Why Invest in Serbia`s IT Sector?

• Labor costs are considerably lower than in Western Europe . overall labour costs for graduate and skilled staff are approximately 30% of Western levels.
• Excellent skills base is reinforced by good quality universities where many professors have considerable international experience and are highly reputable throughout the world.
• Good communication networks within the country and externally.
• Fluency in English language and educational profile considerably higher than in any other Eastern European country.
• Companies have key knowledge of emerging markets in the Balkans and Eastern markets.
• Businesses have language and localization skills for Eastern European and Russian markets.

The sector of Information Technologies (IT) in Serbia has grown significantly over the past decade. This modern industry, especially the business software services segment, has provided many opportunities for business development and entrepreneurial activity. This is a consequence of successful economic reforms and a deep.rooted commitment to education spanning more than five decades. With its intellectual and technological potential reaching the level of developed countries, Serbia now has the attributes to competitively satisfy the needs of IT companies worldwide.

Given the global spread of the IT sector to developing and transition countries, Serbia has the potential to become one of the top destinations for international companies seeking lower.cost competitive solutions and access to skills. Outstanding intellectual capital, attractive labor costs, excellent  skills, a good communications network and high fluency in English are just some of the key competitive advantages which should persuade international companies to expand their business to Serbia.

The need for investment, both domestic and international, along with the creation of new employment opportunities are major national priorities. Key issues are being addressed through a range of measures such as Serbia.s major privatization program, the adoption of a national SME strategic development plan, the establishment of the Serbian Investment and Export Promotion Agency (SIEPA) and a wide program of legislative, policy and financial sector reform.

The intent of this brochure is not to provide an all.encompassing view of Serbia.s IT sector capabilities (which would require much more space and time). The purpose is to introduce the main facts and successful examples which will give an outlook on how to use Serbia.s IT sector for improving your company.s competitive advantage.

For more specific information about business opportunities, products and services offered by Serbian IT companies, contact SIEPA. We will help you to find the best partners in our region.

Educational Commitment to Technology in Serbia Spans More Than Five Decades. Each year around 1,000 students graduate in Electrical Engineering and Computer Science which represents 7% of total university graduates. Since 1968, students from high.schools specialized in Mathematics, Physics and Informatics have won an impressive number of prizes at World Olympiads (81 medals in Mathematics, 17 in Physics and 14 in Informatics).

In August 2005, students from ETF (School of Electrical Engineering . University of Belgrade) won First Place at the largest international competition for young electrical engineers - .IEEE Int. Future Energy Challenge 2005. at the Illinois Institute of Technology.

Why is Serbia Your Top IT Destination?

There are about 3,000 highly qualified IT engineers currently working on projects for foreign partners, mainly in the field of software product and service development. Total annual revenue in this sub.sector alone is estimated at almost USD 100 million. The IT sector has an annual growth rate of 18.3% and a projected five.year CAGR (Compounded Annual Growth Rate) of 16.8%.

The value of the Serbian IT market in 2003 was estimated at USD 340 million. (Source: IDC ICT Sector Market Analysis and Trends in Serbia and Montenegro, 2003.2008). In addition to major multinationals such as Ericsson and Siemens, which are present in Serbia, a number of smaller European firms have established a presence in the country, both to expand their market reach and to develop products for the region.

Over 100 leading private ICT companies and representatives of Universities and research institutes have established an ICT cluster in Serbia. The goal of the cluster is to increase the competitiveness of Serbia.s ICT industry through mutual cooperation and joint activities of the cluster members.

FinSoft London and TeleTrader, originally from Vienna, both have more than 50 developers in Belgrade . that number swells to a hundred or more during peak production times. On 19th April 2005, Austrian S&T signed an agreement for the takeover of IT banking solutions provider SITO Inc. Information Systems Engineering and Design Company.

In Serbia, there are 1,408 IT companies. The ownership structure of IT companies in Serbia is as follows: 95% are domestic companies, 3% are with mixed ownership and 2% are foreign companies.
The cost of graduate level qualified staff is considerably lower than in Western Europe. Net salary costs vary from 350 EUR to 850 EUR per month for qualified and experienced personnel. The overall salary cost of a programmer / systems expert is in the range 700.1,400 EUR per month.

Many companies have benefited from the sector being different in attitude, commitment and output than in many traditional industries. Their overall costs are considerably lower in Serbia than in most other countries in Western and Eastern Europe.

Serbia offers both new and existing investors a range of incentives aimed at enhancing the country.s competitiveness as an investment location. The corporate profit tax of 10% is the lowest in Europe.