Whoever is investing in Serbia in 2026 is not who was investing here ten years ago. Chinese capital now accounts for more than a third of the foreign investment stock, the European share has fallen below 40%, and the cost of labour — the historic reason for coming to the country — is losing weight fast. Here is what has replaced it.
by Biagio Carrano
On 27 May 2026, in Jiaxing, Serbia signed agreements worth more than €940 million and 1,650 declared jobs in a single ceremony. It is the largest concentrated investment announcement the country has ever recorded.
With that package, Serbia is trying to reverse last year’s trend. In 2025, gross foreign direct investment inflows came in just under €3.5 billion: down 33.5% against 2024. The net figure fell harder: €2.3 billion, down 50.5%.
In a period of considerable difficulty for the European continent, Serbia is clearly seeking to recover foreign direct investment by opening further to non-European countries. Given the historic ties between the two states, China is the first option, but not the only one. From 2020 onwards the factors that attract investment to the country have changed radically, and with them the dominant sectors and the strategies for entering the market. European investment has not disappeared, but its objectives and its logic have shifted.
Many entrepreneurs have not registered these changes, and end up planning investments on figures that are no longer current and on scenarios that have been overtaken.
The cost of labour in Serbia is no longer the main advantage
For twenty years the answer to the question “why Serbia” was essentially one: the cost of labour. That answer still has some foundation — full labour costs remain well below Croatia, Slovenia and the EU average, and the 10% flat rate of personal income tax protects net pay for higher-skilled roles — but it now has a visible expiry date.
The net minimum wage rose 9.4% in October 2025 and a further 10.1% in January 2026: the Ministry of Finance puts the cumulative 2025–2026 increase at 37% in nominal terms and 27.1% in real terms. Average net pay grew 11.3% nominally and 8.2% in real terms over the first five months of 2026. Negotiations on the 2027 minimum wage open on 15 August, and trade unions have already signalled that they will press for increases across the whole pay structure rather than at the bottom alone.
There is more, and it is the part the press releases leave out: in the established industrial zones the binding constraint is no longer the price of labour but its availability. The employment rate stands at just 50.7%, more than 100,000 foreign workers are already registered in the country, and the national average wage (€1,008 net) overstates what most employees actually earn by around 21%: the median is €794, with Belgrade, IT and financial services pulling the mean upward.
The operational conclusion: a business case built on today’s labour costs, held constant, will be unsustainable within three years.
Why invest in Serbia: the five structural factors
If the cost of labour is losing weight, why does investment keep arriving? Because other factors have consolidated in the meantime — more structural, and less subject to erosion.
Trade access to the EU without EU membership
Serbia holds free trade agreements with the European Union, CEFTA, EFTA, Turkey, Russia, China and the United Arab Emirates. Producing in Serbia means reaching more than a billion consumers on preferential terms, without the regulatory and fiscal obligations of membership. The agreement with China, in force since July 2024, is the first Beijing has signed with any Central or Eastern European country. Choosing Serbia means investing in Europe without the constraints of the European Union, and with highly efficient logistics. In a phase of geopolitical fragmentation and logistical uncertainty, sitting close to the EU market turns out to be a strategic advantage.
An open capital regime and a multi-currency banking system
No inbound investment screening mechanism, no restrictions on capital transfers for FDI purposes, no limit on foreign shareholding. Against tightening rules across Europe on all these fronts, this is an increasingly rare position. The Serbian banking system recently joined the SEPA area and opens accounts in a wide range of non-European currencies, from the Chinese renminbi to the Turkish lira, from the Russian rouble to the Japanese yen.
A 15% corporate tax rate, free zones and investment tax credits
The 15% rate comes alongside R&D deductions, fifteen free zones, an extensive double-taxation treaty network and tax credits tied to fixed investment. The tax administration has become markedly more digitalised and efficient in recent years, both in processing VAT refunds and in pursuing unpaid liabilities — which is why experienced advisers are essential to capture the full benefit of the local framework.
Serbia’s position in the European automotive supply chain
Corridors X and XI, proximity to EU assembly plants, and an automotive cluster deep enough that new entrants inherit an existing ecosystem rather than having to build one.
Belgrade, the country’s demographic and economic engine
The capital is growing on several fronts. Demographically, since 2022 it has hosted a Russian community of no fewer than 100,000 people that has integrated rapidly, while much of the Asian workforce gravitates around it and many non-EU entrepreneurs and managers have chosen the Serbian capital as their European base. The growth of professional services means Belgrade now produces roughly half of national GDP, with a per-capita index of 169 against a national average of 100.
Investment in Serbia in 2026: who is arriving, and on what logic
Serbia sits inside Europe’s economic space but outside the perimeter of EU trade defence measures. For a Chinese automotive supplier, a plant in Serbia converts a tariff problem into a logistics one. That is the logic behind Linglong, which has added €566 million in Zrenjanin. Minth is investing €135 million in Loznica in aluminium battery casings for electric vehicles — components heavy and bulky enough that shipping them from China is uneconomic, so production has to sit near the customer. And Xingyu is bringing €77 million of LED lighting modules to Niš.
The interesting variable is not nationality. It is technological content. Aluminium battery casings, LED modules, chassis systems, turbocharger automation, graphite electrodes, a €50 million supercomputer in Kragujevac built on 640 Nvidia Grace Hopper chips. The 2026 cohort is of a different nature from the assembly and textile investments of a decade ago. For an Italian supplier or engineering firm, the market to be found in and from Serbia has changed shape.
But the two smallest investments by value carry the most information. Teklas has manufactured automotive components at Vladičin Han since 2016 and obtained a permit for a further expansion in July 2026. Feller opened in Subotica four years after its memorandum with the city, has 85% of its processes already running and is weighing a second and third hall. Neither company had to be persuaded to come: both were already here and chose to commit more. Those decisions were taken by managers who have dealt with Serbian permitting, recruitment, utilities and logistics — and concluded that it was worth doing again.
The risks to check before investing in Serbia
In the first six months of 2026 the eight principal Chinese investments were worth roughly €916 million between them. Between 2010 and 2024, EU countries supplied more than 56% of all foreign direct investment registered in Serbia, but by the end of 2024 the European share of the stock had fallen to 39.6%, with China at 31.3% and closing. The current cycle depends on a single source of capital to an unusual degree.
European industry, meanwhile, is consolidating rather than expanding: some 16,000 manufacturing jobs were lost in Serbia over the past year, with the closures of Dräxlmaier and Leoni accounting for 4,000 between them. Accession negotiations have effectively stalled (22 chapters open, two provisionally closed, the last in February 2017) and in July 2026 eight member states blocked the opening of Cluster 3.
One point deserves particular attention: as the EU extends its trade defence toolkit and its anti-circumvention scrutiny of third-country goods with substantial Chinese content, rules of origin stop being a formality and become a due diligence item. A plant in Serbia assembling largely Chinese inputs for the European market does not carry the same risk profile as one sourcing regionally. The likely response is already visible: regional supply chains will be developed that cannot be labelled “Made in China”. That, in turn, opens space for new suppliers as value chains shift from Asia to Europe.
Serbia’s contradictions as investment opportunities
It is an exercise in honesty to say that the country’s contradictions represent as many investment opportunities. Some of the more significant ones:
- Serbia is now the only European country of any real economic weight outside the European Union.
- The widening gap between the affluent classes of the capital, often drawn to premium goods and services, and the poverty of smaller towns offers substantial commercial opportunities in Belgrade alongside labour costs that remain contained in the provinces.
- Established relations with China, Russia, Turkey, India, the United Arab Emirates and Saudi Arabia, however closely scrutinised in Brussels and Washington, remain a defining feature of investment and people flows into the country.
- An extremely simplified tax regime, while it increases internal disparities, is at the same time a draw for both companies and individuals.
- Legislation that is less developed in several fields, labour and environmental law among them, lags visibly behind the acquis communautaire — but affords investors a degree of flexibility, longer timelines and lower costs in adopting certain practices.
Finally, the specialised Expo of 2027, which already counts a record 119 confirmed participating countries, will place Belgrade at the centre of relations between states that are geographically and politically far apart, for three months. A rare opportunity to find new partners.
Investing in Serbia in 2026: what changes for those deciding now
Investing in Serbia can no longer be an economic fallback, a compromise or a low-cost gamble. The structural advantages are real and verifiable, but in a scenario this different from a few years ago they call for preliminary analysis tailored to the specific objectives of an investment project. In a country offering higher costs but wider opportunities than before, working out how to capture them before others do becomes the first competitive advantage.
Download the report
“How to Invest in Serbia in 2026” — 18 pages of analysis: the macroeconomic picture updated to July 2026, real labour costs by region and function, the seven factors that bring capital, the map of bilateral agreements, and twelve recent investments with the logic behind each of them.
→ Download the report free of charge
Prepared by eastCOM Consulting on the basis of reporting published by Serbian Monitor and cross-checked against primary and official sources.
Biagio Carrano is founder and Managing Director of eastCOM Consulting d.o.o. (Belgrade) and publisher of Serbian Monitor.