7 Things You Must Consider Before Moving Your Business in Serbia!
Should I invest in Serbia. Immigration services. Company Formation in Serbia. Tax Benefits For Foreign Investors in Serbia. IT Lawyers Serbia
Why Invest in Serbia?
In the previous article on our website, we wanted to draw your attention to the highly favorable conditions for establishing a company in the Republic of Serbia („Serbia“).
In this article, we will highlight many additional benefits that you may not have considered, and that are crucial to your business decisions.
To start, Serbia is one of the most favorable places for foreign investment, regularly being one of the top countries that create the most FDI jobs per million inhabitants. Two main factors are contributing to this favorable position – its geopolitical position and a strong public policy orientation towards foreign investments. In the text below, we will mention some of the policies which make Serbia an attractive investment opportunity.
Competitive Operative Costs
One of the key factors in the process of making a decision to relocate or open a business in Serbia is the low cost of day-to-day business operations, such as – electricity, gas, rental fees, salaries, and accountant services.
To give you an example, according to EUROSTAT, Serbia has one of the lowest costs of electricity and gas in Europe, as well as the lowest percentage of electricity and gas cost increase this year.
In addition, the Serbian labor force is widely regarded as high-quality and cost-effective.
Customs Free Access to 1.1 Billion Consumers
Serbian companies have customs-free access to the European Union, the Eurasian Economic Union, the USA, Japan, Australia, South East Europe, the European Free Trade Agreement members, and Turkey (in total – 1.1 billion potential consumers).
This highly increases competitiveness. For example, if you have a company registered in Serbia, its products can go customs-free into the Russia-Kazakhstan-Belarus market of around 200 million people.
15 Free Trade Zones
Today, there are 15 free trade zones operating in Serbia, which offers investors the opportunity to do business without paying customs and other import duties for goods intended for activities in the free zone, without paying VAT on the sale of goods and services in the free zone, etc.
Tax Incentives
1. Research and Development Incentive
The first tax incentive is in relation to legal entities that conduct research and development activities in Serbia as the country highly encourages innovations and new investments. Namely, expenses directly related to research and development activities performed in Serbia are tax-deductible in the double amount.
For instance, if research and development expenses are recorded in the books in the amount of EUR 15.000, they can be recorded in the tax balance in the amount of EUR 30.000 – which lowers the tax base.
2. IP Box Regime
The so-called “IP Box regime” allows taxpayers to pay a 3% rate of corporate income tax, instead of 15%, for the income they derive based on the compensation for the use of their intellectual property.
3. Tax Benefits for Employment of Foreigners
Serbia encourages the employment of highly qualified foreigners, which is why Serbian companies that employ foreign workers are entitled to incentives that are paid in the amount of 70% of the personal income tax for each newly settled person and 100% of the calculated and paid contributions for mandatory pension and disability insurance.
Low Corporate Income Tax
Even without the mentioned tax benefits, the corporate income tax in Serbia is one of the most favorable in Europe. It is paid at a flat rate of 15%.
Clean Soil and GMO Ban
Serbia is considered to be an ecologically clean area, particularly suitable for agriculture. The country is the largest agricultural market in the Western Balkans, with a strong agricultural production and food processing tradition
Additionally, Serbia is, by the power of law, a GMO-free country and a global leader in the production of non-GMO corn and raspberries.
The Serbian market offers good opportunities for foreign exporters of consumer-oriented agriculture products.
Highly Developed ICT Sector
Serbia generates around 10 percent of its GDP from the ICT sector, among the top four export sectors, along with agriculture, steel, and cars. There are over 3.000 firms in Serbia’s tech sector, employing around 50.000 people. Major employers in this sector include prominent companies such as Microsoft.
For more information on this or any other legal, tax, or business topic, feel free to write to us at office@statt.rs at any time or call us at phone number +381113281914 every working day from 08:30 to 16:30.