Expat Serbia

Legal framework for doing business

Recent developments in terms of new business related legislation and overall issues, current projects and announcements point towards a quickening pace of change in the general business environment over the coming months.

Serbian government has been working on introducing a more attractive legislative business environment, with a goal of bringing the legal framework in line with the EU regulations. The Government is also preparing a number of measures, soon to be legally formulated, which should untangle the present difficult liquidity situation that numerous market players are encountering. Below is a small sample list of some of the relevant legislation:

• Competition Law, generally in compliance with EU requirements, applies to antitrust provisions, including restrictive agreements and abuses of dominant positions.   
• The Law on Consumer Protection prescribes the fundamental rights and protection of the Consumer’s economic interests.   
• Law on Foreign Investment calls for equal rights of foreign and domestic investors with long-term goal of creating legal system compatible with EU legislation.    
• Law on Foreign Trade Transactions stipulates that foreign trade is liberal and without limitations for any company performing foreign and domestic trade operations.   
• Company Law regulates the set-up of business operations in general accordance with EU legislation and free market practices.

The geographical position makes Serbia unavoidable in terms of traffic. Having borderline with Hungary, Bulgaria and Romania gives possibility of production inside the European Union. At the same time, it’s possible to enjoy all the benefits of working outside the EU, while being able to provide services and transport goods in optimal time frames. Thus, Serbia offers a great transport potential and has an extraordinary potential to become the logistic base of the Southeastern Europe.
Hundreds of foreign firms from different parts of the world, large and small, are successfully operating in Serbia today. Be one of them!

Foreign trade

The Serbian Statistics Office stated that total foreign trade in the period January–June 2010 stands at:

• USD 12194.7 million, which was an 8.2% increase compared to the same period 2009;
• EUR 9201.8 million, which was a 9.0% decrease compared to the same period 2009.

Serbia achieved the highest foreign trade with EU countries (more than half of the total goods exchange).

The value of exports amounted to USD 4435.9 million, which was 18.0% increase when compared to the same period last year, while the value of imports amounted to USD 7758.8 million, which was a 3.2% increase relative to the same period last year.

Law on foreign trade (Official Gazette of RS no. 101/05) states that foreign trade is liberal and without limitations. Once registered for performing business activities, a legal entity/entrepreneur may perform foreign (as well as domestic) trade operations.

• Foreign trade contract.  A foreign trade contract is a contract made by the legal subjects, resident and a non-resident envisioning a for-profit transfer of goods, performance of works and provision of services. Parties need to be registered according to the valid regulations within their area of business. Court registration of these contracts is not mandatory.
• National treatment. The equality of domestic and foreign legal and physical persons is guaranteed. For foreign subjects that are importing or exporting to/from Serbia, the same regulations that are valid for domestic subjects are applicable. On imported goods are applied regulations valid for domestic goods except for the rules that define domestic origin of goods.
• Limitations aimed at protection of common interest. Limitations for the protection of common interests are introduced by the Serbian Government thereby defining quotas, import-export licenses and particular conditions and protective measures.
• Free trade regime. FTA with the Russian Federation and single multilateral Free Trade Agreement in the Southeast Europe – CEFTA 2006.

Italy, Bosnia, Germany and Montenegro are Serbia’s main export partners, whereby the most important export products are atomic reactors, boilers, machinery and equipment. Imports come primarily from Russia, Germany, China and Italy and are comprised chiefly of oil and gas, motor vehicles and steel. Austria is one of the largest investors in Serbia, above all in the banking, insurance and leasing sectors.