Serbia - Investment and Sourcing Hub in South East Europe
The quality of Serbia’s
business climate has been reflected in over $13.5bn of FDI since 2001.
Key investment benefits include economic stability, exports
opportunities, low costs, skilled labor, and investment incentives.
Strong export growth underscores country’s booming sales potential
globally.
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Over the past seven years of extensive political and economic reforms, Serbia has grown into a genuine democratic country, with a fast-growing market economy. The Government of Serbia is fully committed to further shaping a highly attractive setting for doing business. The ongoing substantial legislative reforms – repeatedly commended by major international institutions - are implemented in line with the EU legal framework. In addition, Serbia pursues a sound economic policy resulting in strong economic growth, balanced state budget, rapid export expansion, and record high foreign currency reserves.
Massive FDI
Since the onset of economic reforms in 2000, Serbia has grown into one of the premier emerging investment locations in Central and Eastern Europe. To date, FDI inflow in the country has exceeded $13.5bn, while in the past two years alone, Serbia attracted over $9bn of inward foreign direct investment. The list of leading foreign investors is topped by world-class companies and banks, such as Telenor, Philip Morris, Mobilkom, Banca Intesa, InBev, and many others.
Serbia’s strong FDI track-record is substantiated by internationally recognized awards for local Greenfield investors. Between 2004 and 2006, Greenfield projects in Serbia were awarded by OECD as the largest investments of this type in South East Europe.
Embassy Group from Bangalore picked Indjija, Northern Serbia, to build up Europe’s largest IT park, worth $600mn, with 25,000
new jobs
In late 2007, first large-scale Indian investment in Serbia was announced - Embassy Group from Bangalore picked Indjija, Northern Serbia, to build up Europe’s biggest IT Park. The total project value is as many as $600mn, with around 25,000 new jobs to be created over a 5-year period, not only in software development, but also in accompanying services.
Investment Benefits
MNCs in Serbia can largely benefit from the country’s strong economic performance, booming market potential, low overhead costs, highly qualified workforce, and attractive investment incentives.
For years, Serbia has basked in robust GDP growth of app. 7%, and the per capita figure has reached more than US$5,700, or almost four times the amount in 2001. On the fiscal front, the state budget has been balanced, while the monetary reforms have led to $16bn record-high foreign currency reserves and sharply reduced public foreign debt of less than 30% of GDP. Further, Serbia offers tremendous sales opportunities, as a result of customs-free access to the markets of the European Union, Russia, and South East Europe, along with a soaring local market potential. Cost-effective operating in Serbia is ensured through extremely competitive tax rates, as well as labor and utility costs. Corporate tax rates are among the lowest in Europe - corporate profit tax rate stands at merely 10%, VAT is set at 18/8%, while salary tax amounts to 12%. In addition, total labor expenses average below half of the level in EU members from Eastern Europe. On top of this, overheads can be further cut down by taking advantage of a variety of financial and tax incentives. They include state grants ranging between €2,000 and €10,000 for a new job post, a 10-year corporate profit tax holiday, or 1-3-year salary tax and social insurance charges exemptions. The former benefits are garnered with Serbia’s quality labor force boasting high productivity, strong engineering skills, and excellent command of English.
Soaring Exports
Traditionally, doing business with Serbian companies has been based on quality and trust. A long list of blue-chip companies cooperating with local producers features Siemens, Alcatel, General Motors, Opel, Hugo Boss, IKEA, and many others. An increasing number of Serbian companies are introducing international quality standards, such as ISO, CE, or HACCP, to boost their international competitiveness. By illustration, nearly 1,000 local food producers have already adopted HACCP starting from zero only three years ago.
Robust export growth of 32% on average over the past five years underscores country’s booming sales potential globally. Serbia’s strong exports performance is largely due to a surge in trade in food, textile ready-made, and iron and steel products, while local automotive components, pharmaceuticals, and software have also proven to be up to international customer demands.
The quality of Serbian products/services is widely discovered at world’s leading trade fairs. While their audience finds the country’s fruit and vegetable products, software applications, or garments to be truly impressive, Serbian producers are very active in winning new export deals. The latest good news comes from the top global IT fair - CeBIT, Germany, where local companies initiated over 90 relevant contacts signing 8 pre-contracts with future partners worldwide.
The author is State Secretary,
Ministry of Economy & Regional Development, Serbia
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TIBCO 2008 at Bucharest, Romania 18-22 June, 2008
FIEO is participating in TIBCO-2008 scheduled to be held from 18th to 22nd June 2008 at Bucharest, Romania.
Product Profile for the Exhibition:
Section I - Garments, textiles and leather items; gifts and handicrafts; cosmetics and perfumery; jewellery; natural products and alternative therapies; food products and beverages; events and events organizing activities
Section II - Expo Services, Com Image
Section III - Electronics and household appliances, Indoor and outdoor decorations, Plastics, household and sanitary items, Chemical products and items for cleaning and hygiene
Section IV - Sport, tourism, fishing and hunting, Sound, lights, music and video, My Happy Pet, Car Dealers Show
Rental for a constructed booth of 9 sq. mtr is Rs. 45,000/- (without freight) for stakeholders of India Trade Centre, Bucharest and Rs. 50,000/- for other exporters.
MDA grant will be available to eligible companies (for stall charges) subject to maximum of Rs. 80,000/- as per the MDA guidelines
For any further details or clarifications, kindly contact
Mrs. Padma Murthy, Coordinator FIEO (Western Region) at Tel No:022-40572222, Fax: 022-22183875, Email: fieowr@vsnl.com |
