Since the onset of the war in Ukraine in February 2022, Serbia has seen a significant influx of Russian migrants, primarily from the middle class. An estimated 220,000 Russians have relocated to Serbia, and they now lead foreign investments in real estate and business ventures. Recent data indicates that since the beginning of 2022, nearly 1,919 companies with majority Russian ownership have been established, while around 8,000 Russian entrepreneurs are now registered in the country. These businesses range from IT companies to restaurants and bookstores, contributing to Serbia’s economy through consumption and tax payments.
Reasons for choosing serbia
Russians are drawn to Serbia for several reasons, including a favorable 15% income tax rate, extensive transportation corridors, direct flights to European destinations, and linguistic similarities. Despite the advantages, statistics reveal that 91 Russian-owned companies have closed in the past two years—25 last year and 66 this year.
Real estate market influence
The presence of Russian migrants has also impacted Serbia’s real estate market. Housing prices in Serbia, particularly in Belgrade, have risen, with new construction averaging around €2,000 per square meter. Nevertheless, many Russian expatriates continue to invest in property, making them the leading group of foreign buyers. Recent figures from the Republic Geodetic Institute show a more than 10% increase in Russian real estate purchases in the last two quarters, totaling about €85 million. Preferred locations include Belgrade, Novi Sad and Subotica.
Long-term residency
Mihail Arandarenko, a professor at the Faculty of Economics in Belgrade, notes that the initial perception was that Russians would stay temporarily, but it has become evident that many are planning for the long term. Increasing numbers are arriving not just to escape the war but also to pursue business opportunities in Serbia. With ongoing sanctions against Moscow, Russian entrepreneurs see Serbia as a viable location for establishing their businesses, particularly in the IT sector.
Economic contributions
Russian immigrants positively influence Serbia’s economy by spending money and paying taxes. Many have established businesses that contribute to GDP growth. Arandarenko emphasizes that while some Russian-owned companies have closed, this is a typical market process and not necessarily indicative of a broader trend of departure.
Real estate dynamics
Uroš Đaković, a partner at Blok Propertyis, points out that while Russian buyers have a limited role in purchasing apartments in new buildings, their substantial demand for rentals has driven up rental prices. The surge in rental demand has made investment in rental properties increasingly lucrative.
Moreover, several Russian companies are exploring opportunities in Serbia’s real estate sector. Currently, nine investors from Russia are seeking partnerships to identify suitable construction sites and navigate the local housing market. These investors view the Serbian market positively and are interested in long-term commitments rather than temporary investments linked solely to the war in Ukraine.
Investment challenges
However, access to financing poses a challenge for Russian companies looking to invest in real estate. Many banks are hesitant to support projects due to the investor’s nationality, forcing these companies to finance projects entirely on their own, which limits their investment potential.
