There is a lack of official data regarding Serbian companies that have established operations abroad. While local institutions do not track this information, business leaders understand the motivations behind such moves. Some companies seek to gain insights into new markets, while others pursue more favorable business conditions or meet specific job requirements that necessitate a local presence.
Currently, there are no estimates available on how many domestic companies have expanded internationally, as neither the Chamber of Commerce nor the Business Registers Agency has this information. Even business associations struggle to provide approximate figures, waiting for the Ministry of Economy to release relevant data.
Businessmen and analysts identify various motivations for expanding or relocating businesses. A primary reason is to gain a better understanding of the target market. Other companies prioritize better business conditions and lower operational costs, while some may need a local entity to secure contracts or access public funding.
Dragoljub Vukadinović, president of the Metalac Group, emphasizes that establishing a local company is crucial for controlling market dynamics, especially in large countries. For example, Metalac previously had a company in the U.S. but closed it, opting instead to collaborate with a chain of department stores. They maintain operations in Russia and Ukraine, despite challenges, and have successfully established companies in Podgorica and Zagreb. They are now looking to expand into Poland.
Vukadinović notes that many businesses, particularly in agriculture, have set up operations in Russia and Ukraine to capitalize on local markets. When reliable local partners are absent, companies may appoint their own representatives to navigate the market effectively.
In the transportation sector, there was a trend among companies to either establish new operations abroad or relocate existing ones. Aleksandar Spasić, Secretary General of the Business Association “International Transport,” explains that previously, Serbian transporters faced limitations due to permit requirements for international transport. Many chose to set up companies in Slovenia, Croatia, and Hungary as a result.
While the government has improved the permit situation, significant delays at borders remain a pressing issue. This has led many drivers and companies to relocate to countries within the EU, where they can operate more efficiently without the burdens of customs and bureaucratic delays.
Furthermore, bureaucratic hurdles in Serbia push many companies to establish themselves in more streamlined environments abroad, benefiting from electronic systems that reduce administrative burdens. This has resulted in a significant number of companies relocating operations or partially moving key functions overseas while maintaining a presence in Serbia.
In the construction sector, companies often establish local entities to comply with regulations in foreign markets. Stojan Čolakov, president of the Construction Chamber of Serbia, explains that many countries require local incorporation for bidding on contracts, while some projects may necessitate forming joint ventures with local firms.
While Serbian companies have made strides internationally, they face challenges in their domestic market. Čolakov points out that foreign companies frequently win contracts in Serbia, taking advantage of more favorable regulations that allow them to operate with limited liability at minimal costs.
Overall, the trend of Serbian companies establishing operations abroad reflects a strategic response to market conditions and operational challenges at home, driven by the need for better understanding, compliance, and efficiency in a competitive global landscape.
