Wednesday, May 6, 2009

Five Reasons to invest in Serbia

There are many reasons for a wise investor to start looking towards Serbia for a new and secure investment opportunities. According to the Serbia Investment and Export Promotion Agency there are five major reasons to invest in Serbia: Investment Incentives, Quality Human Resources, Strategic Geographic Location, Low Operating Costs, and many opportunities to Locate Your Business.
There are two types of Investment incentives given by the state to the new investors: Financial Incentives in manufacturing and production: from €2,000 up to €5,000 of state grants per new job created; in services : from €2,000 up to €10,000 of state grants per new job created; in R&D from €5,000 up to €10,000 of state grants per new job created; and Tax incentives: A 10-year corporate profit tax holiday for investment over €7.5 million and 100 new employees; Corporate profit tax credits up to 80% of the fixed assets investment; Carrying forward of losses over a period up to 10 years; Accelerated depreciation of fixed assets; A 5-year corporate profit tax holiday for concessions; Salary tax base deduction in the fixed amount of €60 a month; Salary tax exemptions for employees under 30 and over 45 years; Annual income tax deductions up to 50% of the taxable income; Social insurance contributions exemptions for employees under 30 and over 45 years; and Customs-free imports of equipment based on foreign investment.
Quality Human Resources or skilled and productive labor force has proven to be one of Serbia’s major competitive advantages in the global investment market. With a unique combination of high-quality and low-cost skill-set, it is widely regarded as a strong business performance driver. Unlike most transition countries in Central and Eastern Europe, Serbia fostered extensive relationships with Western economies for decades. A list of blue-chip companies maintaining strong ties with local partners is lead by Siemens, Alcatel, General Motors, FIAT, IKEA and many others. Throughout years of cooperation Serbian workers have received specific know-how and adopted advanced technology applications and rigorous quality control standards. Having vast experience in both manufacturing and management, local staff requires minimum training to adopt cutting-edge technologies and assembly processes. The skill level of local labor force is reflected in high industrial productivity increasing at 11.4% over the past five years. The quality of Serbia’s intellectual capital is based on its educational system generating well educated, fast-learning, multilingual, and IT literate people. Technical education is particularly strong, thus high school students perform among the best in mathematics, physics and IT international competitions. In recent years the number of university graduates grew by almost 14% annually averaging 14,370, while 1/3 of all students graduate from technical universities. The Strategic Geographic Location is the third reason one should consider Serbia as a place to do business from. Not only because Serbia has easy export access to Russian market, but also from Serbia, you can effectively serve your European and Middle Eastern customers thereby enhancing your business performance. Furthermore, a company can fully benefit from having production outside the European Union, while enjoying the possibility of easily accessing the EU market. Bordering Hungary, Romania, and Bulgaria, Serbia is at the doorstep of the European Union. Via strategic transportation corridors No. 10 and No. 7, the country links Western Europe and the Middle East.
In Serbia Operating Costs are much lower than in most of neighboring countries. Serbia’s tax system is highly conducive to investments featuring the following unique benefits: One of Europe’s lowest corporate profit tax rates set at 10%; Value Added Tax (VAT), salary tax and social insurance contributions are highly competitive compared to Central and Eastern Europe; A 10-year corporate profit tax holiday for investments over €7.5 million and 100 new employees, Tax credits for investing in fixed assets up to 80% of the invested amount; and State subsidies for creating new employment.
Looking for a perfect location may be a great challenge, especially if it is in a foreign country. However, Serbia Investment and Export Promotion Agency’s ever expanding database of Greenfield and Brownfield locations that are immediately available for viewing on line and on site is giving you the quickest way of choosing your new business location. At the moment the database counts almost 400 locations that you can also immediately locate on the interactive map.

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