GREEN FIELD INVESTMENTS

  Industrial zones – specific municipalities:

      Lajkovac            Bogatic             M.Zvornik                      Krupanj

      Vladimirci          Koceljeva          Loznica                         Sabac

                  --     Te rms offered by local governments for investments in these sites include:

• Lease from 10 to 99 years
• Employment incentives
• Concessions for infrastructure, power and environmental projects

             Example – Zone A - Sabac municipality

• Covers a 300 ha area, with land title, with the following characteristics:
• Modern roads, modern water supply system with secondary reticulation connections;
• Electric power supply, with the possibility of gas supply within a short time period;
• Possibility to construct a separate sewerage system for waste waters disposal with treatment facilities;
• Lots sizes are formed according to investor’s requirements; the land is leased up to a 99 year period; following construction the investor becomes the owner;
• Only industrial production that does not have a negative impact on the environment is allowed within the zone, including small production plants, services and food production (recommended);
• Construction of power and utility facilities and plans is allowed within the zone, subject to strictly defined terms related to environmental protection; as well as sports and recreation facilities.

FREE ZONE SABAC located in the city’s eastern zone along the Sava River bank, is connected to the international road network, 24 km from E-70, 6 km. from M-19 and M-21, 35 km. from railway corridor 10, and 98 km. from the Sava riverway.

The Zone covers an area of 46 ha, and the town plan envisages expansion of up to 360 ha, providing the potential for foreign companies’ investments in export oriented programs.

The existing facilities include: buildings, roads, equipment for mechanical loading-reloading, warehouses covering an area of 29,000 sq m, customs terminal on 10,000 sq m, 3 km long railway track, access roads, bypasses and other infrastructure facilities, administration premises and service workshops.

The entire complex of 15 ha is connected by an internal road network.

SABAC INTERNATIONAL PORT PROJECT

• Construction of an international port worth EUR 10 M. The port is envisaged for bulk and general cargo, Ro-Ro terminals, containers for liquid fuel terminals;
• Planned construction of two aqua-territories on 35 ha;
• All forms of investments are possible for the port;
• The local government can issue guarantees for foreign investments;

INVESTMENT STATUS

• assigns national status to foreign investors;
• allows free and unlimited disposition of profit and dividends;
• allows the right to transfer profits and assets upon obligations being met in compliance with the domestic regulations;
• guarantees against expropriation;
• allows the freedom of foreign investment into all types of activities, excluding arms production and sale, and the operation in banned zones where it is not possible to acquire the right of majority management participation;
• allows several investment forms: the establishment of own enterprise, the acquisition of shares in an existing enterprise, concessions (licenses) for the utilization of natural resources or assets for common use of up to 30 years, and B.O.T. (build-operate-transfer) as a special form of concession;
• the foreign investor's stake can be in foreign currency, goods, intellectual property rights, securities and other property rights in the local currency - CSD, which can be transferred abroad;
• allows for customs-free imports, except passengers motor cars and entertainment and lottery machines.

• The foreign investor enjoys full legal security and legal protection once the enterprise is registered with the Agency for Business Registers.

Foreign investment incentives

• Free import of commodities envisaged by the foreign investors subject to compliance with environmental protection regulations;
• The enterprise with foreign shareholders enjoys relief from taxes and customs duties;
• The law on income tax allows certain incentives to the enterprise, including specifically:
• tax incentives for concession investments;
• incentives for investments in under-developed areas;
• incentives for new employment;
• incentives for large-scale investments;
• incentives for investments in territories of special importance;
• Specific incentives for investments:
• company income tax of 10% is among the lowest;
• large investment projects worth 600 M CSD, which create 100 new jobs enjoy a 10-year tax relief;
• projects worth 6 M CSD in under-developed areas that create 5 new jobs enjoy a 5-year tax relief;
• the employment of persons 50 years of age and above would free the company from tax contributions;
• tax credits are approved in value up to 80% of the investment;
• in case of concession investments in fixed assets, tax relief is granted for 5 years;
• income tax in a newly built unit in an under-developed area is reduced over a 2-year period;
• equipment import is free from customs duty, and subject to VAT;
• VAT is reimbursable subject to the export of finished products.  

Taxes and contributions    

• Value added tax: 18% and 8% rate.   The 8% rate is applied on the following 13 products: honey, frozen products, grains, sunflower, soya, sugar beets, oil beets, all types of medicines including veterinary, livestock, services related to ticket sales, natural gas, the first transfer of housing ownership;
• Company income tax is 10%;
• Salaries are taxed at the rate of 12%;
• Contributions for social insurance:
• retirement and disability        11%,
• health insurance                  6.15%,
• unemployment                     0.75%;

LAND

The ownership of urban land in Serbia is governed by the Law of Planning and Construction with land defined in two categories: public land and other land. Public land is designated for important infrastructure purposes (schools, hospitals, roads), while other land is further divided into urban building land which is land zoned accordingly to an Urban Master Plan and land outside of urban zones.
Urban building land is ownership of Republic of Serbia and there are two types of possible legal rights on this way classified land:
• Right of use - exists where an existing building is present on the land
• Lease - if no building is present on the land
(leases on urban building land may be up to 99 years)

Ministry of Foreign Economic Relations is preparing a new Law on Land which will provide privatization of urban building land. Land outside of urban zones is private property and there are no legal obstacles for further property transferrings.