Start to Know Why Set Up Business in Serbia
Serbia is one of the countries in the southern region of Europe, bordering eight other European countries: Kosovo, Macedonia, and Montenegro to the south, Bosnia and Croatia to the west, Hungary to the north, and Romania and Bulgaria to the east. Spanning over 77,474 square kilometres of land, Serbia is currently home to a population of approximately 8.7 million people. You can start to set up business in Serbia because of its economy.
The Overview of Serbia’s Economy
Serbia gained its sovereignty from Turkey and became an independent state in 1878. Serbia’s economy is a service-based upper-middle-income economy. The country’s tertiary sector contributed two-thirds of total gross domestic product (“GDP”) of Serbia. Among the industries, energy, automotive industry, machinery, mining, and agriculture, are the strongest industries that back Serbia’s economic growth. The primary industrial exports consist of automobiles, base metals, furniture, food processing, machinery, chemicals, sugar, tires, clothes, and pharmaceuticals. Trade, at the same time, generates huge revenue for the Serbian economy. Serbia’s main trading partners are Germany, Italy, Russia, China, as well as neighbouring Balkan countries.
Serbian economy is projected to grow steadily. It is with the support from solid private consumption, sustained FDI flows, reduced economic imbalance, and International Monetary Fund (“IMF”)-backed reforms. In 2019, Serbia’s economic growth slowly gained momentum in the third quarter while industrial production recorded recovery from contraction in Q2. Meanwhile, consumer spending is benefitting from the low unemployment rate, good credit conditions and subdued inflation in Serbia. In the period of July-August 2019, merchandise export growth expanded steadily together with moderating imports. In October 2019, IMF highlighted Serbia’s strong fiscal performance in 2019, after completed a review of its non-financial reform program with Serbia.
Why Invest In Serbia
Over the years, the Serbian government has taken steps to improve the political and economic stability of the country. The Serbian government has identified economic reforms comprising macroeconomic stabilization to improve the business climate, to reverse Serbia’s reliance on import and consumption, and to map out strategies of the sustainable economic growth driven by investments and exports. Then, below are the reasons why many investors favour Serbia over other countries in the region:
Serbia’s strategic location has given it an edge in logistic. Strategically located at the crossroads between the West and the East, Serbia has long been an ideal logistic hub that connects markets across the globe.
Free Zones are the designated business zones. They offer preferential customs treatments, tax relief, and simplified administrative procedures to business activities performed within the zones. Then, Free Zones in Serbia do not impose Value Added Tax to the entry of goods, transportation, electricity gas and other services provided to users of Free Zones, as well as supplies of goods and services within the Free Zones. Currently, there are 14 Free Zones operating in Serbia: Subotica, Apatin, Novi Sad, Zrenjanin, Belgrade, Sabac, Smederevo, Svilajnac, Kragujevac, Uzice, Priboj, Krusevac, Pirot and Vranje.
Highly Qualified Workforce
The highly qualified workforce in Serbia in another winning factor that makes Serbia an investment hotspot. Then the labour force in Serbia is highly educated and well trained with adequate skills.
Favourable Tax Regime
One of the key attractions of the Serbian market is the business-friendly tax regime. Corporate profit tax in Serbia is one of the lowest in Europe. While the Value Added Tax is among the most competitive in Central and Eastern Europe.
If you are exploring opportunities to penetrate the Central and Eastern European markets, Serbia has a lot to offer. The attractiveness of the location together with the availability of skilled workforce and supportive government policies are always the reasons that attract foreign investments into the country.