Serbia and Montenegro Capital Belgrade Currency Serbian Dinar (RSD) Language Serbian Population 9.4 million EU status Applicant GDP 2006 $19.19 (excluding Kosovo) Employment 69.4% (excluding Kosovo) Exports $4.553 billion f.o.b. (excluding Kodovo and Montenegro) (2006 est.) Imports $10.58 billion f.o.b. (excluding Kosovo and Montenegro) (2006 est.)

setting up business Number of days to start business 211 Cost (% of income per capita) 1,946.7% Nonwage labor cost (% of salary) 17.9% Total tax rate (% profits) 38.9%

Serbia and Montenegro

Industry is attracting major investment

Serbia has a lot to offer investors, including a capital which is considered one of the best investment locations in southern Europe, a rapidly improving business climate and infrastructure, and a growth rate of some 6%.

Political situation

Serbia and Montenegro dissolved their union in June last year, after a referendum in Montenegro voted in favor of independence. The economies have effectively been separate since Montenegro existed as a republic in its own right during the mid-1990s, so this move should not lead to economic instability. On the contrary: in July last year, Standard and Poor’s raised Serbia’s long-term credit rating from B+ to BB-, indicating Serbia’s “improved mediumterm fiscal outlook, its diminishing political risks, and improved external indebtedness indicators”, according to the agency report.

Foreign trade in 2006 was up by 31.2% over 2005, according to the Serbian Institute of Statistics. In July last year, Standard & Poor’s Serbia is looking to sign a Stabilization and Association Agreement with the EU, which will put it on course for EU membership, becoming an official candidate country by 2008.

Who’s investing ?

Serbia saw a considerable surge in annual FDI during 2006, when it increased to some $2.39 billion, from levels of around $500 million per annum in preceding years. Investment is fragmented, but the greatest sum of investment comes from other European countries in or near the CEE region: in particular Italy, Germany, Slovenia, Austria, and Greece. US companies account for some 9% of FDI projects. Increasing numbers of international investors are looking to Serbia as a location for both manufacturing and service bases – for example, Swedish multinational IKEA is currently building a furniture manufacturing plant in cooperation with Serbian manufacturer Simpo, and will also open retail outlets in Belgrade and other major cities.

Investment opportunities

The first commercial 3G service was launched in January 2006, and the telecommunications system is still undergoing development. Likewise, IT and IT services are in an expansion phase. 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 are likely to see significant investment include medical equipment and construction. Speaking at a real estate conference in March 2006, the mayor of Belgrade said that the city was looking for between $6 to $8 billion in real estate and infrastructure investment.

Business environment

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. In 2006, Serbia ranked 68th overall in the World Bank’s listings for ease of doing business – up 27 places from 2005, showing that reforms have been having a marked positive effect on the business environment. In particular, the country’s rankings for ease of doing business across borders have improved – up 91 places.

Amcham serbia

The American Chamber of Commerce in Serbia is a prime business organization dedicated to actively promoting American best business practices, values, and responsible partnership between the United States and Serbia through trade, investment and economic development. Founded in 2001 by only 23 members, AmCham Serbia quickly grew and now includes over 170 US, European, multinational, and forward-looking local companies. It is the youngest and fastest-growing AmCham in the region representing more than 20 industry sectors.

Through years of active participation, AmCham Serbia has taken on the role of a powerful agent of change in the process of economic development in Serbia. The organization strives to be the most influential business organization in the country, a strategic business voice to the government, and a center of expertise for member companies, future members, and the business community at large. It achieves these goals through a combination of steadfast advocacy efforts, proactive communications and outreach, active networking, and quality membership.

Note: Data throughout this article refers to Serbia & Montenegro: separate data has not yet become available.

 

Contact Information

American Chamber of Commerce in Serbia
Vlajkoviceva 30/111/10
11000 Belgrade
Serbia
Tel: +381 11 334 5961
E-mail: info@amcham.yu
Website: www.amcham.yu

 

Useful websites

belgrade.usembassy.gov	US Embassy to Serbia & Montenegro
www.siepa.sr.gov.yu	Official government FDI site
www.srbija.sr.gov.yu	Government website – useful news roundup
www.invest-in-serbia.com	Business news and information
www.pa-serbia.co.yu	Privatisation agency
www.mfa.gov.yu	Ministry of Foreign Affairs

 

All pages are copyright of © Roxby Media Ltd - European American Business is a Roxby Media publication.