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Why is Serbia an Attractive Country for Foreign Investors?

Updated on Tuesday 26th March 2019

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Why-is-Serbia-an-Attractive-Country-for-Foreign-Investors.jpgAccording 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 favorable 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. Our Serbian company formation agents are at your disposal with assistance and information about how you can set up your company.
 

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. This is the reason why the employment in this field increased by 50% in the last two years.
 

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

 
To simplify the direction of the business and to benefit from all kinds of tax exemptions, 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 labor costs among many others can choose the free trade zones in Serbia.
 
As for the company formation process in Serbia, this can be done within a few days if all the documentation complies with the rules of Companies Act in Serbia and if you ask our specialists in company incorporation for support.
 

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.
 

Investments in 2018 in Serbia

 
The statistics for 2018 revealed a sum of interesting facts in matters of foreign direct investments in Serbia. For example, investors in more than 100 countries were interested in placing their investments in Serbia, transforming the country into a significant investment hub for 2018 in the Balkan region where Montenegro was the first support. Investors from Cyprus were also interested in investments in Serbia in the previous year, and numerous business owners decided to relocate their companies in this part of Europe. Investors from Northern Macedonia, Slovakia, Bosnia and Herzegovina, Bulgaria, Poland, the Czech Republic, and Hungary presented more interest in placing their investments in Serbia compared to previous years. Japanese investors were important players in 2018 in Serbia, with approximately $ 1.3 million registered as foreign direct investments in this country. 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, with a registered growth of 157% for 2018. We invite you to get in touch with our team of company formation representatives in Serbia and solicit in-depth information and complete support if you are interested in opening a company in Serbia. Let our consultants help you establish your company in this country by helping you with the requirements imposed among many others.
 

What is the business direction in Serbia in 2019?

 
Serbia’s development plans continue to gain weight this year, especially when it comes to an important project signed with Turkey for extending the pipeline to the Balkans. Approximately EUR 250 million will be invested on the first highway section that connects Belgrade, the Serbian capital, to Sarajevo, the capital of Bosnia and Herzegovina, with the purpose of strengthening the business relations between the two countries. The first major investor for this vital project comes from Turkey, a country that offered numerous investors in Serbia for the past decades. The healthcare system and water transportation are also on the list of projects for which foreign investments are expected in 2019. Moreover, Chinese investors are very much interested in creating more than 1,000 jobs in Serbia by establishing a plant for making car parts. Even the Swedish investors are looking straightforward to invest in Serbia and create several jobs.
 

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.
 
Any kind of investor appreciates the ways in which the business is made in a foreign country, meaning that the simplified incorporation procedures of a firm in Serbia are vital to entrepreneurs looking for a fast start on the market. The tax structure and the tax exemptions are considered in a large percent by overseas players who would rate concentrate on more investments instead of paying lots of taxes. If you are interested in a business plan and specific strategies that can help your business grow, we invite you to talk to our specialists at any time.
 
If you are a foreigner willing to expand the activities in Serbia through varied investments, please feel free to contact our team of company formation consultants for extra information and support in company formation in Serbia.
 
 
 
 

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Call us now at +381 62 330 664  to set up an appointment with our company formation specialists in Belgrade, Serbia. Alternatively you can incorporate your company without traveling to Serbia.

As a Law Office Ristic & Partners client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Serbia.

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