With 7,5 million people, the Serbian market is among the largest in the region. Serbia is in the middle of the South East Europe Free Trade Zone that provides duty - free access to a market of 55 million people. In addition, Serbia and Montenegro is the only country outside the CIS that enjoys a free trade agreement with the Russian Federation, offering tariff - free access to a market of 150 million people.

The territory of Serbia is divided into two major natural and geographical areas:

- Lowlands of   Vojvodina, on the North, are characterized with mosaic distribution of native vegetation,
Meadow-steppe,  woodland-steppe and sand character. All of them together with wetlands along rivers Danube, Sava, Tisa and Tamis, and marsh terrain between them provide extremely favorable conditions for field crop farming, cattle breeding and growing of fruits and vegetables.

 - Highly-mountainous area, including mainly mountain chains of Balkan, Dinaric and Carpathian region, provides diverse climatic conditions favorable for variety of fruit growing and cattle breeding.

The whole territory of Republic of Serbia consists of 70% of arable land, and 30 % of forests and forest woodlands. Traditional family-owned small farms and private estates prevail, with the average commercial farm occupying 500.700 ha. Family farms consist of small plots and are based mostly on small-scale production, often turned over to commercial use.

Investment Incentives

If you invest in fixed assets

Taxpayers investing in fixed assets are entitled to a tax credit of up to 20% of the value of the investment made in that year. The tax credit is limited to 50% of estimated tax in the year of the investment. The unused portion of the tax credit can be carried forward up to 10 years. Taxpayers classified as small companies are entitled to a tax credit of up to 40% of the value of their investments in fixed assets in the year of investment. In this case, the credit is limited to 70% of assessed tax in the year of the investment. Certain industries, including agriculture, are entitled to receive a tax credit of up to 80% of investments made in purchasing fixed assets with their own financing. The unused portion of any such credit can be carried forward for up to ten years.

If you employ new workers

Taxpayers who employ new workers are entitled to a tax credit equal to their new employees. gross salaries plus related social security contributions paid by the employer.

For your big investments

Taxpayers who invest over CSD 600 million (around 7.4 mill. Euro) in fixed assets and employ at least 100 new workers are not liable for corporate income tax for up to ten years, provided that those assets are used for the activities for which the taxpayer is registered.

Other incentives

- Import of equipment and other assets as well as construction materials representing a foreign entity’s
investment  is exempt from customs duties.
- Import of raw materials, semi-finished and component parts carried out for the purpose of realization of a long-term production contract in cooperation with a foreign producer is exempt from customs and other import duties.
- The liberalization of property laws made it possible for foreigners to own real estate.

Serbian Agriculture Industry

Characterized by rich land resources and favorable climate, agriculture presents a vital sector of the Serbian economy. The importance of agriculture in the Serbian economy is derived from excellent natural conditions for development of primary agricultural and food processing industry.

Great variety of different natural conditions results in a high diversity of agricultural production. Serbian terrain ranges from flat and rich lowlands of Vojvodina in the north, to hilly terrain in the central Serbia and high mountains on east, west and south borders of the country, suitable for cattle breeding and growing of various fruit.

Serbia’s diverse climate has created unique opportunities for primary production of different sorts of vegetables. Climate conditions vary from temperate to continental. It is characterized by cold winters, warm and moist springs yet hot, sunny and dry summers, ensuring good supply of fresh fruit and vegetables.

Agriculture sector accounts for approximately 21% of GDP and 26% of total exports. According to the population Census of 2002, approximately 18% of population in Serbia lives on income received from activities in the agricultural sector. From this category of population 61% works full time in the sector.

Total area of agricultural land in Serbia amounts to 5,115,000 ha in 2004. The share of arable land in total agricultural lands is 85.3%, of which 39% is in the province of Vojvodina.

The agricultural production is based on private owned farms. In the structure of private farms, small private
House holds are dominating. Private farms cultivate approximately 85% of agricultural land, or 80% of arable
land. Only 5.5% of producers from the total number of 778,891 cultivate over 10 ha of land. The main subjects of intensive production are large farms that also represent the basis for large processing capacities.

Vegetable Sector

Structure of the primary production

Serbia’s diverse climate and good land resources have created unique opportunities for the development of primary vegetable production. Vegetables are grown on more than 10% of arable land in Serbia. Vegetable crop production is characterized by small scale production primarily for individual needs. Surplus occurs only in the farms which sell vegetables in the open markets of bigger consumer centres. Vegetable crops for industrial processing and for the mass market are grown on larger areas near large industrial centres.
The largest vegetable production centers are Leskovac, Nis, Aleksinac, Kraljevo, Čačak, Ub, the vicinity of Belgrade and Horgos, as well as some other places in Vojvodina. The total annual production of vegetables adds up to over 2 million tons. Potatoes, along with peppers and green peas, are the most extensively grown vegetables in Serbia. The biggest producers of table potato are located in the central parts of Serbia (Čačak, Guča and Ivanjica) and in Vojvodina. Other crops range from more common fresh vegetables with year round supply like onions, tomatoes, cabbage, carrots and beans to seasonal vegetable crops such as lettuce, leek and spring onion. Other vegetable crops are also widely grown (spinach, carrots, zucchini,
radish, red radish, horseradish, parsley, parsnip and celery). The organic production of vegetable crops in Serbia is in its early stages. Large plough field areas and present capacities for own production of quality seeds and seeding represent bedrock for future increase in volume of organic production in Serbia.
Creation of improved varieties and development of new cultivation methods is undertaken by a very large network of state owned institutes, development organizations and universities. Research is focused mainly on technologically improved vegetable production leading to high quality of seed and vegetable crop production together with the protection of the environment. Research programs are responding to the needs of commercial farms to improve profitability of primary production and food industry.

Vegetable processing industry

The vegetable processing industry, due to the existing capacities, has a significant potential to develop. Annual vegetable production is approximately 2 million tons with important surpluses for processing and exports. The vegetable processing industry in Serbia includes about 25 companies with capacity for production of frozen, canned and dried vegetables. Large companies like Yucom, Frikom, PIK Bečej, Aleva Novi Knezevac and BAG Bačko Gradiste dominate the industry. The major processed vegetable crops in Serbia are potatoes (French fries, potato chips and puree), tomatoes (tomato paste products, tomato juices, ketchup) and pepper (pasteurized, dried paprika and ajvar). Other important processed products include: mushrooms (pasteurized and dried), cucumbers (pickles) and beans.