Judging by the trend in the first three quarters, foreign direct investment in Serbia almost halved last year, as gross inflows for the first nine months amounted to around €2.5 billion, compared with €3.8 billion in the same period the year before, and a record €5.2 billion for the whole of 2024.
The shortfall in investment cannot be offset even by remittances from the diaspora, which increased by 4.5% in this period and reached €4.3 billion.
That money, despite somewhat greater allocation towards property and relatively little towards entrepreneurship, still largely goes on consumption. Moreover, there is little chance that the figures, once the entire previous year is added up, will bring any significant change.
The authorities have blamed the decline in investment on global trends and political instability in the country, alluding to student and civic protests. However, foreign companies operating in Serbia cite a whole range of other causes for the investment slowdown, many of which “weigh on the conscience” of the state.
The situation is also reflected in announced lawsuits against Serbia. The Dutch-Belgian chain Ahold Delhaize has announced that it is seeking arbitration before the International Centre for Settlement of Investment Disputes (ICSID) in Washington. The company, which operates the largest retail network of Maxi and Shop&Go stores in Serbia, is entering arbitration proceedings over the margin cap of 20 per cent on three quarters of its product range, introduced by the Serbian Government last September and valid until February this year. The outcome cannot be predicted at this stage, but judging by Serbia’s track record in international disputes, there is reason for concern.
The damaged investment climate is also illustrated by Rio Tinto’s decision to move the Jadar project into the so-called Care and Maintenance (C&M) phase, meaning supervision and maintenance, which in practice amounts to a standby phase with an assessment of costs and resources. As a result, potential investments in the extended production chain, estimated at up to €15 billion – which could have propelled Serbia to the very top of Europe’s green energy transition and secured robust economic development – are now being questioned.
Both small and large
That foreign companies are reconsidering investment in Serbia was also shown by a Demostat survey, in which 200 firms were polled in early December last year and again at the end of January, using a random sample drawn from a list of 800 foreign investments recorded in the NALED database from 2000 onwards. Among the respondents were 148 companies with foreign capital and 52 with mixed capital. Categorised by size (large, medium, small and micro), region and sector, they reflect the structure of business entities in the country.
When asked how they assess the investment climate in Serbia, twice as many respondents (39%) consider it “poor” or “very poor”, compared with 17% who say it is “good”. Only 1% believe the investment environment is “very good”, while 43% opted for a “neutral” assessment.
Such an environment affects small and micro enterprises far more severely. Of the total number of respondents in that category, as many as 46.2% rated the climate as “very poor”, while among those who described it as merely “poor”, 23.1% belong to that group of firms. However, large systems are not faring much better: 38.5% of companies in that classification rated the climate as “very poor” and 34.6% as “poor”.
A “neutral” rating was given by more than half of medium-sized firms, more than a third of large companies and around 14% of small enterprises. A “good” rating was chosen by 47% of medium-sized firms, 35.3% of large companies and 17.6% of small and micro firms, while the share of “very good” responses is at the level of statistical error – 0.5%.
By sector, given that the survey was conducted in December, when the decree limiting margins in large supermarkets was already in force, it is not surprising that the highest number of those dissatisfied with the investment climate are from the trade sector, which gave a “very poor” rating in 46.2% of responses. This is followed by services with 30.8% of such responses, manufacturing with 15.4% and energy with 7.7%. In the group that rated the climate as “poor”, 50% are manufacturing firms, 23.1% from trade, 11.5% from services, 7.7% from the IT sector and 3.8% each from energy and mining.
The investment climate was described as “neutral” by 62.8% of manufacturing firms, but only 16.3% of service companies, 14% of trading firms and 2.3% each from IT, finance and construction. Among those who rated the climate as “good”, 70.6% are manufacturing firms, 11.8% trading companies and 5.9% each from services, finance and the automotive industry.
What is missing?
What should further alarm economic policymakers are the results obtained in response to the question of how firms assess the investment climate compared with the previous two to three years. In the group of companies that had previously rated the environment as “very poor”, 69.2% believe this year’s climate is “significantly worse”, 23.1% that it is “somewhat worse”, and only 7.7% that it is “approximately the same”. Among respondents who rated the investment environment as “poor”, 30.8% consider the business climate “significantly worse”, the same proportion believe it is “approximately the same”, while 34.6% say it is “somewhat worse”. Among neutral firms, 39.5% described the business climate as “significantly” or “somewhat worse”, 37.2% say it is “approximately the same”, while only every fifth respondent (20.9%) claims it is “somewhat better” or “significantly better”. For respondents who rated the overall investment climate as “good”, 58.8% consider it “approximately the same” or “somewhat better”, 11.8% believe it is significantly better, and 29.4% say it is “significantly worse” or “somewhat worse”.
For the first time, in response to the question “What are the biggest obstacles to investing in Serbia?”, political uncertainty and corruption rank highly. These two answers (in a section where multiple options could be selected) particularly dominate among firms that rated the investment climate as “very poor” — as many as 69.2% of company representatives cited this as the main obstacle. They are followed by “macroeconomic uncertainty”, “labour shortages”, “tax burdens”, administration and bureaucracy, poor communication with local authorities, and so on.
Among firms that rated the overall investment climate as merely “poor”, “macroeconomic uncertainty” dominates, cited in 61.5% of responses, followed by political uncertainty, labour shortages, corruption and tax burdens. Serbia is also criticised for the selective application of the law and for allowing products exempt from customs duties onto the market, which creates unfair competition among participants.
Firms that rated the investment climate as “neutral” are most concerned about political uncertainty, while those that opted for a good rating fear political uncertainty and labour shortages, ranking tax burdens and corruption somewhat lower (but not low enough) as obstacles.
That major investments from companies with foreign or mixed capital operating in Serbia should not be expected in the coming period was also confirmed by this Demostat survey. Ten per cent of company representatives stated that they would reduce their investments over the next three years, while as many as half of all respondents said they would maintain their current level. A moderate increase in investment is expected by fewer than one-third of companies, and a significant increase by only 6% of those surveyed.
(Biznis i Finansije, 11.02.2026)
https://bif.rs/2026/02/zasto-strane-kompanije-smanjuju-investicije-u-srbiji/