South East Europe, central Balkans; Time zone GMT+1. Geo-strategic position at the crossroads of Pan-European Corridors 7 and 10, a major link between Europe and Asia. 8 neighboring countries: Hungary, Bulgaria, Romania, FYR Macedonia, Albania, Bosnia-Herzegovina, Croatia, and Montenegro. 88,361 km² of territory – rich fertile plains in the north, ancient mountains and hills to the south. Moderate continental climate, average temperature -1°C in January and 22°C in June, well distributed rainfall.
7.5 mn consumers in Serbia, 2nd largest market in the region. 30 mn consumers in South East Europe with duty-free access. 150 mn consumers in the Russian Federation with customs-free access. Preferential trade status with USA and the EU. Overall duty-free exporting potential: 1 bn consumers.
Taxes & Incentives
State grants from €2,000 to €10,000 per new job created for greenfield/brownfield projects. 10 % corporate profit tax rate – among the lowest in Europe. 8 to 18 % VAT rate – among the lowest in CEE. 10-year corporate profit tax holiday for large investments. Tax credits up to 80 % of the amount invested in fixed assets. 5-year corporate profit tax holiday for concessions. Duty-free import of raw materials, semi-products, components, and equipment.
$13.5 bn total inward FDI inflow since 2001, 90 % average annual FDI growth rate. Serbia – The place of largest greenfield investments in SEE 2004-2006 (OECD). Belgrade – The City of the Future and top FDI location in South Europe 2006/07 (Financial Times). Major investors: Telenor, Philip Morris, Mobilkom, Banca Intesa, Coca-Cola, Microsoft, Stada, InBev, Lukoil, U.S. Steel and many others.
Labor force (age 15-64) exceeds 5 mn, 52 % with secondary or higher education. Vast labor pool – unemployment rate 21.6 % (2006). Competitive labor costs – €484 per month, gross (2007). 11. 7 % average growth of industrial productivity in the past 5 years. 700,000 university or college graduates, 1/3 from technical faculties. 42 % of the population speaks English (Gallup International).