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ADVANTAGE AUSTRIA BELGRADE | ISSUE 3 - SEPTEMBER 2015

NEWS BULLETIN >>

MYTHS UNVEILED >>

COMPANY SHOWCASE >>

ON A DIFFERENT NOTE >>

YOU ASK, WE ANSWER >>

PREVIEW >>

SPOTLIGHT ON…>>

PUBLICATIONS & VIDEOS >>

HELPFUL LINKS >>

SUR

PRIS

INGLY

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NIOUS

ADVANTAGE AUSTRIA BELGRADE

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EDITORIAL

Dear Reader,

Early September is often called “back-to-school-time”, as

our young ones readjust to the daily routine of school life,

with homework to do and tests to be written. Business life

on the other hand seldom gets a real break, but I do hope

that you all found ways to enjoy a summer which deserved

the notion very much.

For me personally, this September is in every way a bit special: After seven years in Serbia, my term

as Head of Advantage Austria Belgrade has reached its end and I will leave the country to return to

head office in Vienna. As a result, during the past weeks my family and I have been trying hard not to

get too emotional about leaving Serbia, especially our daughter, who came to Belgrade as a 1-year

old toddler and leaves as an 8-year old school-child and “mala Srpkinja i mala Beogradjanka”, as she

calls herself.

Times like these are also an opportunity to reflect on things, and Serbia did see quite a lot of change

during the previous years: Back in 2008, Serbia was not a candidate-country to EU and Serbs needed

visas to travel to other European countries. Back then, there was no double taxation treaty with

Austria, in contrast to now. During these years, we have all witnessed some challenging economic

times, with a worldwide recession with inevitable effects also on this region.

On the other hand, some things did not change, and this in a positive way: Serbia is more committed

to its European future than ever, and Austria is still biggest foreign investor in Serbia, with 2,2 billion

EUR investment volume back in 2008 and more than 2,8 billion EUR investment volume today. In 2008,

we counted around 250 Austrian subsidiaries in Serbia, today we are approaching the 500-mark. Only

last week we could celebrate the grand opening of Swarovski in Subotica, a project where our office

can claim to have played a certain role.

Farewell-speeches and -letters usually tend to be quite long, as there is a lot to tell and many people

to thank – too many people actually to name and thank them all individually, as this would

undoubtedly fill this issue completely. Let me just say that I am deeply grateful for the support,

friendship and trust that my family and myself encountered in our time here in Serbia. We will keep

Serbia in our hearts and I do hope that our paths will cross again in the future. Please do accord to my

successor, Dr. Erika Teoman-Brenner, the same level of support as I was privileged to enjoy in the

past seven years.

All that is left for me to say is that I do hope to be seeing all of you at the handover-Austrian Business

Circle on Septemer 10th at 19:00 at Radisson Stari Mlin Hotel (if you are not registered yet, you can do

so by sending us a message HERE).

Hvala mnogo!

Andreas Haidenthaler

The Austrian Commercial Counsellor

ADVANTAGE AUSTRIA BELGRADE

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NEWS BULLETIN

OFFICIAL OPENING OF SWAROVSKI PLANT IN SUBOTICA

The Austrian company Swarovski officially opened its production plant in Subotica last week and

announced that by the middle of next year to hire another 170 workers. Swarovski is in Serbia since

the end of 2013 and employs 383 workers. The construction of the building the manufacturing plant

began in early 2014. So far, the company in Serbia invested around EUR 22 million.

Swarovski is known for its production of

decorative crystals, in 120 countries, employs

approximately 25,000 people, and decided to open

a plant in Serbia after the closure of factories in

the Czech Republic and China. Swarovski is

divided into two industrial areas, "Swarovski

Crystal", which is engaged in the production of

luxury elements and "Tyrolit Schlefmittel", which

produces tools and equipment necessary for

processing and operation.

ECONOMIC SUMMIT OF WESTERN BALKAN COUNTRIES IN VIENNA

During the Economic summit of Western Balkan countries, which took place during the Western

Balkans Conference 27 August 2015 in the Austrian Federal Economic Chamber in Vienna,

Commissioner Johannes Hahn and President of the Chamber, Christoph Leitl, stressed the

importance of deepened cooperation between Western Balkan Countries and the EU for economic

and political stability.

The summit was attended by the ministers of economy of the region,

as well as representatives of the EBRD, EIB, World Bank and

numerous Austrian company representatives. President Leitl

highlighted the role of economy to build bridges and fill up ditches.

Exemplarily for that is the good cooperation between the Chambers

of Commerce of Serbia and Kosovo.

Commissioner Hahn stressed the good progress, which has been made over the last couple of years

regarding economic and political reforms, which could not be possible without the political will of the

invidiual actors.

However, high rates of (youth) unemployment and the strong exodus of young and qualified people

from their respective home countries remain two of the big challenges ahead. All countries in the

region need in this respect a re-amplified influx of foreign investment (FDI) to boost the regional

economy. An important step could also be the implementation of dual education. For more on dual

education, take a look at our current initiatives in Serbia on page 11.

ADVANTAGE AUSTRIA BELGRADE

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"Did you know…"

that Serbia boasts a long

heritage of winemaking.

The first vinyards were

planted by the Romans and

during the times of the

Former Yugoslavia, it

belonged to the top ten wine

producing countries in the

world .

BEWARE OF BUSINESS CONTACTS WITH DAMAS INTERNATIONAL

Over the last weeks and months, ADVANTAGE AUSTRIA Belgrade was confronted numerous times by

Austrian companies, asking about the sincerity of business deals with Damas International Limited,

allegedly a company from Dubai.

The scheme: they contact Austrian trade comissions and companies with orders for food and

equipment for hotels Ambasador and Nais in Nis, and recently as well regarding the Belgrade

Waterfront project.

The names of the acting persons vary, but the company name remains the same:

Damas International Limited

Jumeirah Lake Towers

DMCC, Damas Building Block # 3

UAE DUBAI

Email: abdul-investment@@outlook.com, Karim investment@@outlook.com

Homepage: www.damasjewellery.com

IP: 192,252,214,132. Georgia, Atlanta-USA 30303

Abdulrahman

Karim Mousa

Annan Khalil Fakhreddin

After consultation with the hotel manager we can confirm that there are, however, no connections

between Damas International Limited and the projects, so we deem it appropriate to refrain from

deepening business relationships with them.

If you have further questions, please contact us at belgrad@advantageuastria.org.

2 DAYS, 500 PARTICIPANTS, 50 SPEAKERS | 1 & 2 OCTOBER 2015 | VIENNA, AUSTRIA

ADVANTAGE AUSTRIA BELGRADE

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MYTHS UNVEILED CE MARKING

Although a product has CE marking and therefore is in compliance with EU

legislation, giving the Certificate to the authorities, when importing goods to

Serbia, is not enough.

Problem: Although Serbia has recognized all EU Standards and Certificates it holds the rights to

check how the Certificates were issued. The CE marking has to be checked in local institutes

approved by the state. For this purpose it is required to present the EMC Test Report to the local

institutes – this report has been issued to the producer of the electronic goods when the product was

tested for the CE Marking. If the company can´t acquire the EMC Test Report, then the certification

can be done locally, which of course costs time and money. If the Product Number differs by one digit

or letter from the other the institute’s don´t accept the previous Certificate.

Our recommendation: Ask the producer of the electronic goods, if he can issue you the EMC Test

Report in advance, otherwise additional costs have to be taken in account. EXPORT TO RUSSIA

Sanctions imposed from EU to Russia and vice versa have hit

companies hard. Because it is not an EU-Member state Serbia

was not obliged to impose sanctions towards Russia, and also

enjoys a free-trade-regime with Russia.

In order to overcome these barriers companies from the EU

want to export their products to Russia via Serbia.

Problem: In order to export goods to Russia, these have to be of Serbian origin. In order to have

Serbian origin, it is not enough to package, clean, store etc. the goods in Serbia. These methods are

not accepted by authorities of both countries in order to have the Serbian added value of 51%

necessary for the product to be recognized as one of Serbian origin.

Our recommendation: If you find local producers which could produce the goods locally, check first

with the Serbian customs and Serbian economic chamber if the product has the necessary 51% added

value. Methods of calculating the added value differ from one product to the other.

ADVANTAGE AUSTRIA BELGRADE

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COMPANY SHOWCASE

SIE HOLDING:

STRATEGIC INVESTMENT IN TAGOR ELECTRONIC

TAGOR Electronic doo of Nis, Serbia, has received a strategic investment from System Industrie

Electronic Holding AG (SIE Holding). Together, the partners intend to continue the success story

Tagor and accelerate the company’s growth. The company will keep its core focus while investing in

its capabilities to further increase the value it adds for its existing and future customers.

Udo Filzmaier, CEO of SIE Holding explains, “TAGOR is the leading privately owned provider of

electronics components distribution and printed circuit board assembly (PCBA) in Serbia and is

currently focusing on the Balkans as its core market.”

Goran Joanovic, Co-Founder and General Manager of TAGOR ads, “We are excited to take this next

evolutionary step of Tagor together with SIE Holding. Together we see a large market demand for our

services and will be expanding deeper into the European markets.”

The company’s location in Nis, Serbia offers unique benefits, ranging from a highly competitive labor

force to the ability of custom-tariff free exporting into the EU, Russia and Turkey, due to free trade

agreements with these three markets.”

SIE-Holding, founded in 1994, is an Austrian holding company that owns, manages and develops

several entities in the electronics markets focusing medical, security and industrial customers in

Europe, the USA and Asia.

TAGOR Electronic doo was established in 1996 and focuses on Electronic Manufacturing Services

(EMS), specifically Printed Circuit Board Assembly (PCBA) as well as Electronic Components

Distribution. Tagor currently employs more then 80 people.

For further information, please contact:

Mr Sascha Österle

System Industrie Electronic Holding AG

T +43557789900

E sascha.oesterle@sie-group.com

ADVANTAGE AUSTRIA BELGRADE

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ON A DIFFERENT NOTE… After coming back from your well-deserved vacation, the masses of refugees, who are using the

balkan route to find their way to Western European countries and use Belgrade as a rest stop, might

not have gone unnoticed. It is estimated that since the beginning of 2015, 115,000 people have passed

through Serbia, and since August, about 3,000 persons are entering the country every day, among

whom children without parents and mothers with babies.

Whether matresses and blankets, baby kits, bottled water and durable food products, medicine and

hygiene products, clothes and footwear – your help is in high demand. If you feel the need to support

the thousands of unsheltered men, women and children, and look for opportunities to give, we can

recommend the two following initiatives:

Chamber of Commerce and Industry of Serbia

For any additional information on the current needs of individual reception centres in the territory of

Serbia, and the procedure of aid delivery please contact the Chamber of Commerce and Industry of

Serbia, at e-mail: bis@pks.rs or by phone: +381 11 33 00 910.

Info Centar za Azil

Info Centar za Azil was founded by regional NGOs (ADRA Srbija and Belgrade Centre for Human

Rights) and are operating under the umbrella of the UNHCR. Besides legal, psychological and social

support, they are function as collection point for contributions in kind. If you wish to bring any of the

above mentioned items, you can find the information center close to the main train station.

Adress:

Info Centar za Azil

Nemanjina 3

11000 Belgrad

EXCLUSIVE OPPORTUNITY FOR FOOD AND DRINK BUYERS! GET A TASTE OF AUSTRIA | 15 OCTOBER 2015 | VIENNA, AUSTRIA

ADVANTAGE AUSTRIA BELGRADE

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YOU ASK, WE ANSWER LEGAL CORNER | CMS REICH-ROHRWIG HASCHE SIGLE IMPORTANT DEVELOPMENTS IN AREA OF COMPETITION PROTECTION In spite of being a relatively novel discipline, Serbian competition law and practice are getting rapidly developed.

The regulator – Commission for Protection of Competition ("Commission") – equipped with extensive

authorities, is becoming increasingly active. Considering the far reaching consequences potential competition

law infringements may have for companies in Serbia (such as fines ranging up to 10% of the group turnover in

Serbia, nullity, criminal liability and damages claims) it is important to take closer look at several recent

developments in this area.

After more than five years since the Competition Protection Law came into force and gave the Commission

broad authorities, the Commission finally made use of one of them: it carried first dawn-raids ever on 9 and 10

July 2015. The subject of the dawn-raids were two companies in e-cigarettes distribution business. The

Commission had reasons to believe that the companies fixed resale prices which is a hard-core competition

infringement. The Commission's officials entered unannounced the companies' premises, inspected

documents, interrogated employees and screened IT-systems. Considering that dawn-raids represent the most

efficient investigative instrument for collecting evidences on competition law infringements and that the

Commission has been thoroughly preparing for this move last couple of years (by obtaining forensic tools,

attending trainings and exchanging know-how with other competition authorities), companies should expect and

be ready for further dawn-raids by the Commission in the time to come.

The Commission became increasingly active on another front as well, which created much frustration among

business community in Serbia in the past. Namely, the Commission made finally clear that joint bids of several

companies in tender procedures must not necessarily restrict competition, contrary to what it was arguing in

the past. Hence, in majority of cases, companies, even competitors, wishing to submit joint bids must not any

more necessarily ask the Commission for prior approval (so called "individual exemption decision").

The things seem to be changing also in the area of merger control. Namely, the Commission proposed a new

draft of the decree which prescribes the content of the merger notifications. Namely, due to very low merger

filing thresholds and the Commission's reluctance to officially apply domestic effects doctrine, many

transactions, including transactions with no ties to Serbia, have to be notified to the Commission. The proposed

new rules should make the merger notification less complicated as they introduce the possibility of short-form

notification, already well known in majority of European jurisdictions. Such short-form notification requires less

data and fewer documents than it is the case now. As it seems, the short-form notification would be applicable

for the majority of transactions usually notified in Serbia. The enactment of new rules may be expected during

autumn.

Finally, in order to enable full harmonization with the EU legislation and make the procedure more efficient, the

Commission also announced new draft of the Competition Protection Law. No proposal of the new draft has still

been made, but this may be expected end of this or beginning of the next year.

CMS Reich-Rohrwig Hasche Sigle d.o.o. Cincar Jankova 3

11000 Beograd

T+381 11 3208 900

F+381 11 3038 930

E radivoje.petrikic@cms-rhh.com

W www.cms-rrh.net

ADVANTAGE AUSTRIA BELGRADE

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TAX CORNER | LEITNER LEITNER CONSULTING PRACTICAL ASPECTS OF NEW ACCOUNTING RULES

Practical aspects of the implementation of the new accounting rules

In Serbia, there has been a change in legislation that regulates the accounting framework. The new

rules apply starting with the financial statements, which are prepared for the period ending on

31.12.2014. The key changes occurred in the field of accounting reporting for micro and small

businesses. The essence of these changes is that micro and small companies, starting from 2014 are

losing the possibility to apply International Financial Reporting Standards (IFRS). New accounting

framework allows a choice between: a) IFRS for SMEs or b) Rulebook on the method of recognition,

valuation and disclosures of items in the financial statements of micro and other legal entities (this is

not an option for small legal entities).

Practically, these changes do not take into consideration accounting and in some cases even tax

implications on micro and small legal entities. For example, capitalization of interest related to the

investment property under construction is not allowed. It is only allowed to recognize interest as

expense over the relevant period. Amount of interest that has been capitalized in past years would

need to be adjusted and disclosed as a loss of prior years. However, the increase of accumulated loss

position in prior years will not be deductible for tax purposes. The Law on Tax Procedure and Tax

Administration does not provide for the possibility of filing amended tax returns for previous years in

case of change in accounting framework and accounting policies, even though the changes in

the accounting framework can significantly impact reporting entity’s tax position.

Start of electronic submission of corporate income tax returns

According to the Law on Tax Procedure and Tax Administration as of April 1st, 2015 all legal entities*

are obliged to submit corporate income tax (CIT) returns electronically. Some difficulties for

taxpayers have arisen in practice, as the system has not foreseen the possibility of submitting

amended tax returns for years before 2014 electronically. On the other hand, Tax Administration has

no legal grounds to receive CIT returns in hard copy due to very strict provision of the Law on Tax

Procedure and Tax Administration..

* The electronic submission of CIT returns for entrepreneurs shall start on January 1, 2016.

For any further questions of how these topics might affect your business, please contact:

LeitnerLeitner Consulting d.o.o.

Kneza Mihaila 1-3, 11000 Belgrade

T +381 11 6555105

www.leitnerleitner.com

ADVANTAGE AUSTRIA BELGRADE

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PREVIEW PREVIEW

OFFICIAL HANDOVER COCKTAIL

10.09.2015 | Location Radisson Blu Stari Mlin | Belgrade, Serbia

ADVANTAGE AUSTRIA CONFERENCE SOUTH-EAST EUROPE

21.-22.09.2015 | Chamber of Commerce Upper Austria | Linz, Austria

ADVANTAGE AUSTRIA CONFERENCE SOUTH-EAST EUROPE

23.09.2015 | Chamber of Commerce Lower Austria | St. Pölten, Austria

ADVANTAGE AUSTRIA CONFERENCE SOUTH-EAST EUROPE

24.09.2015 | Chamber of Commerce Styria | Graz, Austria

ADVANTAGE AUSTRIA CONFERENCE SOUTH-EAST EUROPE

25.09.2015 | Chamber of Commerce Carinthia | Klagenfurt, Austria

DANUBE REGION BUSINESS FORUM

01 – 02.10.2015 | Austrian Federal Economic Chamber | Vienna, Austria

MARKETPLACE AUSTRIA FOOD 2015

07.10.2015 | Austrian Federal Economic Chamber | Vienna, Austria

AUSTRIAN BUSINESS CIRCLE ECONOMY MEETS SPORT

09.10.2015 | Podgorica, Montenegro

INCOMING MISSION IT CARINTHIA

14. – 15.10.2015 | Fair Carinthia | Klagenfurt, Austria

TRADE MISSION CONTRACT MANUFACTURING IN TEXTILE SECTOR

17.11.2015 | Belgrade, Serbia

… EVENT IN AUSTRIA

ADVANTAGE AUSTRIA BELGRADE

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SPOTLIGHT ON… DUAL EDUCATION One of the distinctive features of the Austrian educational system is the extensive co-operation

prevailing between the business community and educational institutions. The dual education system,

which combines theoretical and practical teaching, is applied in preparing for careers requiring

apprentice training as well as in higher vocational schools.

PRACTICE-ORIENTED EDUCATION

The dual education system, which combines theoretical and practical teaching, is applied in preparing

for careers requiring apprentice training as well as in higher vocational schools. Curriculum and

training courses are tailored to the requirements of the business world. Apprentices are

professionally trained in companies or gain on-the-job experience. The bottom line results of

research and development activities are exploited in a practice-oriented manner within the

framework of joint projects carried out by schools working together with the business community,

e.g. in theses, dissertations or student enterprises.

This two-pronged approach is considered to be exemplary throughout Europe. Foreign investors

highly value the specialized skills and the sound, fundamental know-how of Austrian employees.

Austria boasts a comprehensive network of tertiary

educational institutions. This includes a total of 21

universities of applied sciences, 22 public universities and

13 private universities. The universities of applied

sciences, which offer 393 different courses of study, are

particularly oriented to the requirements of the business

community and maintain intensive contacts with the

industrial sector. More than 47% of the study programs

offered by universities of applied sciences comprise extra-

occupational studies.

CAREER-ORIENTED NATURE OF THE EDUCATIONAL SYSTEM

In addition to its practice-oriented approach, the Austrian educational system considers specialization

to be a top priority. Students continually have the opportunity to gain a high level of specialized know-

how, whether in commercial or technical secondary schools or colleges. For example, the College for

Mechanical Engineering offers more than ten different specialized study programs.

More information required? Click on the link HERE and HERE.

DID WE CATCH YOUR ATTENTION? ADVANTAGE AUSTRIA Belgrade currently holds a survey

among its Austrian companies about the interest to

establish vocational trainings.

Interested? You find the link to the survey HERE.

For further information, please contact us via belgrad@advantageaustria.org

ADVANTAGE AUSTRIA BELGRADE

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PUBLICATIONS AND VIDEOS DID YOU KNOW…? AUSTRIA IS BUSINESS AT ITS BEST!

FRESH VIEW ON ENVIRONMENTAL TECHNOLOGY

Austria, with its extremely high innovative potential,is one of the leading

countries in environmental technology. Thanks to the verysuccessful

“green technology”, Austrian companies enjoy an excellent reputation

worldwide.Both companies and research organisations can boast a high

level of specialised know-how in sustainable construction, waste

management, innovative energy solutions and resource efficiency.

Furthermore the number of environmental patents which have been

granted in Austria is particularly high.

Environmental technology made in Austria.

Surprisingly ingenious.

Today Austrian companies in the environmental technology branch generate an annual

turnover of more than EUR 8 billion. This does not include service companies. The figure has

increased more than fivefold since 1993, around three quarters of which was earned through exports,

which have quadrupled since 19971 . There is an immense amount of research and innovation going

on in the domestic environmental technology branch: 79% of the companies claim that their

innovation is completely new on the Austrian market, 66% that this is even internationally the case2 .

The country’s high environmental standards are certainly a significant factor for this progress in

innovation and technology

Find more information on Austrian know-how in the environmental technology sector as well as

exciting cooperation opportunities in the latest edition of 156_Environmental_Technology.pdf [pdf,

6,221.5 Kb]

Link to all Fresh View Publications.

Our image video shows why Austria’s economy is

Surprisingly Ingenious.

Click here to see the video on Youtube.

ADVANTAGE AUSTRIA BELGRADE

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OTHER HELPFUL LINKS ADVANTAGE AUSTRIA OUR WEBSITE For Austrian companies in German HERE

For international partner in Serbian HERE INVESTING IN AUSTRIA Informations about investment opportunities can be found HERE

IMPORTING FROM AUSTRIA Informations about imports from Austria can be found HERE.

BEOBUILD.RS The internet portal beobuild.rs is one of the most visited websites within Serbia, with its consistent

updates, a virtual database indicating the process of a specific construction project, market analyses

and a discussion forum.

SERBIA-LOCATIONS.RS The Serbian Investment and Export Promotion Agency unified in the database locations, suppliers,

projects and municipalities, who are looking for international cooperation.

BELGRADE TALKING APP FOR IOS AND ANDROID Visiting Belgrade? Discover one of the most popular destinations in Eastern Europe and its rich

history with this all-encompassing FREE „Augmented Reality“ app.

YOU HAVE QUESTIONS OR WANT TO SHOWCASE YOUR COMPANY WITHIN THE

NEWSLETTER?

WRITE US A SHORT E-MAIL WITH THE QUESTION OR POSSIBLE TOPIC OF INTEREST AT

BELGRAD@ADVANTAGEAUSTRIA.ORG

WE ARE NOW ON LINKED ! FOR LATEST DISCUSSIONS, INFORMATION AND EVENT

DETAILS, FEEL FREE TO JOIN OUR NEW ADVANTAGE AUSTRIA IN BELGRADE GROUP!

CONTACT & SERVICE

ADVANTAGE AUSTRIA BELGRADE

NBGP APARTMANI

VLADIMIRA POPOVICA 6

11070 NOVI BEOGRAD, SRBIJA

T +381 11 301 58 50

F +381 11 711 21 30

E belgrad@advantageaustria.org

W www.wko.at/aussenwirtschaft/rs

W www.advantageaustria.org/rs

We are now on !

ADVANTAGE AUSTRIA, with its network of foreign

trade offices, is the Foreign Trade Promotion

Organisation of the Austrian economy. Under the

auspices of the Austrian Federal Economic

Chamber, ADVANTAGE AUSTRIA is Austria's largest

service provider and driver of all international

economic activities. ADVANTAGE AUSTRIA acts as an

official lobby, representing the interests of its

Austrian members both at home and abroad.

DISCLOSURE You receive this newsletter because of your country-related parameters within our database. If you do

not wish to receive any further newsletters, please write us at belgrad@advantageaustria.org.