Invest in Serbia - Doing Business in Serbia

SEE Business - South east europe markets - Doing business in Serbia Croatia Bosnia Macedonia Montenegro

2009-04-17T00:00:00.002+02:00

Doing Business in South Eastern Europe Markets - Serbia Montenegro Macedonia Croatia Bosnia and Hercegovina, emerging markets countries offering lower costs of production and excelent conditions for expanding your business.
Find your alternative supplier from Serbia Montenegro Macedonia Croatia Bosnia, business partner.Explore the markets of more than 20mil consumers and alternatives in more than 10.000 respective referential firms, expand your offers and products. We are networked with SEE markets stakeholders and actors in - energy sector, metal production, textile, furniture industry etc.Forward your offer – business proposal to more than 10.000 network members, companies – stakeholders – consumers – partners.As potential investor you are now in position to benefit from the continuous improvements in the SEE countries business emerging market. Whether you are foreign investor or company planning to establish or expand your business operation in SEE region, requiring information on business and investment opportunities in SEE countries, Doing Business In SEE promotion project will provide you with cost effective resources and assets.Assets - providing SEE markets competitive advantages and Resources - selected referential companies in SEE region – Serbia Montenegro Croatia Macedonia Bosnia H. These companies are part of new SEE business environment, modern business and market oriented SEE region, and they are presented thru sectors describing its competitive advantages.

Metal processing industry

2009-03-08T21:50:00.001+01:00

Overview
Serbian metal/mechanical industry comes from a long tradition and it is, still today, one of the most important sectors of Serbian economy with almost 100,000 workers accounting for 6% of national GDP. This comprises 3,600 companies out of which 43% are big size companies, 26% are medium size companies and 31% are small size ones. Metal processing products account for 20% of the Serbian exports and 34.2% of the Serbian imports. Traditionally this industry has always been very export-oriented and opened to collaboration with foreign companies. Serbian metal processing workers are highly skilled and trained to meet with the European market Standards. On the other hand labour cost is one of the lowest registered within the Serbian industry.

Strengths
As evidenced by import/export activities between Italy and Serbia, Serbia largest imports from Italy are represented by mechanical and household appliances. The Serbian metal/mechanical sector also accounts for significant imports of Italian packaging machines and food processing lines. According to present forecasts, this industry will continue to offer interesting opportunities for foreign investments and collaborations. As already mentioned Serbian metal/mechanical workers are highly skilled and very familiar with European market requirements and Standards. On the other hand labour cost is one of the lowest registered within the Serbian industry.

Opportunities

As regards foreign investment and industrial cooperation, the following considerations apply: investing in Serbian metal/mechanical industry means acquiring some very important economical benefits such as low labor costs (especially medium skilled labour) and low transport costs due to the geographic proximity of Italy and Serbia. Investing in Serbian production will not only allow a company to access a fast growing local market with a strong and growing request for machineries but will also provide them a further access to the various other markets holding preferential trade agreements with Serbia. As regards industrial collaborations, a lot of opportunities are available especially in the field of subcontracting agreements. High credit cost, obsolete machineries and lack of western-style management and sales skills, are some of the main reasons why local companies tend to welcome subcontracting agreements. In short, the Serbian metal/mechanical industry has very high expectations as regards the joint venture between FIAT and ZASTAVA agreements, which will allocate significant investments up to approximately 700 million Euros a year for the construction of a local production unit with a capacity of over 200,000 vehicles per year.

Wood processing industry Serbia

2009-03-08T21:44:00.004+01:00

Wood processing industry

Overview

The wood/furniture industry has traditionally played an important role in the Economy of Serbia. Since the end of the Second World War, Serbia, a country rich of abundant local raw materials, has always maintained a positive trade balance. The country is still rich in remarkable natural resources representing the main reason for its ongoing competitive wood/furniture industry. In fact the forest reserves of the country are estimated to be worth about 235 million cubic metres while woods and forests actually cover approximately 27% of the Serbian Territory which is equal to about two million hectares. The most important areas are the plains in the autonomous province of Vojvodina and the mountain regions in Central Serbia whose climate conditions are respectively very favourable to the growth of poplar and the oak and to hardwood and beech. 47% of the Serbian forests are state owned and controlled by the two major state companies of “Srbijasume” and “Vojvodinasume” respectively managing 85% and 7.5% of the public forest reserves in the country. Private forests make up for the remaining 53% of the country’s forest area which is predominantly split into many small-size land lots (0.5 hectares in average). Large private forestry holdings are just a few but hold a considerable potential for further growth and development. These companies are well-known suppliers of high quality hard wood and a predominant solid wood used in the local furniture production. Activities carried in private forests are subject to the supervision of Srbijasume and Vojvodinasume.

Strengths

In Serbia the production of sawed unrefined timber (boarding) originating from hardwood appears to be prevalent in the Wood Industry. Beech wood accounts for the majority of sawed timber and covers 70% of the total production. 8.5% of the boarding and planking production is obtained out of oak while 11.5% is made out of poplar. At present, thanks to the significant price benefit, timber is also made of fruit trees such as walnuts and cherries. Serbia also produces sawed unrefined timber (boarding) out of softwood mainly obtained from common spruce, fir trees and pine trees available in the country only in limited quantity (9% of total country’s forests). The production of this type of boarding is mainly managed by state-owned companies and is hardly expandable to larger industrial scales due to insufficient financial means and the difficult procurement of raw materials. In Serbia great development is taking place in the field of veneered panels. Poplar is the main timber wood used for veneering products and covers nearly 85% of the total production. However, beech is also reaching significant volumes in veneering. Timber for plywood production is another important Serbian resource. The very large local reserves represent the only source of procurement. In 2006 the annual production of plywood lumber was at 190,000 cubic metres out of which 90% was poplar, 5.4% was beech and 3.1% was oak. The majority of plywood is exported to countries such as Italy, Macedonia and Germany.

In addition, Serbia is a producer of particle-board required by the furniture industry. In fact huge quantities of rejects suitable for particle board production are available in the country from the production of wood carvings and from the forests. Nevertheless Serbia with about 16 cubic metres of material per inhabitant is one of the last European countries in consumption of particle board. As for furniture industry, Serbia is a manufacturer of numerous types of different furniture from bedrooms to living rooms and from kitchens to office furniture. Bedroom furniture appears to be a remarkable product for the hotel sector where Serbian suppliers are well-known and appreciated both locally and abroad. This is especially true for the Russian Federation where the Serbian furniture dealers have created joint ventures with local distributors in order to refurbish hotel and schools, etc. Finally, Serbia has an outstanding tradition for producing wooden doors and windows. This sector counts 275 active companies partially exporting to Russia and Europe and partially selling to the domestic market. Oak is mainly used in this production of wooden doors though fir and common spruce are also used in a significant quantity. Wooden doors and windows production has further increased thanks to the consistent growth of construction business over the last few years.

Opportunities

The foregoing short outline shows that Serbia has the potential for becoming a preferred target of foreign investments in the wood and furniture sector. Additionally to this specific potential one should account the following benefits offered by the country in general. There are over two million employees in Serbia and one third works in production sectors. The wood processing and furniture industry includes 2,365 companies, 96% of which are privately owned and mainly located in the central areas of Serbia. The majority of these companies deal in timber (1,491) and furniture (402). This sector contributes to the Serbian Gross Domestic Product (GDP) by 1.24% and represents 3.95% of total industrial production with an ongoing positive growth trend over the last few years.

Serbia ’s long-term experience has fostered a number of highly skilled, qualified workers who are the life of this sector. In the country there are twenty-two technical high schools for wood carving and wood working plus a dedicated faculty of forestry at the University of Belgrade. In the furniture industry 10% of workers have a post-graduate qualification or a university degree. Another important factor is the cost of workmanship that is one of lowest in the Balkan regions. The average monthly wage before taxes in this sector is no more than 350 Euros for workers, 400 Euros for skilled workers and 500 Euros for supervisors. If on one side the low labour cost is out of doubt a very attractive reason for foreign investors to do business in Serbia or anyway to collaborate with local parties, on the other side it is one of the reasons together with obsolete machineries why production output is still rather low. Despite the difficulties of the last few years, small companies have started to update parts of their production equipment and especially medium-large companies who introduced CNC machinery and technical software as CAD and CAM. Traditionally, the demand in the local market for wood and wooden products is high and is still consistently growing further to recent economical developments, namely the flow of foreign investments allocated after the Serbian transition and privatization process started in 2000. Serbian transition and privatization process brought forth a number of interesting opportunities for foreign investors especially in the privatization field. Foreign investments in this sector are still limited and it has been forecasted that the privatization of some sectors such as the production of multi-layer particle boards, particle boards and plywood panels will soon be completed.

Serbia Energy Sector at glance

2009-03-08T20:42:00.001+01:00

Energy sector at glance

- Serbia has produced in 2003 a total of 30 108 GWh of electricity
- Most of the electricity is produced by the thermal power plants. In 2003 thermal plants account for 72.7% of the overall electricity production in Serbia. Hydro-plants produce the remaining 27.3% of the electricity.
- A new law was passed in July ensuring more competitive energy sector primarily aimed towards better overall satisfaction of end users.
- Energy Agency will act as an independent regulatory authority ensuring healthy development and implementation of national energy development strategy.
- Households account for 58.84% of electricity consumption in Serbia.

Possibilities for development

Serbia is experiencing slight changes in the energy consumption. It has become evident, as the consumption of electricity in winter is slightly lower, whereas in the summer consumption increases. This can be explained by more efficient heating and increased use of cooling equipment. Serbia still has not maximally utilized the renewable energy sources even though more than a quarter of the energy comes from hydro-plants. In particular smaller communities could benefit from small-scale micro-hydro-plants or wind powered plants. Over time, it can be expected that role of gas powered plants will increase. This is primarily because of availability of gas from Russia, with whom Serbia has a free trade agreement.

Production

Based on commercial contracts 1 667 GWh of electric power was imported, what is by 46 per cent less than in the previous year. For the first time after 11 years, we signed a contract for commercial exports of 394 GWh. The power generation in electric power plants of Serbia and hydro power plant Piva was 34 192 GWh. The power generation of power generating facilities of EPS was 33 436 GWh, and if the share of thermal power plants from Kosmet is excluded, (Kosovo A and Kosovo B ), the output was 30 108 GWh.
Thermal power plants and thermal power-heating plants of EPS generated 24 318 GWh and achieved the greatest share (72.7%) in the total achieved annual power generation of EPS. The hydro power plants of EPS generated 9 118 GWh, which has been, due to extreme drought, the lowest annual power generation, and therefore the lowest share (only 27.3%) in the total power generation of EPS within the last ten years.

Although a record power generation was achieved, as it had been increasing for four years repeatedly, it was still insufficient to meet the consumers' needs. Actually, the gross consumption was 34 340 GWh of electric power. The public companies for distribution received 31 951 GWh and 1 160 GWh was supplied to direct consumers. The share of households in the total consumption was 58.84%. The maximum monthly consumption was realized in January (3 741 GWh), and the lowest in June (2 196 GWh). A peak hourly load of 6 564 MW, was marked at 6 p.m. on 13 January. Compared with the previous year, electricity consumption for heating of premises during the winter months was reduced, but, on the other hand, it was increased for cooling purposes during the summer period.

Key benefits

Exceptional cost efficiency – low labor and utility costs, combined with the lowest corporate tax rates in Central and Eastern Europe and increasing productivity to underpin profitability.
High intellectual capital – Technologically advanced, well educated and highly cost competitive labor force available.
Linguistic skills – The best command of the English language in Central and Eastern Europe by a very wide margin, according to a survey by Gallup International.
Strong tradition in energy business – companies from Serbia, in particular those private are predominantly export oriented and represent real partners when it comes to exporting. Adding this to numerous free trade agreements, Serbia becomes an attractive location for outsourcing and that demands performance on competitive market.

Agriculture and food processing industry

2009-03-08T20:40:00.000+01:00

Overview

Agriculture is still one of the most important industries of the Serbian economy. According to Serbian Agriculture Ministry data, this industry actually employs 10% of overall work force and accounts for 21% of Serbian GDP. Moreover agricultural products account for 26% of total Serbian exports. Out of 5,200,000 hectares of agriculture land, 85% is privately owned lands and 15% belongs to cooperatives or public government. 83% of Serbian agricultural lands is farmland. Harvest yields account for 57% of the total agricultural production while cattle breeding accounts for 33%. Vineyard and orchards account for 5% and 4% respectively. 60% of the harvest products is made up of cereals and only 18% is vegetable. The breeding industry includes pig, cow, poultry and sheep breeding respectively accounting for 41%, 40%, 14% and 5% of total breeding industry production. Wheat is the most important cereal with a throughput ranging between 2 and 2.5 million ton per year and a cultivation area of over 650,000 hectares land yielding on average 3.5 t/hectare. Corn is the second mostly cultivated cereal with nearly 2 million ton per year with a yield of 4.5 ton/hectare. Sugar beetroot with an overall production of 35 ton/hectare is another important Serbian crop. Sunflower cultivation areas extend over 170,000 hectare of land yielding a production of 300,000 ton/year and 1.7 ton/hectare. Considerable yields are also coming from the fruit sector, especially apples and plums, although there has been a recent decrease both in local consumptions and exports. Viticulture is quite spread over the whole country with an average production of 380,000 ton table grapes and wine grapes. With an overall production of 50,000-70,000 ton/year Serbia has long been one of major raspberry producers in the world and still holds a leading position. Beans cultivations cover a surface of 50,000 hectare land yielding 1.1 ton/hectare for a total production of 60,000 tons per year. Potatoes cultivations cover an area of approximately 100,000 hectare for a total production of 800,000 ton/year. Food processing industry is presently the most attractive sector for parties wanting to invest or draw up collaborations with local parties. In fact, although Serbia has remarkable natural resources and a sound, traditional production background, the industry still lacks modern technology and strongly needs implementation.

Strengths

Reflecting Yugoslavian industrial policy implemented by Yugoslavia until 1991, Serbian food processing industry has developed in the main areas yielding the highest rate of production at that time entirely exported to Yugoslavia, that is: the area of Vojvodina, the Northern regions and the South-East of the country. When Yugoslavia collapsed, Serbian agriculture and food processing industry lost not only a big part of its reference market (former Yugoslavian Republics) but also a big part of their international markets. So, the industry had to turn to the domestic market suffering an ongoing loss of purchase power. For this reason Serbian agriculture has been experiencing a progressive decline and is now confronted with the problem of a production much below the actual capacity of the country and relatively high prices. Clearly Serbian agriculture has a large potential for increasing the production and serbia-business.comits exports which makes it an attractive target of perspective investments by Italian companies dealing in agricultural machines. Moreover many Serbian companies are a still public or mixed company which means good opportunities of buyout/privatization actions. At present over 200 farms and 100 food processing industries are still on the privatization list.

Opportunities

Analyzing the perspectives of the different agricultural and food processing sectors, animal breeding and meat production/processing industry is by far one of the most promising subsectors. Despite the decreasing purchase power of the consumers and the dramatic decline experienced by this industry in the last 15 years, this sector has a long tradition of high quality production and the right potential for becoming a fast growing and high quality, competitive export industry after the completion of the actual privatization process. Modern economical reforms are providing increased stability and the suitable ground required for improving the lifestyle of the population. On the other hand, modernization and innovation are mandatory for this sector, since many companies still use old plants and obsolete production systems. So there are good opportunities also for manufacturers of machines and technologies. Other potentially interesting sectors are: fruit and vegetable processing industry, mineral waters and soft drinks industry and snail breeding industry. Thanks to the high quality and quantity of Serbian fruits production and to the growing international market demand for these products, valuable perspectives have been recently outlined for the fruit processing industry presently offering fruit juices, juice concentrates, fruit-based products with or without added sugar, semi processed fruit material with no added sugar and frozen fruits. Another fast growing industry is the soft drinks one producing juices, carbonated drinks and mineral waters. However, differently than in the rest of the world where this business is concentrated in the hands of a few big industrial groups, in Serbia this industry is distinguished by the presence of many small companies. Serbian soft drinks consumption is growing on average by 15% every year while mineral water consumption is growing on average by 5% every year. Snail breeding has undergone a significant growth due to its high revenue level as compared to the low initial investment. Since Italy is one of the leading countries in this industry and some cooperation agreements already exist in this area, we hope that more collaboration may start in the near future.

Textile and footwear industry

2009-03-08T20:38:00.000+01:00

Overview

The Serbian textile/garment industry comes from a long tradition and it is still one of most important industries in the country with about 100,000 workers and 10% of country GDP. The sector mainly comprises privately-owned companies (80% private enterprises out of 1,200 active companies in Serbia). The Serbian industry has always been opened to collaboration with foreign companies and has traditionally dedicated to foreign markets the majority of its production. 70% of Serbian exports, almost 200 million Euros, is shipped to EU markets. Serbian workers are highly specialized and trained to meet European market standards. On the other hand textile labour cost is one of the lowest in Serbia. Since the beginning of Serbian transition, the textile/garment industry appeared to be one of the most important sectors for foreign investors and foreign partners. Several Italian industries have already taken advantage of the Serbian privatization process that started in 2001 and many more have already signed partnership agreements with local companies.

Strengths

Serbia is geographically located in a very strategic position at the intersection of two important European corridors: n.7 and 10. Thanks to a number of economic pacts between Serbia, and USA, producing and manufacturing goods in Serbia means having preferential access to numerous markets. Serbia is located in the middle of the Balkans free trade area; hence goods manufactured in Serbia can be shipped duty-free to nearly 55 million people. Serbia is the only country outside the Commonwealth of Independent States having free trade agreement with Russia assuring exports to some 150 million people against a mere 1% duty on the shipment value.

Opportunities

An analysis of the trade/exchange flow between Italy and Serbia shows that garments are the third most important goods imported by Italy from Serbia accounting for more than 60 millions of Euros while yarns, fabrics and other textile products are the third most important goods exported by Italy totalling serbia-business.com100 million Euros. According to perspective studies, garments and textile will continue to offer interesting opportunities for industrial investment and collaborations. The Serbian government equally considers this sector as a priority in the framework of its investment policies aiming at regaining the traditional competitiveness of the local companies. A lot of companies have not been privatized yet which leaves a lot of opportunities opened to foreign investors. Finally on March 31st, 2005 Serbia and EU signed a textile industrial agreement to provide significant support to this sector. According to this agreement Serbian industries may export textile products to the EC without any custom duty. As already mentioned, textile goods exported to the European markets account for 70% of total Serbian textile exports, hence this agreement represents another remarkable incentive to investments.

Serbia Business Country Gateway - Doing Business in Serbia

2008-02-25T11:10:00.005+01:00

Serbia-Business.com

office@serbia-business.com

As potential investor you are now in position to benefit from the continuous improvements in the Serbian business emerging market. Whether you are foreign investor or company planning to establish or expand your business operation in Serbia, requiring information on business and investment opportunities in Serbia, Doing Business In Serbia promotion project will provide you with cost effective resources that are presented thru categories Assets and Resources.
Assets - providing Serbian competitive advantages and Resources - selected referential companies doing business in Serbia. These companies are part of new Serbia brand and business environment, modern business and market oriented Serbia, and they are presented thru sectors describing its competitive advantages.

PROJECT MANAGEMENT

Market and Investment research
Preparation of budget plan, tender documentation and other specifications
Selection of teams and providers
Contracts negotiation
Animation, coordination and monitoring of works and teams
Ensure the observance of planning and controlling costs planned
Collaboration with local authorities and international actors

INVESTMENT & BUSINESS PROMOTION ACTIVITIES

Investment opportunities research and development (political and economical analysis)
Writing projects for tenders in accordance with European laws
Partner research and linkages on national and international levels
Connecting suppliers/buyers from abroad with suppliers/buyers in Serbia

1. Preparation of investment – Complete organization and management of additional services required and in accordance with law regulations ( technical specialized firms, agencies and companies ( layer, engineer/s, architects etc )
2. Market research (purchase - renting, possessions , options of/for privatization, extension of capacity , availability , quality plus quantity of labour force, fiscal policy research- legal aspect , options greenfield &. "brownfield" investment )
3. Preparation , organization, assistance for investor visits to Serbia( assortment of locations , organization of selected and crucial meetings with authorities and relevant institutions, preliminary negotiations
4. Action on the basis of authority : engagement in acquiring of land possessions and/or process of privatization , leasing land options
5. Execution of investment
6. Project Management & check procedures ( production process , flow of documentation and within the information framework , HR management ) on the grounds of investor instructions

Land law categorization in Serbia & Construction procedure - key points

2007-11-01T13:24:00.001+01:00

Land law categorization in Serbia & Construction procedure - key points

Law categorization in Serbia

Serbian legal framework recognizes two land categories most commonly used for investment purposes.

Construction land
It is the land on which structures have been built as well as the land that serves for regular use of the land that serves for regular use of these structures and the land designated for construction and regular use of structures envisaged by the urban plan.
Construction land can be:
- public construction land ( in state-municipality ownership)
- other construction land ( in all ownership forms – private and state)

Agricultural land ( in all ownership forms – private and state owned)
- cultivable land
- uncultivable land

Characteristics of public construction land
Public construction land has the following characteristics:
- it is state owned
- it covers land area where structures of public interest have been constructed
- it is a land area designated for construction of public structures, as well as public areas (public roads, parks, squares, streets etc) according to the Urban plan
Public construction plan is exclusively state property and as such is solely intended for construction of structures of public interest ( roads, schools, hospitals, infracture)

Other construction land is land where structures already exist, as well as land predefined for construction of structures. It is previously not declared as public construction land. It is transferable and can be found in all types of ownerships. The municipality is responsible for rational use of other construction land. The structures which can be built on other construction land are: residential, commercial, industrial, etc. This classification is in accordance with the Urban municipality plan.
There are three ways of acquiring other construction land ( OCL) for construction

By leasing the land
OCL in state ownership – municipality land can be leased for 99 years under conditions set my municipal authorities. The land is leased through either public bidding or public tender. The lessee automatically obtains a right to build structures.
Once he has the structures built on the land previously acquired he becomes owner of a built structure, and is obliged to use the land according to its designated purpose.

Acquiring a ‘right to use’ the land
The right to use the land granted for indefinite period of time by the newly adopted Law on Urban planning and construction. The right use to use the land is irrevocable and permanently attached to the ownership of the structure located on a particular land lot. It is based on either:
- ownership of a structure built on the land in accordance with the Urban plan ( in which case the land has the same status as the structure)
- intention to construct a building on urban land. Right to use the land is related to the ownership of the structure located on the urban plan. It entitles the user to permanently use the land as long as the previously acquired structure remains on the land acquired.

By acquiring OCL through conversion of agricultural land into construction land
By acquiring agricultural land in private ownership with a possibility of conversion into construction land and investor automatically obtains the right to build a structure on it according to the Urban plan. Only agricultural land which is included in Urban plan can be reclassified to OCL.
For the conversion of agricultural into OCL land an investor must submit a formal application which includes:
- description of the current and intended use of land in question
- a certificate of owner or the right to use papers
- an extract from Urban plan which provides grounds for obtaining a building permit

Construction procedure

1. Assessment of urban conditions for construction
- excerpt from Urban plan or Act of urban conditions, not older than 6 months
2. Obtaining land
- leasing land – municipally owned
- buying private building with the right of use the land for building new structure according to Urban plan
- buying agricultural land with the possibility of conversion
3. Construction approval
- conceptual project – preliminary architectural design
- proof of ownership, leasing or right of use the land
- excerpt from Urban plan or act on zoning conditions
- validity of the construction approval is 2 years from obtaining
4. Notice of the start of construction
- Investor submits the main project with the confirmation of payments of compensations for the development for the development of the construction land and other administrative fees
5. Construction
- preparing construction documents
- the investor provides expert supervision
6. Technical inspection of a structure
- assessment of compliance of the construction works with construction approval and technical documentation
7. Occupancy permit
- as-built drawings
- technical inspection of the structure

Construction approval can be obtained now very easy considering the tendency to simplify the construction procedure, Urban permits and building permits have been abolished and replaced with construction approval. Prior to construction of structure a potential investor is obliged to obtain the construction approval and prepare technical documentation for the construction.

Investment insurance organization and International Banks in Serbia

2007-11-01T13:23:00.000+01:00

To secure your investment in Serbia

Investment insurance organization and International Banks

There are various foreign companies along with other bilateral and multilateral organizations providing risk insurance against non commercial risks such as : civil war, expropriation, nationalization , confiscation, inconvertibility of profits and dividends and transfer inability of currency.
Investment insurance organization

Austria – OEKB – www.oekb.at
Belgium – ONDD – www.ondd.be
Canada – EDC – www.edc.ca
Germany – PwC/Euler Hermes – www.agaportal.de
France – COFACE – www.coface.com
Italy – SACE – www.isace.it
Japan – NEXI – www.nexi.go.jp
Korea – KEIC – www.keic.or.kr
Slovenia – SID – www.sid.si
UK – ECGD – www.ecgd.gov.uk
USA – OPIC – www.opic.gov
World Bank – MIGA – www.miga.org

Extensive reforms in financial sector have produced a sound and efficient banking system in Serbia. The results are best seen through rapid growth of total domestic and foreign currency savings, standing at more than 2 billion EUR or almost 100 times the amount five years ago.
Among many other, 17 foreign banks have set up their business operations in Serbia either through Greenfield projects or acquisitions.

Alpha Bank – Greece
Banca Intesa – Italy
Credit Agricole – France
EFG Eurobank – Greece
Erste Bank – Austria
Findomestic – Italy
HVB Bank – Austria
LHB – Germany
National Bank of Greece – Greece
New Ljubljana Bank – Slovenia
OTP – Hungary
Piraeus Bank – Greece
Procredit Bank – Germany
Raiffeisenbank – Austria
Societe Generale – France
Volksbank – Austria

Source National Bank of Serbia

Labour relations in Serbia

2007-11-01T13:21:00.000+01:00

Labour relations in Serbia

Employment may be established with a person who is in good general health, who is over 15 years of age and who meets the criteria for the position established in relevant enactment of the employer.

As for the foreigner, work permits are required for foreigners employed in Serbia and are issued with a validity of 3 to 12 months. An application for a work permit is submitted in person or by mail to the Labor market office in Belgrade. The average time for obtaining the work permit is two days. Work permit can be renewed without obstacles and the procedure is identical with the first application.
Steps for obtaining a work permit
1. A residence permit issued by the Ministry of Foreign affairs
2. An application by the company
3. An application by the individual
4. A work permit issued by the Labour Market office

Employment types
A labor contract may be granted for both, definite and indefinite period of time. A labor contract for a definite period of time may be signed for specific circumstances such as seasonal jobs, specific projects etc. Contract for definite period of time may last no longer than one year.
The labor contract may be concluded for a part-time work, for definite or indefinite period of time. The employee is entitled to social insurance and to all the rights stemming from the employment contract in proportion to the time spent at work.
An employer may sign a contract with a person for temporarily and periodical work related to his line of business. This contract can be longer than 120 days in one year. A person with whom this contract has been made is entitled to pension, disability and health insurance. An employee can also conclude a special service contract to perform jobs outside the line of business of his employer and with the aim of independent execution of particular physical labor or intellectual work.

Working hours/overtime/leave
The working week has 40 working hours. A Book of Rules signed between the employer and employee may conclude a reduction in the number of working hours which cannot be lower than 36h per week. In the case of sudden increase in the scope of work and in other cases imposing the need for completion of unplanned work within a specific time limit employees can work overtime, no more than four hours a day, and at most eight hours per week.
For each calendar year, an employee has the right to at least 20 working days of annual leave for a period to be determined by general act or contract of employment.

Hope this will assist you a little bit more.

official source: digest of SIEPA various guidelines

Serbia Energy capital investments -Construction of new facilities-

2007-11-01T13:20:00.003+01:00

Obrenovac Serbia Energy Observer
Capital investments in Serbian energy sector
-Construction of new facilities-

The tender for selection of strategic partner for construction of new power plants TENT B3 and TE Kolubara B is being expected in the third quarter of 2007, while the signing of the contract with selected partner is planed for second quarter of 2008.
Management board of Electric power industry of Serbia EPS adopted the information on realization of joint investment of EPS and strategic partner in the construction of thermo power facilities TENT B3 (700mw) and Kolubara B (2x350 mw). Strategic partner will be selected in a tender procedure and project companies will be founded as Ltd companies which are the most appropriate model for planed joint investment. Assets ratio of EPS and strategic partners in the basic capital of project companies will be defined after tender procedures, decision making on the most important steps will be made with mutual consent of both sides regardless of their share in the companies.
Total estimated value of investment in the plant Kolubara B is 750 mill Euro. EPS will deposit in the new joint company non financial share in assets and objects, rights and investment which will cover various preparatory works and services, while the strategic partner would have both non deposits as well as money capital deposits. When it comes to the TENT B3 project company total estimated value of this investment is app. 900 mill. Euro and EPS will invest in this company, beside the non financial deposit, significant ammount of financial assets what represents that this investment is even more real.
Considering the importance of this planed capital investments it is logical to consider the active role of government of Serbia especially within the scope of providing of support to selected model of investment realization and regulation of relations with strategic partners and their rights protection.
For realization of this model of joint venture it is necessary to perform two separate tender procedures for selection of strategic partner, also it is crucially important to produce the appropriate model of contract for purchase of electrical energy which will be produced in these new companies and that will be purchased by EPS on a long time agreement base.
It is planed that EPS in the first five years takes 100% of produced electrical energy, what is usual credit condition, and for the time period between 6 and 15 year, the strategic partner will submit the proposal of, within the tender application, the structure of delivery of electrical energy to EPS and of course with the right of first buyer. Beside these elements of relations regulations with strategic partner, the tender documentation for TENT B3 will contain important elements of rules of joint usage of existing infrastructure of TENT
----Source TENT magazine----
Obrenovac as Serbian & Balkan energy center will host and be in the center of this planed capital investments and even more increase its strategic and business importance in Serbia. Strategic position of Obrenovac, closeness of Belgrade and its airport are the advantages already interesting and attractive for foreign companies interested in energy market entry but as well on other related sectors.
For sure we can say that Obrenovac is becoming the business centre beyond the energy capital, place that can meet any investor needs.

www.investinobrenovac.com

Capital investment in Serbian energy sector

2007-11-01T13:20:00.001+01:00

Obrenovac Serbia Energy Observer

Capital investment in Serbian energy sector
- TENT A4 Overhaul 2007- general overview-

Ongoing overhaul of TENT Obrenovac A4 unit is far most one of the biggest investment in Serbian energy sector in this year.

Beside several Serbian companies some respective foreign companies are involved in the A4 overhaul and engaged in their line of expertise. Beside Alstom power and Doosan Babcock Energy two project leading companies, we would like to mention several Serbian companies working as their subcontractors Gosa, Termoelektro, Izoprogres as well as the large number of local companies from Obrenovac providing the necessary local services for cost effective project management.

Work progress is ongoing and in accordance with previously determined Project schedule of rehab and overhaul of A4 unit on TENT Obrenovac. Excellent coordination of works between contractors and TENT related departments is one of the main reasons for positive and effective project management and it can serve as a example for future planed rehab activities on TENT power plants A and B..

It is important to mention that the number of local services companies from Obrenovac is increasing on this type of capital overhauls which demonstrates their importance for cost effective project management but also potentials for some other future cooperation.

With establishment of cooperation with EU engineering associations and engineering consulting companies, Invest Obrenovac Energy Observer created the link of cooperation between Serbian companies and their counterparts in energy and other related sectors, important for any market entry or joint investments.
Investors are recognizing the importance of complete information on local investment climate, full scale of required services and other necessary elements for any market entry, temporarily or permanent.

A4 Tent Obrenovac 2007 overhaul is just an inceptive phase of future planed activities and capital investments in Serbian energy sector.

www.investinobrenovac.com

HR management as one of the crucial steps in Serbian market entry

2007-11-01T13:19:00.001+01:00

Within the scope of ongoing and perspective investment projects and market entries in various business sectors foreign companies are paying great attention to the proper labor selection, from start up teams to the full scope of operational staff.
There are many HR companies working in Serbia, majority are foreign companies, but as well with raising number of local Serbian agencies. And they all have sufficient number of clients since Serbia has a good labor market.
Among many of the foreign HR companies operating in Serbia as local legal entities, it can be determined that more or less the market is shared. We have agencies working for clients from the eastern part of EU and doing pretty good making their name in Serbia , as well as world wide known companies from the western part of EU. For example, very often German company market entry and its start up teams building are entrusted to the German owned HR agency. The new trend is exporting of labor force to the EU countries.
Considering the increasing number of companies entering Serbia and the same demands for professional and skilled labor force maybe there is a space for more companies in this sector.

Dekra employment, as one of the leading HR companies working in Serbia, is specialized in assisting foreign companies in their establishment and start up business. As part of the joint stock company DEKRA AG (Stuttgart), Serbian Dekra employment definitely brought new business approach and solutions in this highly important aspect of doing business in Serbia.

In addition Dekra employment is the Co-founder of the German Management Pool, multilevel project that offers to potential investors in Serbia cost effective and complete business solutions for their start up.
Better insight you can find on:

http://www.dekra-zapo.co.yu/eng/index.jsp

http://www.germanmanagementpool.com/

Residential market situation in Serbia & Investment Perspective

2007-11-01T13:18:00.001+01:00

Besides shopping malls, office space and logistics centers, residential projects currently probably constitute the most dynamic segment in an allover pattern of the real estate development in Serbia. We can openly say that this portion of the real estate together with office space has come most closely to the world already existing standards but still very demanding in our own market.
During the past decade, Serbian residential market has been influenced by many factors which included the political and economical situation and overall standard of the population. Due to these reasons, no extensive development or construction activity occurred in this period in the major Serbian cities causing a large gap between the present housing supply and the anticipated needs. Because of population migrations on micro and macro level and the overall development of the country, most effectively depicted in its economy revival, it is expected that the demand will steadily grow in the coming years. Additional support is expected to arrive in shape of constant strengthening of the macroeconomic picture and widening credit options.
The economic and demographic composition of the population of Belgrade and other big Serbian cities and the constant and steady growth of its economic capabilities has influenced the growth of supply and demand for high-middle and high-end units. Apartments in central area of Belgrade sell for 1,700 to 2,000 EUR/m2. Depending on the exclusivity of the location, the prices can go up to as high as 3,000 EUR/m2. There are several large scale projects in the pipeline with amenities and finishing works which should meet the need of even the most demanding buyers.

Property market & legislation in Serbia

2007-11-01T13:17:00.000+01:00

LEGISLATION

LAND CLASSIFICATION

According to the Law on Planning and Construction, the main types of land are:

• Construction land
• Agricultural land

There are two types of construction land:

• Public construction land
• Other construction land

Public construction land is land in state ownership, on which public structures of general interest have been built, and developed public areas, as well as land, according to an adopted plan, designated for stated purposes.
Other construction land is land that can be in all types of ownership, due to fact that it is subject to free trade on the market.

LAND OWNERSHIP

Apart from private and state property, there are specific types of public property and different forms of collective property (cooperative, mixed property).

All of the city construction land is under the state property regime. Owing to the fact that the city land is state property, the real estates built on this land are in private ownership. The owner of real estate built on city land enjoys exclusive “right of use” of the land.

According to the legal regulations, foreign individuals and legal entities which have business in the Republic of Serbia can acquire real estate (except city construction land – state property) in the same way as domestic entities, on two conditions:

• Property intended for use must be for business purposes
• Reciprocity must exist with the foreign country from which foreign investor is coming

There are certain limitations on acquiring real estate property rights for foreigners which are related to property locations (vicinity of military facilities or the like).

LEASE OF OTHER CONSTRUCTION LAND

Lease period: private family homes - 99 years; other purposes – 15 to 80 years

Initial fee is 90% of the market value of the construction land

Procedure:
1. Public auction in Public Enterprise (PE) for City Construction and Development
2. Bringing a Leasing Act from the Executive Board of the City Assembly
3. Signing a leasing contract with the PE for City Construction and Development

Deadline for bringing the land to its intended use, in compliance with the urban development plan, is 3 years following the day of signing the lease contract.

PERMISSION FOR THE CONSTRUCTION OF NEW BUILDINGS

Construction of building is carried out on the basis of Construction Approval and technical documentation consisting of: general design , conceptual design, detailed design (subject to technical control), contractor’s design and as-built design.

Characteristics of the Serbia labor market

2007-11-01T13:16:00.004+01:00

The labor force is one of the major assets of the region

Central and Eastern Europe is one of the most important developing regions. In 2006, 12 German chambers of commerce for the first time conducted a survey among 1000 German companies operating in 14 countries, concerning the investment climate in the region of East Europe.

The companies are generally satisfied with the conjuncture, and even more with their own business results: more than half of the companies surveyed said their operating results were good, and 42% of them deem their results to be satisfactory.

The surveyed companies generally assessed the overall business climate positively. Where prospects for 2006 are concerned, Serbia occupies the second position, with two thirds of respondents expecting the economic situation to improve.

The most optimistic were the German firms operating in Latvia, Serbia, Macedonia and Lithuania – over 75% of them said they count on improved conditions for doing business.

With regards to investment intentions in 2006, the findings of the German Foreign Trade Chambers (AHK) show the need to „catch up in the South“. Thus, 61% of the companies intend to invest in Serbia in this year.

In response to the question whether they would choose this region again for investments, 84% of respondents said they would invest in Serbia again, while 16% answered this question negatively.

Some of the attractive elements of the labor market in Serbia are:

- A high concentration of well-educated people
- Excellent foreign language skills
- Competitiveness of labor costs

Source: Report on the Conjuncture, 2006, German Chambers of Commerce Abroad

Austrian companies interested in Serbian market

2007-11-01T13:16:00.003+01:00

Serbian Minister of Trade and Services Predrag Bubalo met yesterday with a delegation of businessmen from Salzburg province and discussed economic cooperation between Serbia and Austria, and the stated province in particular.

The Ministry of Trade and Services says in a statement that representatives of the largest Austrian retail chain Spahr voiced interest in entering Serbia’s market and adds that the company has 25,000 employees and over 1,000 retail facilities, of which around 500 are in Italy and 280 in Slovenia, Hungary, the Czech Republic and Croatia.

At the meeting, held at the ministry, the collocutors also talked about the upcoming privatisation of the Belgrade Fairgrounds, for which Austria’s Reed Exhibitions is interested.

The delegation, led by Salzburg Vice-Governor Wilfried Haslauer, comprised directors of the Spahr retail chain Karl Blumberger and Karl Adamek, and Director of the Reed Exhibitions, Matthias Limbeck.

Source (Government of Serbia)

Serbian Industrial production in first half of year 5.2%

2007-11-01T13:16:00.001+01:00

The Serbian Statistics Office stated that industrial production in Serbia in June 2007, against the same period in 2006 went up by 4.8%, and in relation to the 2006 average, it increased by 4.4%.

In the first half of 2007, when compared to the same period in 2006, industrial production increased by 5.2%.

Observed by sectors, in June 2007 compared to June 2006, in the sector of electric power, gas and water supply there was a growth of 15.6%, mining and quarrying rose by 10.1%, and the manufacturing industry saw a growth of 2.3%.

In June 2007, against June 2006, industrial production in durable consumer goods was up by 13.8%, in energy by 10.4%, in capital goods by 6.3%, in intermediate goods, excluding energy, by 3.6%, and non-durable consumer goods by 1.9%.

Overall industrial production in June 2007, compared to June 2006, showed growth in 17 divisions that in the structure of industrial production participate with 70%, fall in 12 sectors that in the structure of industrial production participate with 30%.

The largest positive effect on industrial production growth in June 2007 compared to June 2006 was made by the sector of electricity, manufacture of food products, manufacture of basic metals, publishing, printing and reproduction, mining and briquetting of coal.

The most positive effect on industrial production growth in the first half of 2007 compared to the same period in 2006 was made by the sector of manufacture of food products, manufacture of basic metals, manufacture of furniture and manufacture of electrical machinery and apparatus.

The deseasonlised index of industrial production index for June 2007, compared to the 2006 average, indicates a 3.5% growth of overall industrial production and a 0.1% growth of manufacturing.

The deseasonalised industrial production index for June 2007, compared to May 2007 shows a 1.7% fall in overall industrial production and a 5.2% fall in manufacturing.

The production of small and medium-sized enterprises (SMEs) that were not included in regular statistical surveys was conducted on a sample of 334 selected units in the manufacturing section. In June, 107 enterprises submitted the requested data.

When the assessment of industrial production of SMEs of the sample is included, in June 2007 compared to the 2006 average, overall industrial production increased by 5.1% (otherwise this growth equals to 4.4%) and manufacturing increased by 8.4% (otherwise the growth stands at 7.3%).

(Government of Serbia)

CZECH-SERBIAN COOPERATION

2007-11-01T13:15:00.003+01:00

CZECH-SERBIAN COOPERATION

Projects, activities and cooperation between Czechs and Serbs

If you have realized a project with the aim of establishing and developing the traditionally good relations between Czechs and Serbs, you can contribute to the list on this page. Just send some text describing your activity and as long as it will be correspond to the philosophy of this section, we will publish it. Send your text to info@newbalkan.com.
Thank you for your contribution.

Invest Obrenovac Promotion Project - Multi level international partnerships

2007-11-01T13:15:00.001+01:00

Investment Promotion Project Invest Obrenovac Serbia, beside the fact that it is a local initiative, in the past several months managed to attract positive attention many related international and Serbian institutions.

Beside the established communication and cooperation with Invest in Western Balkans, the World Bank program for Balkans, relations were established with several specialized investment companies which resulted in several organized visits to the Municipality of Obrenovac and possible perspective investors.

On the other hand partnerships were established with SIEPA, SEIO, Serbian and Belgrade chambers of commerce etc. For promotion of Serbia the project team received number of positive comments. In addition cooperation was established with foreign trade agencies so many Serbian companies can be presented on foreign markets.

More on www.investinobrenovac.com

Serbia Energy sector capital investments - perspective for foreign companies

2007-11-01T13:14:00.001+01:00

Serbia Energy sector capital investments - perspective for foreign companies

I believe that all sector companies should pay attention to this capital investments in energy sector in Serbia. By entering through "small doors" of the market they can establish their presence and make their profit.

TENDER FOR COMPLETION OF STEAM POWER PLANTS "NIKOLA TESLA" AND "KOLUBARA B"
Soon unique tender for completion of steam power plants "Nikola Tesla" and "Kolubara B" – value of both projects is approximately EUR 1.5 billion

Electric Power Company of Serbia will announce unique tender for completion of Steam Power Plants "Kolubara B" and construction of the third block in Obrenovac-based Steam power plant "Nikola Tesla B" – General Manager of EPS, Vladimir Đorđević, announced.

Đorđević said that the power of both production capacities will be 700 MW, and strategic partner will be able to choose between investing in construction of one or both power plants. It is estimated that total value of both projects will be about EUR 1.5 billion. Đorđević said that the councillor had completed tender documentation, about which EPS would give its opinion in May and forward it to the Administrative Board of the company for adoption, while the final decision about announcement of the tender would be made afterwards by the Government of Serbia.

He expressed hope that there would be some companies interested in completion of Kolubara B and construction of new block in TENT, because Serbia needed both production capacities. As he explained, 700 MW would satisfy the growing needs for electric energy.

Zrenjanin - another attractive city for investments in Serbia

2007-11-01T13:13:00.004+01:00

At the investment attracting contest "Invest in Serbia", which was organized by USAID, Municipality of Zrenjanin won the title of the most attractive city for investments in Serbia.

What do city officials take price in and what do they point to ?

* Capital of Banat
* Largest municipality in Vojvodina and the second largest in Serbia (1,326 square kilometers)
* More than 100,000 ha of agricultural land
Population:

* 140,000 (85,000 in the city and 55,000 in rural area)
* 700,000 - Banat

Zrenjanin - University center:

* 2 technical faculties
* 4,000 students
* 8 secondary schools

It is pointed out that the University adapts to the needs of the investors for workers of certain vocation, so that the education programs are also adapted.

What are the other comparative advantages of Zrenjanin:

* Geographic position and traffic infrastructure
* Qualified and experienced manpower
* Very long industrial-entrepreneurial tradition
* Quick and efficient administration
* Free building land in industrial zones
* Location in industrial zones with complete infrastructure
* Freeing from payment for local fees and taxes
* Possibility of doing business in Free zone Zrenjanin

Distance from major cities in the surroundings:

* Novi Sad 50 km
* Belgrade 80 km
* Timisoara 100 km
* Szeged 130 km
* Osijek 140 km

source:
www.invest-in-zrenjanin.com

The Western Balkans Factsheet -summarizing the key advantages of the Western Balkans region as potential location for investment

2007-11-01T13:13:00.001+01:00

The Western Balkans Factsheet -summarizing the key advantages of the Western Balkans region as potential location for investment

http://www.iiwb.org/documents/WB_Factsheet.pdf

Investment Horizons: Western Balkans - Benchmarking FDI Opportunities
http://www.iiwb.org/documents/Benchmarking_study.pdf

Invest in Obrenovac Serbia - Some past activities

2007-11-01T13:12:00.000+01:00

Invest in Obrenovac Serbia - Investment & Business Promotion Project

Recent activities:

- presentation presented in 5 world languages
- established cooperation and communication with Serbian Diplomatic and Economic Representative Network in the World
- established cooperation and communication with Foreign Diplomatic & Economic Missions in Serbia
- established cooperation and communication with other Serbian cities and regional business associations
- representatives of Austrian Trade visited Obrenovac Project Office and Municipality, specific steps of cooperation initiated

- Hotel Obrenovac presented as a perspective investment project - Under privatization
- Protent Obrenovac - presented as reliable partner for doing business in Energy sector in Serbia

- New investment projects upcoming
1. New highway - Belgrade - Pozega
2. Construction of TENT B3 one of the planned biggest investment projects in Serbia starting 2008.

The place that meets your needs.

Invest in Obrenovac Serbia

www.investinobrenovac.com

Invest in Obrenovac - Serbian Local Investment & Business Promotion Project

2007-11-01T13:09:00.000+01:00

Dear All,

Allow me to present to you Serbian Local Investment & Business Promotion Project Invest in Obrenovac Serbia www.investinobrenovac.com

The mission of the project is to present one Serbian local community, its advantages and possibilities, in order to attract investments and new business initiatives.

Invest in Serbia Obrenovac - The place that meets your needs
The municipality of Obrenovac is offering a wide range of investment opportunities in sectors such as agribusiness, construction, tourism, logistics, shared business services and others. Strategic location of Obrenovac, access to all major transportation infrastructure, including pan-European Corridors No. 10 and No. 7, vicinity of Belgrade`s International Airport, highly developed infrastructure, and efficient administration will be decisive for your success.
The project has the goal to establish cooperation with other cities in Serbia in order to establish one unique presentation of the business possibilities. So far investors, embassies and foreign trade representatives relied on the Siepa activities and information’s, and in general that was efficient and useful for some communities.
During the inceptive phase of the project, all economic diplomatic & trade representatives in Serbia were informed about the project. The reactions of the mentioned targeted parties are more than great, direct inventive approach increases the chances for success. Such actions are recognized as very interesting and useful by all parties. Several official visits were organized with specific steps to follow. The importance of the project was recognized by huge official web visits statistics from many countries.
The project, which is initiative of group of young people, demonstrated that the decisive orientation to changes can be valuable even in operating under limited funds. The project now has several partners. Municipality realized the importance and significance of the project and possibilities of such promotion. The real business is yet to come.
One of the other aspects of the project is the education and understanding of EU values, business and cultural aspects of Serbia wishes for EU membership. The project has the mission to close in EU to common people. The strength of changes and development lies in peoples believes that such path can bring development and improvement of their lives. For that reason the project will try, in cooperation with donors, to fund some excellent students and maybe to give some scholarships for their professional improvement.
The project office is yet planned for near opening. Considering the importance of such initiative the project seeks support from foundation grants and corporate gifts.
The project team has great plans for further development and activities