On 2 June 2023 the Regulation on Amendments and Supplements to the Regulation on Determining the Criteria for Granting the Incentives for Attracting Direct Investments entered into force (hereinafter: the Regulation).
The aim of the Regulation is to adjust the conditions for exercising the right to incentives that attract direct investment to the Republic of Serbia, by determining higher amounts of the minimum investment necessary for the investor to exercise the right to the incentive, as well as to further stimulate employment by providing greater incentives to the investor who hires new employees connected with an investment project.
Key Novelties
The most significant novelty is reflected in the increase of the threshold for the minimum investment in tangible and intangible assets, which now amounts to EUR 300,000, compared to EUR 100,000, in accordance with the previously valid Regulations.
Also, the amended Regulation abolished the division of local self-government units, which were classified according to the level of development. Instead, a division by regions is introduced into the Belgrade region, the Vojvodina region, and finally the Šumadija and Western Serbia region, the Southern and Eastern Serbia region, and the Kosovo and Metohija region.
Another significant novelty is the fact that the institute “Investment of special importance for the Republic of Serbia” was abolished. For investments of special importance, the previous regulation prescribed a period of ten years for the realization of the investment project. However, the ten-year term now applies to investments that are greater than EUR 5 million, in accordance with the Regulation.
The next novelty refers to additional incentives for labor-intensive investment projects.
Under the new rules, if at least 100 new employees are employed, within the time limit set for the implementation of the project, there are numerous benefits prescribed.
Depending on the number of new employees, the beneficiary is granted an increase in the amount of the grant, namely: over 100 new employees, a 10% increase in the amount of justified gross salary costs is approved for each increase in the number of new employees; over 200 new employees, an increase of 15% of the amount of justified gross salary costs is approved for each increase in the number of new employees; over 500 new employees, an increase of 20% of the amount of justified gross salary costs for each increase in the number of new employees.
Application
The Regulation applies from 2 June 2023.
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