Serbia is in the middle of the South East Europe Free Trade Area that provides a duty-free access to a potential market of 55 million people. The local - Serbian market itself is among the largest in the region (7.5 million people). Moreover, Serbian economy grew by 7,6% in 2004 (GDP growth) and is expected to retain high growth rates, which will lead to a significant increase in purchasing power and expansion of the domestic market.

By operating in Serbia, a company can fully benefit from having production outside the EU, while enjoying the possibility of easily accessing EU markets. It is a natural gateway between South East Europe, and Western and Central Europe, and a place where two most important transportation corridors connecting Western Europe and Middle East (Pan-European corridors No. 10 and No. 7) intersect.

Extraordinary human capital at competitive prices

Every year, thousands of young graduates leave universities and colleges in Serbia. Highly educated people, fast learners, receptive to new technologies, familiar with IT, and well versed in foreign languages, represent Serbia’s true capital. On the other hand, Serbia possesses a skilled and productive workforce with a wealth of experience, both in management and manufacturing. A tradition of cooperation with foreign companies and decades of openness towards Western culture and values have left a mark on their skill-set. However, this exceptional human capital is available at very competitive prices. The costs of labor in Serbia are among the lowest in the region and significantly lower than those in the EU member countries.

Favorable tax regime The tax regime in Serbia is the most favorable in the region. Serbia has the lowest corporate profit tax rate in Europe, set at 10%

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 assessed 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.

Fruit Sector

Blessed with fertile soils and favorable climatic conditions, agriculture has always been an important part of the Serbian economy. The total area of agricultural land exceeds 6 million hectares with 85% of ownership belonging to private farms. The total land covered with fruit exceeds 310 thousand hectares.
Serbia has ideal climatic conditions for the growing of fruit. The country’s territory is rich in microclimates that are perfectly suited for organic fruit production making the development of this sector extremely promising. Its soil is still one of the cleanest in Europe, most of the fruit is grown in perfect conditions, hand picked and carefully stored and packaged. Serbian fruit cultivation, which places an emphasis on quality and flavor, contrasts with the large industrialized farms of the West. In fact, most fruit in Serbia is still grown on small, family owned farms.

Serbia’s fruit processing industry is well developed and poised to lead export growth for the country. Currently, the industry exports juices, concentrates, purees, jams, and frozen and dried fruit. Premium juices have always used high quality Serbian fruit as a basic ingredient, and now Serbia’s own premium juice brands are one of the country’s fastest growing exports.

Demand for Serbian fruit is growing steadily, with exports showing an upward trend not just in quantity but also in the number of countries which are becoming importers. In 2004, Serbia exported $163 million in fruit and fruit products. The vast majority of Serbian exports go to the European Union, and as the EU’s health standards become stricter many companies have quickly responded by introducing quality standards such as HACCP.

Investment Opportunities

Investment opportunities in the fruit processing sector are provided primarily by the quality of raw materials that can be used in production. In addition, potential investors have all the necessary support from Serbia’s recognized fruit research institutes as well as a broad base of highly skilled technologists at their disposal. Years of experience in this particular sector, which we can confidently consider to be one of Serbia’s finest, can make a difference when competing in markets throughout the world.
Quality products, made of the finest raw materials are extremely likely to sell well almost anywhere in the world. Since agriculture has always been an important part of Serbia’s economy, there is a large number of fruit processing plants operating in the country. Due to sanctions and underinvestment in recent years, most of the plants work with outdated technology which has not been modernized since the 1980’s. However, Serbia still has qualified labor with valuable experience, fertile soils and quality fruit. Investing in the modernization of Serbia’s fruit processing plants offers foreign investors an opportunity to create substantial cost savings in the industry and recover the cost of their investment quickly.

Investing in Serbia will make it even easier to access some of the most interesting markets in the region. Being in the very centre of the Balkans and having free trade agreements with all of the neighboring countries make it possible to operate and service the entire region from Serbia. Moreover, Serbia is the only country outside of the CIS that has a free trade agreement with Russia. Therefore, operating from Serbia can help make you turn costs into profits when exporting to Russia.
Whether you choose to invest in an existing company or start your own Greenfield investment, you should be sure to grasp all the opportunities that Serbia offers. Apart from your goals, visions, challenges and demands, investing in Serbia is bound to be a fruitful experience.