Serbia - Country Commercial Guide
Investment Climate Statement

This information is derived from the State Department’s Office of Investment Affairs’ Investment Climate Statement;  EB-ICS-DL@state.gov.

Last published date: 2022-01-25

The U.S. Department of State Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world.  They analyze a variety of economies that are or could be markets for U.S. businesses.

Topics include Openness to Investment, Legal and Regulatory systems, Dispute Resolution, Intellectual Property Rights, Transparency, Performance Requirements, State-Owned Enterprises, Responsible Business Conduct, and Corruption.

These statements highlight persistent barriers to further U.S. investment.  Addressing these barriers would expand high-quality, private sector-led investment in infrastructure, further women’s economic empowerment, and facilitate a healthy business environment for the digital economy.  

Executive Summary

Serbia’s investment climate has modestly improved in recent years, driven by macroeconomic reforms, greater financial stability, fiscal discipline, and a European Union (EU) accession process that encourages legal changes that improve the business climate. The government successfully completed a 30-month Policy Coordination Instrument with the International Monetary Fund (IMF) in January 2021 and is now negotiating a new stand-by arrangement. Serbia improved four places in 2020 on the World Bank’s Doing Business index and is now ranked 44th globally. Attracting foreign investment remains an important priority for the government; and in 2021 the United States and Serbia signed a new Investment Incentive Agreement that may facilitate opportunities in a variety of sectors. U.S. investors in Serbia are generally positive due to the country’s strategic location, well-educated and affordable labor force, excellent English language skills, investment incentives, and free-trade arrangements with key markets, particularly the EU. U.S. investors generally enjoy a level playing field with their Serbian and foreign competitors. The U.S. Embassy in Belgrade often assists investors when issues arise, and Serbian leaders are responsive to investment concerns. However, challenges remain, particularly bureaucratic delays and corruption, as well as loss-making state-owned enterprises (SOEs), a large informal economy, and an inefficient judiciary. Political influence on the decisions of nominally independent regulatory agencies is also a concern.

The Serbian government has identified economic growth and job creation as top priorities and has committed to resolving several long-standing issues related to consolidating market-driven capitalism. The government has passed significant reforms to labor law, construction permitting, inspections, public procurement, and privatization that have helped improve the business environment. Companies and officials have noted that the adoption of reforms has sometimes outpaced thorough implementation of these reforms. Digitizing certain functions (e.g., construction permitting, tax administration, e-signatures, and removing the previously ubiquitous requirement for ink stamps) has not yet brought a dramatic improvement in processing times and may not be consistently implemented.

The government is slowly making progress on resolving troubled SOEs. Where possible, this has been achieved through bankruptcy or privatization actions. The government plans to privatize 78 more companies and is also slowly reducing Serbia’s bloated public-sector workforce, mainly through attrition and hiring limitations that cap new hiring at 70% of the previous year’s attrition.

If the government delivers on promised reforms during its EU accession process, business opportunities will likley continue to grow in the coming years. Sectors that stand to benefit include agriculture and agro-processing, solid waste management, sewage, environmental protection, information and communications technology (ICT), renewable energy, health care, mining, and manufacturing.

Women in Serbia generally enjoy equal treatment in business, and the government offers various programs to support women’s businesses. Starting in 2017, a Serbian government program provides approximately 1 million USD annually in grants from the government budget to support women’s innovative entrepreneurship.

Investors should monitor the government’s implementation of reforms, as well as its changing investment incentive programs.

To access the ICS, visit the U.S. Department of State Investment Climate Statement website.