Government grants in Serbia

1. Government Grants for
investments in Serbia
January 2017

2. In which sectors? In all sectors, EXCEPT:
 Transport
 Software development
 Gambling
 Trade
 Hospitality industry
 Production of synthetic fibres
 Production of coal and steel
 Tobacco industry
 Production of weapons
 Production of ships
 Airports
 Public services
 Energy sector
 Broadband
 All services which can not be
exported

3. Projects that can be subsidized
 Level of possible grants and minimum requirements are based on the group of
municipality of investment location (5 groups)
Minimum requirements for projects:
 From 100.000 EUR of eligible costs and 10 new employees (the 5th group-
devastated municipalities)
 To 500.000 EUR of eligible costs and 50 new employees (the 1st group- the
most developed municipalities)
 For services: 150.000 EUR of eligible costs and 15 new employees
 Agriculture and fish production: 2.000.000 EUR of eligible costs and 25 new
employees
 *eligible costs = total investment in CAPEX and rentals in 3 years (period in
which project must be executed)

4. Government grants
Maximum amount of subsidies:
 from 3.000 EUR per employee (20% of total salary costs in 2 year period after
project execution) plus 10% of eligible costs in the 1st group
 to 7.000 EUR per employee (40% of total salary costs) plus 30% of eligible
costs in the 5th group.

5. Example: Project assumptions
Note: Fill in only green fields
Buyingfactory-
scenario1(inEUR)
Buyingfactory-
scenario2(inEUR)
Rentingfactory-
scenario3(inEUR)
Rentingfactory-
scenario4(inEUR)
1=2+3 Investmentinfixedassets(CAPEX) 8.000.000 8.000.000 4.000.000 4.000.000
2 Investmentinfactory 4.000.000 4.000.000 - -
3 Investmentinequipment 4.000.000 4.000.000 4.000.000 4.000.000
4 Newemployeesinperiodof investmentproject* 100 150 100 150
5 Average netsalaryforone employee monthly 300 300 300 300
6=5x 141% Grosssalary 423 423 423 423
7=6x 118% Total salarycostonmontlylevel 499 499 499 499
8 Prescribedperiodforcalculationof labourcostsinmonths 24 24 24 24
9=4x7x8 Total salariesexpenditure inprojectedperiod 1.197.936 1.796.904 1.197.936 1.796.904
10 Othereligible costs-rentals,finanical lease - - 792.000 792.000
11=1+9+10 Total eligible expenditure 9.197.936 9.796.904 5.989.936 6.588.904
PROJECTASSUMPTIONS

6. Example: Maximum grants
Buyingfactory-
scenario1(inEUR)
Buyingfactory-
scenario2(inEUR)
Rentingfactory-
scenario3(inEUR)
Rentingfactory-
scenario4(inEUR)
12 Grantsbasedonemployees-4000Eurperempl.Butmax25%totalsalarycosts 25% 25% 25% 25%
13=4x4.000EUR Grantsbasedonemployees(4000Eurperoneemployee) 400.000 600.000 400.000 600.000
14=9x25% Grantsbasedonemployees (maximum25%oftotalsalarycosts) 299.484 449.226 299.484 449.226
15=min13:14 Grantsbasedonemployees 299.484 449.226 299.484 449.226
16=(1+10)x15% Grantsbasedoninvestmentinfixedassets(15%x(CAPEX+Othereligiblecosts)) 1.200.000 1.200.000 718.800 718.800
17=15+16 Totalgrants 1.499.484 1.649.226 1.018.284 1.168.026
FUNDSBYRS(onthebasisofnewemployees+investmentinPPE)
NOTE: THIS EXAMPLE IS FOR THE INVESTMENT IN
MUNICIPALITY FROM THE SECOND GROUP. THE INVESTMENT IN
MUNICIPALITY FROM THE FIFTH GROUP HAS MUCH HIGHER
LEVEL OF MAXIMUM GRANTS!!!

7. Requirements for grants
 To apply on the public call from Ministry of Economy with documents
 Detailed investment project structured per Decree requirements with financial projections
 Not to decrease number of new employees in period of 3 years (5 years for large investors)
after project execution (guarantee period)
 To pay salaries on time
 To keep the investment on the same location in period of 3 years (5 years for large investors)
 Maximum level of grants: 60% of total eligible expenditures for middle size investors (50% for
large investors, 70% for small investors)
 Banking guarantee from local bank located in Serbia
 Not being in financial difficulties
 Following planned project execution (which is controlled by external auditor and
Government)

8. Scope of work
I. PREPARATION OF LETTER OF INTENT AND DELIVERING TO THE DEVELOPMENT AGENCY OF
SERBIA
II. STATEMENT ON ACCEPTANCE OF TERMS AND CONDITIONS FOR GRANTING FUNDS
III. DEFINING THE SIZE OF ENTERPRISE – FUNDS BENEFICIARY
IV. BASIC INFORMATION ON THE INVESTOR
V. INFORMATION ON THE FUNDS BENEFICIARY
VI. INFORMATION ON THE INVESTMENT PROJECT
VII. BUSINESS PLAN:
a. PROJECT DESCRIPTION AND INVESTMENT OBJECTIVE
b. ANALYSIS OF DEVELOPMENT POSSIBILITIES AND ABILITIES OF THE INVESTOR (GROUP)
AND THE BENEFICIARY
c. MARKET ANALYSIS AND SALES PLAN RELATED TO THE INVESTMENT
d. RANGE OF PRODUCTION, TECHNOLOGICAL PROCESSES AND INVESTMENT IN TANGIBLE
AND INTANGIBLE ASSETS
e. EMPLYOMENT PLAN AND INVESTMENT IN WORK FORCE
f. LOCATION ANALYSIS
g. PROTECTION MEASURES
h. ЕCONOMIC AND FINANCIAL ANALYSIS
i. FINANCIAL AND MARKET ASSESSMENT OF THE PROJECT (PROJECTIONS OF BALANCE
AND SUCCESS ACCORDING TO THE DEFINED FORMS)
j. SENSITIVITY ANALYSIS AND PROJECT SUSTAINABILITY
k. INFLUENCE OF INCENTIVES ON THE PROJECT REALISATION
VIII. OTHER DOCUMENTS REQUESTED FROM MINISTRY.
IX. FULL SUPPORT IN PERIOD BETWEEN DELIVERY OF PROJECT TO MINISTRY UP TO THEIR FINAL
RESPONSE