INVEST IN SERBIAINVEST IN SERBIA

SERBIA

SERBIA KEY COUNTRY DATAKEY COUNTRY DATA

Area: 88,361 km² Population: 9.5 million Capital: Belgrade (1.6 million) State form: Democratic republic President: Mr. Boris Tadic Prime Minister: Mr. Mirko Cvetkovic Currency: Serbian Dinar (RSD) GDP: $52.18 billion (2008) GDP pc: $7,054 (2008) Internet domain: .rs

SERBIA KEY DRIVERS TO FDI IN SERBIAKEY DRIVERS TO FDI IN SERBIA

Enhanced Investment Stability

Booming Market Potential

Quality Human Resources

Upgraded Transportation Infrastructure

Low Overhead Costs

Attractive Investment Incentives

Key Industries

SERBIA

National treatment of foreign companies Free transfer of financial and other assets, including profits and

dividends No industry restrictions on foreign investment Bilateral Investment Treaty with the USA in effect since 2001

ENHANCED INVESTMENT ENHANCED INVESTMENT STABILITYSTABILITY

SERBIA BOOMING MARKET POTENTIALBOOMING MARKET POTENTIAL

Duty-free access to a 1 billion people market

A member of CEFTA in South East Europe

The only country outside the Commonwealth of Independent States with a Free Trade Agreement with Russia

A preferential trade regime with the EU and USA for most products and services

FTA with Belarus signed in April; the Agreement with Turkey to take effect as of 2010

SERBIA LOW OVERHEAD COSTSLOW OVERHEAD COSTS

SERBIA LOW OVERHEAD COSTSLOW OVERHEAD COSTS

The average salary–50% of the level in CEE countries

Tax burden totaling about 65% of the net salary; reductions possible through tax incentives

The 8:1 salary ratio by specific industries; 4:1 ratio by municipalities

SERBIA Readily available workforceReadily available workforce

SERBIAATTRACTIVE INVESTMENT ATTRACTIVE INVESTMENT

INCENTIVESINCENTIVES

Financial incentives: Automotive, Electronics, IT: up to 25% of the total investment

The minimum investment amount–€200 million and 1,000 employees

Production: from €2,000 up to €5,000 per new job created The minimum investment amount–between €1 million and €3

million and 50 employees

Services: from €2,000 up to €10,000 per new job created The minimum investment amount–€0.5 million and 10

employees

R & D: from €5,000 up to €10,000 per new job created The minimum investment amount–€0.25 million and 10

employees

SERBIAATTRACTIVE INVESTMENT ATTRACTIVE INVESTMENT

INCENTIVESINCENTIVES

Tax incentives: A 10-year corporate profit tax holiday for investment over €7

million and 100 employees Corporate profit tax reduction up to 80% of the fixed assets

investment Corporate profit tax reduction of 100% of the gross salary for

new employees Salary tax exemptions for employees under 30 and over 45

years Social insurance charges exemptions for employees under 30

and over 45 years Customs-free imports of equipment based on foreign

investment

SERBIA ROBUST RECENT GROWTHROBUST RECENT GROWTH

SERBIA

The most extensive tradition in

automotive industry in the region –

1939

Availability of design, engineering,

manufacturing, testing and

maintenance companies : Zastava

OEM

Experienced and well trained workers

Cooperation and production experience

with EU and USA based companies :

Fiat, GM, FORD, PSA, etc

Perspective sectorsPerspective sectorsAutomotiveAutomotive

SERBIAPerspective sectorsPerspective sectors

AutomotiveAutomotive

Engine components mostly not assemblies -flywheels, valves, camshafts (significant inflow of FDI)Plastic and rubber parts – various exterior and interior parts (mostly produced by domestic companies)Electrical and electronic – mostly wire harness but also batteries and starter motors (significant inflow of FDI)

SERBIAPerspective sectorsRenewable Energy

Biomass63%

SHPP10%

Solar17%

Geothermal5%

Wind5%

Potentials

(Mtoe)

Biomass 2.40

SHPP 0.40

Solar 0.64

Geothermal 0.20

Wind 0.19

TOTAL 3.83

SERBIA Serbia ICT - Overview

• Over 2,300 ICT companies currently operate in Serbia

• More than 60,000 people employed in the sector

• Telecom market revenue around 1.47 billion EUR and IT market revenue around 460 millions EUR in 2007

• Market share of the GDP was around 4.7% in 2007

• More than EUR 1.5 billion invested in Serbia’s ICT sector over last 5 years

SERBIA Electronics

• Intensive development of embedded electronics and EMS (electronic manufacturing services) sectors

• Embedded.rs – Electronics industry cluster established in 2008 (currently 12 members and expending)

• Over 1700 registered companies in electronics industry covering sectors such as  production of electrical material and material for electro-installation, home appliances, medical electric equipment, telecommunications, computers and informational technologies, systems of technical protection

• SEE electronics market value in 2008 over 10 billion

SERBIAElectronics-regional

competitiveness•

SERBIA Textile and Clothing Industry•Long standing tradition of Textile industry

•High quality goods at competitive prices

•Quick Delivery and Minimum Orders

•Competitive labor costs with the industry average

at € 180

•Investment opportunities in primary production

(more than 70% of raw materials used in textile and

garment production are imported)

•Fashion industries of France, Italy and Germany

use Serbian production capacities (Zara, Mango,

Benetton, Tommy Hilfiger, Hugo Boss)

SERBIALeather and Shoe Industry in

Serbia

•Great tradition in shoe production

industry and is well known for its

results (Salamander, Bata, etc.)

•The latest fashion trend delivery due

to geographical proximity to other

markets

•International fashion industries have

repeatedly used production capacities

in the country (production for Prada,

Gucci, Janet & Janet, Nero Giardini,

etc.)

•Competitive labor prices with the

industry average at € 180

•Almost 70% of the total industry

export goes into EU countries

SERBIA Food and Wine

In figures : 5 115 000 ha of Agricultural Land 4 253 000 ha of Arable Land 67 000 ha of Vineyards 778 961 agricultural estates 90 % share of privately owned arable land 529 326 people permanently employed in Agriculture sector 10.82 % share of agriculture in GDP

SERBIA Food and Wine

Fruits No of treesPlanted area (ha) Average yield (kg)

Annual production (t)

Plums 42.600.000 14,4 650.000

Raspberries   14.700 5.800,0 85.000

Apples 15.500.000 15,5 245.000

Cherries (sweet) 1.800.000   16,8 29.000

Cherries (sour) 10.000.000 12,9 100.000

Peaches 4.000.000   15,3 63.000

Strawberries 8.000 4.800,0 38.000

Apricots 1.700.000   14,0 22.000

Vegetables No of treesPlanted area (ha) Average yield (kg)

Annual production (t)

Cabbage 21.240 13.200,0 300.520

Potato   81.172 10.400,0 843.545

Cucumber 8.755 7.070,0 62.000

Carrot   7.623 8.700,0 66.000

Watermelon 16.000 16.100,0 255.000

Onion   19.000 7.500,0 150.000

Tomato        

SERBIA Grapes and Wine

• 60 000 ha of vineyards• 345 000 tones of grapes in 2008• 193 000 000 liters of wine• International varieties: Sauvignon, Italian Riesling, Cabernet,

Chardonnay, White and Red Burgundy, Hamburg, Muscat, Afus Ali

• Indigenous varieties : Belgrade Seedless, Prokupac, Vranac, Tamjanika, Krstac, Smederevka, Dinka

SERBIA How to start

• One stop shop for enterprise registration• EUR 500 minimal capital for LLC• Up to 3 days to complete the procedure• More on Serbian Business Register web site

www.apr.gov.rs

SERBIA Investment locations

• Industrial estates in most of Serbian municipalities

• 4 Free zones operating in the moment, up to 10 to be established

• Up to EUR 10 per m2 of industrial land, 99 year lease, 4-6 months from LoI to commencement of construction works.

• World renown construction and construction material industry

SERBIA SIEPA SERVICESSIEPA SERVICES

Free-of-charge assistance in all investment project stages; the Agency specialized in Greenfield ventures

An investment portfolio in excess of €2 billion Coca-Cola, Ball Corporation, JTI, Grundfos, Knauf among major

clients

SERBIA CONTACT USCONTACT US

SERBIA INVESTMENT AND EXPORT PROMOTION AGENCY

3, Vlajkoviceva St.

11000 Belgrade, Serbia

Phone: +381 11 33 98 55 0

Fax: +381 11 33 98 81 4

E-mail: office@siepa.gov.rs

www.siepa.gov.rs