The Serbian government has abolished subsidies previously granted to employers hiring “newly settled” workers earning over 300,000 dinars (~2,500 EUR) per month. This decision was made due to an increased number of employers applying for subsidies and the rising costs associated with high-paid IT specialists.
Marko Vučetić from the Serbian IT Association (SITA) reported that several IT companies have already announced plans to relocate their operations out of Serbia, considering countries like Bulgaria, Romania, and Poland as alternatives.
These subsidies, introduced in mid-2022, targeted foreign and domestic workers who had not resided in Serbia for at least six months in the prior two years. Major IT firms benefiting from these incentives included Russian Yandex, American Luxoft (part of DXC Technology), Czech JetBrains, and American gaming company Sperasoft.
The Serbian IT sector employs nearly 69,700 people, including about 4,700 in gaming, with a significant portion of recent hires being Eastern European expatriates.
An anonymous source from a large US-based IT company with 1,000 employees in Serbia explained that the subsidies helped maintain operational costs when relocating employees from Russia. The abrupt policy reversal now threatens future growth and encourages shifting projects and hires to other countries.
The Serbian Games Association’s director, Mihajlo Džaril, emphasized that the sudden removal of subsidies damages Serbia’s reputation as a predictable and sustainable environment for tech investment.
The IT industry’s export revenue surpassed 4 billion euros in 2024, contributing substantially to Serbia’s economic growth. Industry representatives warn that losing these incentives could reduce IT service exports if companies relocate.
The subsidy scheme required companies to hire employees on permanent contracts who had not paid Serbian taxes in the preceding year, incentivizing employment of foreign specialists. Subsidies were calculated as a partial refund of payroll taxes over up to five years.
Critics argue that the government failed to engage with the industry on transitional measures before the policy change, undermining trust and damaging Serbia’s image as a tech hub.
Despite strong IT export growth—385 million euros in March 2025, a 25% increase year-on-year—concerns remain about the long-term effects of the subsidy withdrawal on the sector’s competitiveness and investment climate.
