Serbia and Montenegro

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Serbia and Montenegro has been rapidly regaining its status as an attractive location for business. Unem­ployment remains high, but with GDP growth at above 6% in 2005, and expected to be at least 4% in 2006, a liberalisation of investment laws, membership of the World Bank and OECD, Serbia & Montenegro is looking increasingly attractive to companies keen to get in on the reconstruction and modernisation of the country. An FDI magazine competition in early 2006 picked the capital of Serbia, Belgrade, as “city of the future in South-east central Europe”, citing significant recent investors including Italy’s Banca Intesa, US company Ball Packaging and Germany’s Metro Cash & Carry.

Zlatibor, Serbia

Political situation

Serbia & Montenegro is currently a federation of two independent republics; 2006 is likely to be an important year for Serbia and Montenegro politically, as Montenegro is to hold a referendum on withdrawing from the union in May. At present, it looks likely that Montenegro will vote in favour of doing so, and that the UN-administered region of Kosovo will also make a push for full independence.

FDI

Foreign direct investment is still not at the levels seen in other CEE economies, but it has been increasing rapidly after falling back to almost nothing in 1999 and 2000. In 2005, the country attracted some $4.5 billion in FDI. The government aims to attract at least $2 billion of FDI over the course of 2006. In order to attain this target, the government will continue its work on simplifying investment procedure and creating an improved investment climate in the country, said deputy Prime Minister Miroljub Labus, speaking after a meeting of the European Round Table of Industrials in February 2006. These reforms continue a series of market liberalisations which had already resulted in Serbia being tipped as a leading reformer by the EBRD in 2005, with particular progress being made in banking, privatisation, market liberalisation, company management and liberalisation of trade. EBRD officials emphasised that there was still a lot of work to be done, despite the reforms, with a particular need to focus on macroeconomic stability.

Investment opportunities

Redevelopment and regeneration of businesses means that there is likely to be a lively market for IT and IT services, reports the US Commercial Service, which selected Serbia and Montenegro as its market of the month for January 2006. In March 2006, the Serbian government announced that it would be investing $1 billion in infrastructure developments, including providing and updating computer equipment in schools and government offices. Other areas that would see significant investment were medical equipment and construction. Privatisation of various state assets is ongoing, and in future, all proceeds from privatisation will be directed to public investments, announced minister of finance Mladjan Dinkic.

Company information

Part of the government’s reforms have been aimed at making it easier and cheaper to start a business. According to OECD data, it now takes 15 days to register a company in Serbia — under half the regional average.

Facts in brief

Kotor

Serbia and Montenegro’s location is South-eastern Europe, bordering the Adriatic Sea, between Albania and Bosnia and Herzegovina. Controls one of the major land routes from Western Europe to Turkey and the Near East; strategic location along the Adriatic coast

Its climate in the north is continental climate (cold winters and hot, humid summers with well-distributed rainfall); central portion, continental and Mediterranean climate; to the south, Adriatic climate along the coast, hot, dry summers and autumns and relatively cold winters with heavy snowfall inland

Industries include machine building (aircraft, trucks, and automobiles; tanks and weapons; electrical equipment; agricultural machinery); metallurgy (steel, aluminum, copper, lead, zinc, chromium, antimony, bismuth, cadmium); mining (coal, bauxite, nonferrous ore, iron ore, limestone); consumer goods (textiles, footwear, foodstuffs, appliances); electronics, petroleum products, chemicals, and pharmaceuticals

Diplomatic representation in the US — Chief of mission: Ambassador Ivan Vujacic

Diplomatic representation from the US — Chief of mission: Ambassador Michael C Polt

Contact Information

American Chamber of Commerce in Serbia and Montenegro
Vlajkoviceva 30/111/10
Belgrade, Serbia and
Montenegro
Tel: +381 11 334 5961
E-mail: info@amcham.yu
Website: www.amcham.yu

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