2007. nebojša ciric. investment climate in serbia. cee-wirtschaftsforum 2007. forum velden
TRANSCRIPT
Nebojša Ciric
Vizeminister für Wirtschaft und RegionalentwicklungDeputy Minister for Economy and Regional Development,
Serbien/Serbia
Investment Climate in Serbia
Ministry of Economy and Regional Development
Nebojsa Ciric, Assistant MinisterNebojsa Ciric, Assistant MinisterVelden, September 19Velden, September 19thth 2007 2007
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Serbia at a Glance Serbia at a Glance
Continuous stabilityContinuous stability Market access and market potentialMarket access and market potential
Industrial development, sourcing opportunitiesIndustrial development, sourcing opportunities
Valuable human capitalValuable human capital Favorable tax and investment regimeFavorable tax and investment regime
FDI track recordFDI track record
Decrees on investment and export promotion Decrees on investment and export promotion incentivesincentives
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Continuous StabilityContinuous Stability CEFTA agreement signed 2006; full enforcement planned for
September 2007
Partnership for Peace, member state since December 2006
WTO accepted Serbia’s application; working group established in January 2005, accession planned for 2008
EC declared the Feasibility study to be positive; SAA negotiations began in October 2005; candidate status planned for 2008
Completed extended arrangement with the IMF in February 2006:
“Growth will remain robust”
S&P Credit rating:
BB-, Stable outlook
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Macroeconomic environmentMacroeconomic environment
All-time record foreign currency All-time record foreign currency reserves amounting to $12 billionreserves amounting to $12 billion
Decreasing public debt standing at Decreasing public debt standing at less than 30% of GDPless than 30% of GDP
Robust GDP growth averaging 7.2% over the past three yearsRobust GDP growth averaging 7.2% over the past three years
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Regulatory Activities
More than 260 laws passed since March 2004More than 260 laws passed since March 2004
Majority related to economic environment:Majority related to economic environment:
Bankruptcy (avg. 7 years -> 1 year)Bankruptcy (avg. 7 years -> 1 year) Business Registration (51 day -> 5 days )Business Registration (51 day -> 5 days ) Company LawCompany Law A package of tax laws, including VATA package of tax laws, including VAT
Constitutional changes and privatization of industrial land Constitutional changes and privatization of industrial land expected in the near future, as a result of a new Constitution expected in the near future, as a result of a new Constitution adopted in November 2006.adopted in November 2006.
““Serbia is Number One Business Reformer in the World”Serbia is Number One Business Reformer in the World”World Bank, Doing Business 2006World Bank, Doing Business 2006
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MaMarket Accessrket Access
Serbia is in the center of CEFTA – duty Serbia is in the center of CEFTA – duty free access to 30 million people marketfree access to 30 million people market
Autonomous Trade Measures granted by Autonomous Trade Measures granted by the EU in December 2000, provide for the EU in December 2000, provide for duty free exports to the EU duty free exports to the EU
The only country outside the CIS that has The only country outside the CIS that has an FTA with Russian Federation - market an FTA with Russian Federation - market of 150 mil. people. of 150 mil. people. Limited number of exceptions: complete Limited number of exceptions: complete vehicles, confectionery, some alcoholic vehicles, confectionery, some alcoholic beveragesbeverages
Customs operations have been improved Customs operations have been improved by electronic database, electronic by electronic database, electronic declarations, and imports & exports time declarations, and imports & exports time drastically shortened (from 44 to 12 drastically shortened (from 44 to 12 days, and for exports from 32 to 11 days, days, and for exports from 32 to 11 days, respectively) respectively)
Import Duties: 0- 30%, average rate 8.5% Import Duties: 0- 30%, average rate 8.5% (excl. agricultural products 7.5%)(excl. agricultural products 7.5%)
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Sourcing Opportunities Decades of cooperation with International companiesDecades of cooperation with International companies
JVs, licensing and other partnership forms JVs, licensing and other partnership forms
Automotive component, textile, electronics, food and Automotive component, textile, electronics, food and beverages, and IT industry leading the waybeverages, and IT industry leading the way
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Financial SectorFinancial Sector 23 Foreign Banks & 15 Domestic Banks 23 Foreign Banks & 15 Domestic Banks Credit Agricole, Credit Agricole, Societe GeneraleSociete Generale, UniCredit Bank, , UniCredit Bank, HVB Bank, Hypo Alpe-Adria-Bank, HVB Bank, Hypo Alpe-Adria-Bank,
LHB Bank, LHB Bank, Alpha Bank, EFG Bank, Erste Bank, Komercijalna Banka, Aik banka, Citi Alpha Bank, EFG Bank, Erste Bank, Komercijalna Banka, Aik banka, Citi Group…Group…
14 Leasing Companies14 Leasing Companies
17 Insurance companies17 Insurance companies
4 open-ended investment funds4 open-ended investment funds
1,795 companies are listed on the Belgrade Stock exchange1,795 companies are listed on the Belgrade Stock exchange
International Financial Institutions eager to co-finance private sector International Financial Institutions eager to co-finance private sector projects: EBRD, IFC, …projects: EBRD, IFC, …
Investment and Export Insurance: Investment and Export Insurance: World Bank/ MIGA, OPIC, Exim Bank, Hermes, Kontrollbank, COFACE, World Bank/ MIGA, OPIC, Exim Bank, Hermes, Kontrollbank, COFACE, SACE, SACE, Serbian Export Credit Agencies – SMECA, AOFISerbian Export Credit Agencies – SMECA, AOFI
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Credits, deposits and Credits, deposits and borrowing by banksborrowing by banks
Total savings–around €3 billion or 150 times the amount in 2000Total savings–around €3 billion or 150 times the amount in 2000
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Human Capital
Number of graduated students from universities in Serbia (1/3 from technical faculties)
Excellent base of young, educated, skilled and committed workforce that easily finds employment within multinational
companies in Serbia
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Increasing Labor Productivity
“From business standpoint, we’ve been very impressed with the quality of workforce in U. S. Steel Serbia and its sister
companies.” Mr. Michael Fedorenko, Former General Manager
U. S. Steel Serbia
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Favorable Tax Regime
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Favorable Tax RegimeFavorable Tax Regime
Lowest Individual Income Tax Rates
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Favorable Investment RegimeFavorable Investment Regime
Lowest corporate profit tax rate of 10%Lowest corporate profit tax rate of 10% 10-year tax holiday for large greenfield investments10-year tax holiday for large greenfield investments Tax relief for hiring new workers (2 year salary tax holiday)Tax relief for hiring new workers (2 year salary tax holiday) Tax credit up to 80% of investment amount for investing in fixed Tax credit up to 80% of investment amount for investing in fixed
assetsassets Accelerated depreciationAccelerated depreciation
Import of in-kind equipment is exempt from custom duties (for Import of in-kind equipment is exempt from custom duties (for foreign investors)foreign investors)
Liberalization of property laws (preparation of Law on Liberalization of property laws (preparation of Law on denationalization/privatization of urban construction land)denationalization/privatization of urban construction land)
National treatment for foreign investorsNational treatment for foreign investors Special financial incentives for new investments (2k EUR-10k Special financial incentives for new investments (2k EUR-10k
EUR per new employee)EUR per new employee)
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Privatization process - Privatization process - summary summary
2002-2007
(000EUR)
Number of co’s
for Sale
Total Number of
co’s
Sold
Success
Rate
Number
of Employees
Book
Value
Sale Purchase
PriceInvestment
Social Program
Tenders
Auctions
Tenders & Auctions
Capital Markets
Total
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Investment opportunities Investment opportunities through privatization through privatization
75 Companies through Public Tenders75 Companies through Public Tenders
1.036 Companies through Public Auctions1.036 Companies through Public Auctions
Finalize restructuring processes in 33 Large SystemsFinalize restructuring processes in 33 Large Systems
Finalize bankruptcy procedure in 450 companies Finalize bankruptcy procedure in 450 companies
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FDI Track Record (in million USD)
Best SEE regional track record of Greenfield project realization, as per OECD data
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THANK YOU!THANK YOU!
Ministry of Economy and Regional Development
Bulevar kralja Aleksandra 1511000 11000 BelgradeBelgrade, Serbia, Serbia
Phone: +381 Phone: +381 11 11 3347-231
Fax: +381 11 3346-770
www.mpriv.sr.gov.yu