28 November 2011According to KPMG auditing company, Serbia surpasses all regional countries in foreign direct investments, including the EU countries, Romania and Bulgaria.
Within eight months of this year, foreign investment in Serbia's economy has risen to 1.2 billion euros. That's about 560m euros more than the same period last year, in line with what financial experts predict: that 2011 foreign investments will be double 2010's.
One key attraction is favourable tax policies -- including the lowest corporate income tax rate in Europe -- which did not rise despite the financial crisis.
"In recent years, Serbia has also managed to negotiate duty free, or preferential export regimes, with countries or unions that form a single market of over one billion people, to which exports can be done with or without minimal tariff," Investment and Export Promotion Agency (SIEPA) Director Bozidar Laganin told SETimes.
The special package for foreign investors includes benefits that other countries in the region do not offer: specifically, the government pays up to 10,000 euros for every new job, or up to 20% of total investment in capital investments.
When it comes to investments of special interest, arrangements are envisioned for the transfer of land or equipment to locations at the expense of local governments.
South Korea's Yura Corporation opened three factories in Serbia in 2010, producing electrical components for the automotive industry. To employ 1,000 people in the Leskovac factory, Yura received 4.5m euros from the Serbian government. To open in Nis and employ 1,500 workers, it was 10.5m euros.
"Business conditions in Serbia are very good. For example, a factory in Raca takes one year for completion and for operations to start," Yura Corporation President Om De Jal told SETimes, adding that his company will employ 5,000 people in Serbia by the end of next year.
Serbia's investment advantage is labour. Serbian workers are not the cheapest, but investors say that they -- due to the high level of technical competence -- are a "best-buy" in the region.
Germany's Muehlbauer Holding also operates in Serbia. The company is a world leader in manufacturing technology producing identification documents, and employs about 2,000 highly specialised professionals in Europe and the United States.
So far, the company has invested 10m euros in Serbia, and now is building a technology park in Stara Pazova, intended to be the European centre for this technology. "
Serbia's advantage is a quality, professional, flexible and creative workforce, favourable trade agreements with certain countries, and rapid development in the region," the company's majority owner, Josef Muehlbauer, told SETimes.
The State Agency for Foreign Investment Opportunities currently has 83 active investment projects, and by the end of the year will bring the two more brands to Serbia, from Germany and Austria. They say these are global leaders in their sectors.
"Next year we will, I hope, realise the highest production-oriented greenfield ever in Serbia and that is something we are working on intensly, SIEPA's Laganin says.
He adds that next year the company will aggressively try to "invade" the US market, primarily through the manufacture of fine wood furniture.
World renown Austrian company Swarovski is coming to Serbia. The construction of factories starts next month in Subotica, where about 600 workers will be employed, in an investment worth 40m euros.
"This investment confirms that Serbia is the regional leader in attracting foreign investment in 2011, and this will continue even more next year," Minister of Economy Nebojsa Ciric told SETimes.
Last year Serbia also led the region in foreign investments, receiving 982m euros in investments, which was more than Croatia and Slovenia combined. In addition, in ten years only three investors suspended operations in Serbia.