Knezevic: New subsidy regulation in 2017

In the Serbian budget for 2017, close to 11 billion dinars has been allocated in subsidies for companies that plan to create new jobs.

As the Economy Minister, Goran Knezevic announces, the government’s aim is to have at least 20,000 new jobs created this year, with undeveloped municipalities and areas given priority in this respect.

The new job subsidies in 2017 are 3 billion dinars higher than in 2016, and, as of this year, SMEs can apply for them too. In order to qualify for the subsidies, an investor has to invest at least 100,000 EUR, and create no less than 10 new jobs.

After the uproar regarding the subsidies given to the British IT company Endava, the Economy Ministry has decided to abolish that kind of financial support to IT companies.

These are the novelties in allocation of job subsidies:

  • The minimum investment required has been lowered to 100,000 EUR and the minimum number of jobs to be created is 10. This is done with the view of enabling SMEs to apply for the subsidies too.
  • Subsidies are no longer going to be allocated to IT sector, or rather the companies that are engaged in software engineering. Also, transport, pharmaceutical, hospitality, games of chance, weapons and ammunition, retail, ship building and tobacco companies are no longer eligible for these subsidies.
  • As of this year, agricultural and fishing companies can apply for subsidies providing that they invest at least 2 million EUR and create minimum of 25 new jobs.

The Ministry has also ranked municipalities according to their development level, and those companies that invest in undeveloped areas of Serbia are going to get the biggest subsidies.

The new job subsidies range from 3,000 EUR per new job in the most developed municipalities to 7,000 EUR per new job in the least developed municipalities. The entire subsidy budget has to be used up this year.

The new subsidy regulation also stipulates covering the investor’s costs on acquiring fixed assets up to 10% of the price in the most developed municipalities, and up to 30% in the undeveloped municipalities.

The so-called “work-intensive projects”, during which an investor plans to create 200, 500, or even 1,000 new jobs, are eligible for additional subsidies that are 10%, 15%, or 20% higher respectively than the initial ones.

(Blic, 16.01.2017)

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