Source: eKapija | Monday, 11.05.2015.| 13:53
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Bypass totaling RSD 6,5 billion - Return of subsidies to investors is essential but only for a short period of time

For new 800 people whom they will hire by 2017, American NCR received from the Serbian government EUR 4 m. The company which is a global leader in production and sale of devices for money transactions is the first investor which received subsidies of the state for new positions. By the end of 2015, a total of RSD 6,5 m was set aside for incentives.


Apart from new Regulation on terms and methods of attracting direct investments which has recently been adopted by the Government, the state prepared the Draft to the Law on investments to create better business environment for investors which should enter the Assembly in June.

The Ministry of trade says the objective of the Government’s initiatives is to correct current disadvantages, ensure more efficient investments, provide better results and overall effects.

According to new Regulation on attracting investors, governmental support will be available to firms investing in production, services which can be subject to international trading and strategic projects and per vacancy, depending on developmental level of municipality and investment scope, companies could count on EUR 3.000 to 7.000 per vacancy. For large investors, additional incentives are planned so company which is investing EUR 50 m in production can get half of the funds from the state.


Minimal terms for subsidies decreased

- The system for assigning incentives was designed so that it stimulates mainly investment projects implemented in less developed municipalities where they need them most – the Ministry of trade says for eKapija.

New thing is that regulation recognizes two kinds of costs which are accepted as investment project costs – the first one refers to the amount of investing in fixed assets and the second to gross salaries which will be paid after project completion. The objective of the last changes , the ministry explains, was to define more precisely criteria for assigning funds which now exist bot at quality and quantity level so that system of control over execution of commitments would be more intensive and so that requests of businessmen and local self-governance would be responded when it comes to minimal terms for incentives.

The plan is to get realistic, feasible projects which users of funds will be able to implement in total “since there were cases where number of new vacancies was tense to which some of the users obliged so that they would get incentives".

Incentives only as good supplement

Sasa Djogovic from the Institute for market research thinks at this moment incentives are definitely needed but for short time.

New regulation, our collocutor thinks, is definitely better than previous ones but we cannot expect real results through incentives. . "Vitamin injection" is, he says, necessary but in order to maintain and increase investments, simulative environment should be generated. For him, it is a three-year period which implies further decrease in bureaucracy, rationalization of governmental administration, better infrastructure, decreased labor tax and etc. which would with flexible Labor law and Agreements on free trade which Serbia has should become real incentives.



- Incentives do not solve economic problems in Serbia but they are bypass for the time to provide institutional environment and create respectable market for attracting foreign investors and development of SME business. Just like in the case of Zelezara which until solving their final destiny got management – Djogovic says.

New Law on investments might help here where the Government is investing its hopes for making better investment framework for support to investments and implementation of future investments.

Special approval was given to the announcement that new law will, formally and legally, equal position of domestic and foreign investors and details important for efficient implementation of projects at levels (local, regional, national) will be defined as well so in line with that teams which will carry them out will be formed.


(Photo: Ivana Vuksa)

According to him, at the same time with attracting investors which bring capital and new technologies and modern management and exporting channels, Serbia must develop local economy as well, to support its investment potential.

Regulation on terms and methods of attracting direct investments can be downloaded here, while at this link, you can have a look at the Draft to the Law on investments.


Ivana Bezarevic

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