2007. Nebojša Ciric. Investment Climate in Serbia. CEE-Wirtschaftsforum 2007. Forum Velden.

Nebojša Ciric Vizeminister für Wirtschaft und Regionalentwicklung Deputy Minister for Economy and Regional Development, Serbien/Serbia

Ministry of Economy and Regional Development Investment Climate in Serbia Nebojsa Ciric, Assistant Minister Velden, September 19th 2007

Serbia at a Glance  Continuous stability  Market access and market potential  Industrial development, sourcing opportunities  Valuable human capital  Favorable tax and investment regime  FDI track record  Decrees on investment and export promotion incentives 3

Continuous Stability  CEFTA agreement signed 2006; full enforcement planned for September 2007  Partnership for Peace, member state since December 2006  WTO accepted Serbia’s application; working group established in January 2005, accession planned for 2008  EC declared the Feasibility study to be positive; SAA negotiations began in October 2005; candidate status planned for 2008  Completed extended arrangement with the IMF in February 2006: “Growth will remain robust”  S&P Credit rating:  BB-, Stable outlook 4

Macroeconomic environment Robust GDP growth averaging 7.2% over the past three years All-time record foreign currency reserves amounting to $12 billion Decreasing public debt standing at less than 30% of GDP 5

Regulatory Activities  More than 260 laws passed since March 2004  Majority related to economic environment:  Bankruptcy (avg. 7 years -> 1 year)  Business Registration (51 day -> 5 days )  Company Law  A package of tax laws, including VAT  Constitutional changes and privatization of industrial land expected in the near future, as a result of a new Constitution adopted in November 2006. “Serbia is Number One Business Reformer in the World” World Bank, Doing Business62006

Market Access  Serbia is in the center of CEFTA – duty free access to 30 million people market  Autonomous Trade Measures granted by the EU in December 2000, provide for duty free exports to the EU  The only country outside the CIS that has an FTA with Russian Federation - market of 150 mil. people. Limited number of exceptions: complete vehicles, confectionery, some alcoholic beverages  Customs operations have been improved by electronic database, electronic declarations, and imports & exports time drastically shortened (from 44 to 12 days, and for exports from 32 to 11 days, respectively)  Import Duties: 0- 30%, average rate 8.5% (excl. agricultural products 7.5%) 7

Sourcing Opportunities  Decades of cooperation with International companies  JVs, licensing and other partnership forms  Automotive component, textile, electronics, food and beverages, and IT industry leading the way 8

Financial Sector  23 Foreign Banks & 15 Domestic Banks Credit Agricole, Societe Generale, UniCredit Bank, HVB Bank, Hypo Alpe-Adria-Bank, LHB Bank, Alpha Bank, EFG Bank, Erste Bank, Komercijalna Banka, Aik banka, Citi Group…  14 Leasing Companies  17 Insurance companies  4 open-ended investment funds  1,795 companies are listed on the Belgrade Stock exchange  International Financial Institutions eager to co-finance private sector projects: EBRD, IFC, …  Investment and Export Insurance: World Bank/ MIGA, OPIC, Exim Bank, Hermes, Kontrollbank, COFACE, SACE, Serbian Export Credit Agencies – SMECA, AOFI 9

Credits, deposits and borrowing by banks Total savings–around €3 billion or 150 times the amount in 2000 10

Human Capital Number of graduated students from universities in Serbia (1/3 from technical faculties) Excellent base of young, educated, skilled and committed workforce that easily finds employment within multinational companies in Serbia 11

Increasing Labor Productivity “From business standpoint, we’ve been very impressed with the quality of workforce in U. S. Steel Serbia and its sister companies.” Mr. Michael Fedorenko, Former General Manager 12 U. S. Steel Serbia

Favorable Tax Regime 13

Favorable Tax Regime Lowest Individual Income Tax Rates 14

Favorable Investment Regime  Lowest corporate profit tax rate of 10%  10-year tax holiday for large greenfield investments  Tax relief for hiring new workers (2 year salary tax holiday)  Tax credit up to 80% of investment amount for investing in fixed assets  Accelerated depreciation  Import of in-kind equipment is exempt from custom duties (for foreign investors)  Liberalization of property laws (preparation of Law on denationalization/ privatization of urban construction land)  National treatment for foreign investors  Special financial incentives for new investments (2k EUR-10k EUR per new employee) 15

Privatization process - summary 2002-2007 Number of Total Success Number Book Sale Social co’s Number of Rate of Value Purchase Investment Program (000EUR) co’s Price for Sale Employees Sold Tenders Auctions Tenders & Auctions Capital Markets Total 16

Investment opportunities through privatization  75 Companies through Public Tenders  1.036 Companies through Public Auctions  Finalize restructuring processes in 33 Large Systems  Finalize bankruptcy procedure in 450 companies 17

FDI Track Record (in million USD) Best SEE regional track record of Greenfield project realization, 18 as per OECD data

THANK YOU! Ministry of Economy and Regional Development Bulevar kralja Aleksandra 15 11000 Belgrade, Serbia Phone: +381 11 3347-231 Fax: +381 11 3346-770 www.mpriv.sr.gov.yu 19

2007. Nebojša Ciric. Investment Climate in Serbia. CEE-Wirtschaftsforum 2007. Forum Velden.

by Forum Velden on May 23, 2009

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2007. Nebojša Ciric. Investment Climate in Serbia. CEE-Wirtschaftsforum 2007. Forum Velden. — Presentation Transcript