal
  • steel
  • tobacco and tobacco goods
  • weapons and ammunition
  • shipbuilding (with certain exceptions).

Rules regulating state investment in Serbia

Let’s see how a business may profit from government investment in Serbia, what shall be done therefor, and what the procedure looks like. The funding  or investment provided is non-refundable. It is granted not to the company per se, but in exchange for every newly created job. The job in question shall be created within 3 years since the application submission date, with up to 5 years potential extension of the above period.

Funding rationale (to be selected by the investor themselves) may look as follows:

  • legitimate costs of tangible or intangible asset investment
  • legitimate costs of employee wages and salaries (2-year gross salaries, for newly created jobs only), with maximum remuneration amount of EUR 3,000 to EUR 7,000.

Below, you will find the list of factors to account for when calculating your investment in Serbia, with state subsidies in mind:

  • Legitimate costs of intangible asset investment depend on your company size. They make up to 50% of the total legitimate costs for large enterprises and up to 100% for SMEs.
  • Should the investor decide to cover legitimate salary costs with the funds received from the government, they may enjoy an extra 10% to 30% of the legitimate cost amount for intangible assets.
  • 10% to 20% of the legitimate cost amount for salary payments may be provided for newly created jobs in labor-intensive projects (with at least 200 newly created jobs) for 2 years), with the exact amount depending on the vacancy number.

Investment in Serbia and incentive amounts 

Financial incentives in exchange for investment oftentimes happen to be nominal. On a positive note, substantial incentives may be granted with investment in Serbia. Mind that the said amounts are significant enough (with maximum amounts received by investors), and it turns Serbia into a highly appealing European investment jurisdiction.

The most important things to remember about investment in Serbia are listed below (with maximum incentive amounts investors may receive):

  • Beneficiary is a large enterprise. A large enterprise may obtain up to 50% of legitimate investment costs from the state.
  • Beneficiary is a SME. A SME may get 60% to 70% of legitimate investment costs from the state (for medium and small enterprises, accordingly).
  • Investment in Serbia of EUR 50,000,000 to EUR 100,000,000. State incentives may reach up to 25% of legitimate investment costs for amounts above EUR 50,000,000.
  • Investment in Serbia above EUR 100,000,000. The state may grant up to 17% of legitimate investment costs to investors for amounts above EUR 100,000,000.

Take a look at conditions and qualifications for strategically significant investment in Serbia:

  • major impact on the Serbian economy development, and global competitiveness thereof
  • amount of investment in Serbia exceeding EUR 2,000,000 (within 3 years)
  • creation and preservation of 100 new jobs in certain regions (devastated regions and group III or IV regions) within 5 years, or EUR 5,000,000 and 500 new jobs for group I and II regions
  • promotion of joint development priorities for a municipality (or several municipalities) to increase the competitiveness thereof
  • investment in Serbia resulting from any bilateral contracts or cross-border cooperation agreements.

Recommendations and conclusions

Investment in Serbia is for investors who are after the whole benefit package and not leadership based on individual criteria. At present, the country poses no risk for long-term investment  ‒ much water has flown under the bridges since the armed confrontation back in the 1990s, and nothing reminds of these tragic events today.

What procedures should one follow to make an investment in Serbia? In the above digest, we didn’t give any recommendations on the subject, as it would make the article tougher to stomach and unsuitable for your first encounter with Serbia. The International Wealth team suggests you read the already available articles on Serbia first (please, follow the link in the preamble hereto).

Below, you will find some useful International Wealth services associated with Serbia:

Investment in Serbia real estate ‒ take a look at popular offers from the International Wealth partners:

For any questions or comments, please, contact the International Wealth consultants at [email protected] or via any other communication channel you find convenient.

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