New criteria for foreign investor subsidies

The Serbian government has amended the Decree on determining the criteria for awarding incentives to attract direct investments, raising the threshold for the required minimum investment.

Namely, in order for investors to be able to count on the state’s help, they need to invest a minimum of EUR 300,000, instead of the previous EUR 100,000. Also, the amended decree abolished the division of local self-governments according to the development level. Now, the territory of Serbia is divided into five regions – Belgrade Region, Vojvodina Region, Šumadija and Western Serbia Region, Southern and Eastern Serbia Region and Kosovo and Metohija Region.

Investors in the Belgrade region can count on state incentives if they plan to invest a minimum of EUR 500,000 and employ at least 50 workers, while this threshold is lower for Vojvodina, requiring an investment of EUR 400,000 and the creation of 40 jobs.

In Šumadija and Western Serbia, Southern and Eastern Serbia, as well as in Kosovo and Metohija, the state will support those investment projects where an individual investment amounts to at least EUR 300,000 and entails the employment of at least 30 workers for an indefinite period.

The new regulation also stipulates that for investments exceeding EUR 5 million, the deadline for the completion of an investment project is up to 10 years from the date of submission of the application for the allocation of funds.

In the future, investors will be entitled to have the state cover 20% of the justified costs of the gross salary per employee, and a maximum of EUR 2,000 if they plan to invest in the Belgrade region. For new employees in Vojvodina, 25% of the justified expenses of the gross salary will be covered, with a maximum of EUR 3,000 per employee.

In the regions of Šumadija and Western Serbia, Southern and Eastern Serbia and Kosovo and Metohija, future investors will be entitled to 30% of justified expenses of gross earnings, and the limit is EUR 5,000 per employee.

As per the Regulation that was in force until now, investors could receive a maximum of EUR 7,000 for every new job they created in what was classified as an economically devastated area.

The amended regulation especially focuses on technologies with minimal impact on the environment and clearly defines what constitutes an investment project with minimal impact on the environment.

“Technologies with minimal impact on the environment are technologies of renewable energy sources, storage of electrical and thermal energy, heat pumps, network technologies, technologies of renewable fuels of non-biological origin, technologies of sustainable alternative fuels, electrolytic and fuel cells, advanced technologies for energy production through nuclear processes with minimal waste from the fuel cycle, carbon capture, utilization and storage technologies, and energy efficiency technologies associated with the energy system”, the regulation states.

(Biznis i Finansije, 24.05.2023)

This post is also available in: Italiano

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