Financial Aid and Tax Benefits

In addition to trained and cheap labor, duty-free exports to the countries of South East Europe and Russia, strategic geographical location and lowest corporate income tax in Europe of 10%, Serbia also offers financial assistance to potential investors. Investment projects in all sectors, except trade, tourism, hospitality and agriculture, can apply for grants from the state budget. The funds are intended to finance investment projects focused on production and manufacturing, services that may be subject to international trade, and research & development.

For direct investments in greenfield and brownfield projects focused on production and manufacturing, for those focused on services that may be the subject of international trade and for strategic projects in the field of tourism, grants are awarded in the amount from 2,000 to 10,000 euros per employee on an indefinite contract for the period of three years from the date of applying for funds, or for the period of two years for investment projects that involve renting business offices.

Table 1

A special financial package is provided for investments of special importance. Specifically, if the value of the investment is at least 200 million euros which will create at least 1 000 new jobs over ten-year period from the beginning of the investment, the grants will be awarded up to 20% of the total investment. For the investments amounting to at least 50 million euros which will create at least 300 new jobs over a period of ten years from the beginning of the investment, the grants will be awarded up to 20% of the total investment.

Table 2

Tax Benefits

The tax system in the country is characterized by low tax rates. The corporate income tax is one of the lowest in Europe while value-added tax and earnings tax are lower than in most countries in Central and Eastern Europe.

Table 3

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