When will domestic investors receive equal treatment as foreign ones?

Almost half of the 100 fast-growing companies (47%) say that business conditions in Serbia in 2023 were unfavourable, which is an increase compared to the year before when 39% of them said so, the Ernst & Young Entrepreneurship Barometer survey shows.

As some of the biggest challenges, they cite inflation, growing business costs and unfair competition by companies favoured by the Serbian government.  

“I think that the subsidies that Serbia uses abundantly to attract foreign direct investments are not enough. The country needs to improve its environment for doing business and treat domestic investors the same way it treats foreign ones”, said Aleksandar Vlahović, president of the Association of Economists of Serbia.

Foreign direct investments in Serbia have been subsidised by the state for more than 15 years and over 93% of the funds have been allocated to foreign investors.

Only 2.1% of the investments have been allocated in the segment of high technologies, and in the last five years, almost 80% of the total state subsidies have been allocated to labour-intensive activities with earnings below the national average.

According to Milorad Filipovic, a professor at the Faculty of Economics in Belgrade, the value of subsidies per employee granted to foreign investors is 30% higher than those granted to domestic investors. The investment-to-subsidy ratio is higher with domestic investors than with foreign ones; foreign investors invest 43 euros for every 10 euros of subsidy while domestic companies invest 55 euros, i.e. foreign investors receive 23 euros of subsidy for every 10 euros of investment while Serbian companies receive 18 euros.

(Forbes Serbia, 29.03.2024)


This post is also available in: Italiano

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