Why Serbia is Your Next Business Destination: 5 Compelling Reasons to Consider

Serbia has been on a steady trajectory of economic development in recent years, marked by significant reforms

23:36 24 July 2024

Serbia has been on a steady trajectory of economic development in recent years, marked by significant reforms. These reforms, which have not only reduced the national debt but also attracted foreign capital, have fostered the growth of small and medium-sized enterprises. This stable progress paints a promising and secure picture for business owners and investors.

Serbia's economic stability is underscored by its sovereign credit rating of "BB+" with a stable outlook, as assigned by international rating agency Fitch. This rating is further validated by a comparable rating from Standard and Poor’s, reinforcing the confidence in Serbia's economic environment.

If you're concerned about the potential risks, it's important to note that the challenges of doing business in Serbia are not significantly different from those in other European countries. This reassurance should instill confidence in the Serbian business environment, making it a viable option for your business expansion.

Serbia offers distinct advantages for foreign businesses, setting it apart from other European markets. These benefits, which we will delve into, are sure to pique the interest of business owners and entrepreneurs looking to expand their operations.

Why Serbia is the Ideal Place to Open Your Company: 5 Key Points

1. The Shift Toward Transparency: Serbia’s Appeal in the De-Offshorization Era

The worldwide move towards de-offshorization has led to a change in business focus, moving away from areas with low taxes and high confidentiality towards more transparent jurisdictions. Although this change may result in a short-term outflow of capital, it opens up significant long-term opportunities.

Legalization and transparency are now crucial for successful business operations. It is essential to recognize and adapt to these new factors. For instance, since the summer of 2019, Serbia has been part of the Common Reporting Standard (CRS) for the automatic exchange of financial account information. This means that foreign owners of businesses or bank accounts in Serbia can no longer hide their assets from the tax authorities of their home countries, ensuring a high level of trust and reassurance in the business environment.

However, this transparency brings additional benefits for business owners. Serbia is not included in any international black or gray lists, allowing businesses to operate without the fear of being questioned or obstructed. This enables you to conduct your business openly and confidently in leading global markets.

It's important to note that the exchange of information does not imply that all your details are publicly disclosed. A certain level of confidentiality is still maintained.

2. Serbia is Experiencing Stable Development

In August 2019, Serbia signed the United Nations Convention on International Settlement Agreements Resulting from Mediation, also known as the Singapore Convention. This step highlights Serbia's commitment to greater stability and predictability in international trade operations. According to the State Secretary of the Ministry of Justice of Serbia, this agreement will enhance economic rights and opportunities and improve the overall business environment.

The continuous improvement of Serbia's business climate is crucial for attracting foreign investments, opening new markets, expanding existing ones, and developing infrastructure and financial institutions. This positive cycle benefits everyone involved, fostering further growth and prosperity.

An excellent example is China. Leading Chinese businesses, rapidly rising to top global positions, are actively investing in local enterprises and promising projects in Serbia. Within the framework of the One Belt, One Road strategy, new labor markets are emerging in Serbia to meet the growing demand in various sectors. This situation represents significant growth potential for many companies participating in these projects.

Serbia's strategic position allows it to maintain beneficial relationships with both China and the European Union, ensuring good relations with all parties involved.

3. Serbia is Confidently Moving Toward the EU

The Serbian government has consistently expressed its desire to join the European Union, supported by concrete actions and policy decisions. While the process has been ongoing since 2012 without significant progress and occasional doubts, the overall direction is still evident.

Several EU members, especially Hungary, have expressed strong support for Serbia's integration into Europe and have promised to contribute to this goal in the near future. The EU is particularly concerned about China's increasing influence in Serbia and the country's amicable relations with Russia. This is because Serbia has not imposed sanctions on Russia and has continued its cooperation with the government.

This dynamic emphasizes Serbia's appeal to European businesses and other global players. Serbia provides a relatively fast and simple route to entering European markets. You could own a Serbian company today and potentially gain access to the entire EU market tomorrow.

For those looking to minimize national risks, it's important to consider obtaining a residence permit or pursuing citizenship and residency in Serbia. Serbia provides a strong option in this regard.

4. Serbia is a Politically and Economically Neutral Country

This country's neutrality is a significant advantage for entrepreneurs worldwide. In today's global climate, banks have the power to freeze accounts and stop business activities if an individual or entity becomes linked to sanctioned individuals or becomes subject to a new round of sanctions.

Serbia's neutral stance in international relations is a significant asset. The country maintains good relations not only with the EU but also with China and Russia, which is a difficult achievement in the current political environment.

While the EU's pressure has increased the complexity, setting up a company in Serbia still enables business transactions with almost any country in the world. 

5. Serbia Boasts Minimal Company Maintenance Expenses

The main expenses for running a company in Serbia are office rent and accountant fees. Rental prices start at EUR 2,400 per year. In 2023, the average salary in Serbia is approximately EUR 700, showing a steady increase in recent years. The country also has a large pool of highly skilled workers. Social and medical insurance contributions are minimal and quite reasonable compared to other European countries.

Additionally, Serbia benefits from low costs for electricity (thanks to self-generation), gas, and fuel (due to favorable contracts with suppliers). The corporate tax rate in Serbia is 15%, which is competitive compared to most European countries.

Conclusion

Serbia offers a wealth of opportunities for entrepreneurs looking to establish a company or branch in a dynamic and growing economy. From its respected non-offshore jurisdiction to its stable development, strategic EU ambitions, political neutrality, and minimal company maintenance expenses, Serbia stands out as an attractive destination for business ventures. If you're interested in learning more about Serbia and its potential, explore further opportunities to discover why Serbia could be the perfect place for your next business venture.