The Government of the Republic of Serbia adopted the Regulation on Amendments to the Regulation on Determining the Criteria for Awarding Incentives to Attract Direct Investments (“Official Gazette of RS”, no. 1/2019 and 39/2023) (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 division of local self-governments according to the level of development is abolished
A significant novelty introduced by the Regulation, unlike the previous solution where investment projects were implemented on the territory of local self-government units according to the appropriate level of development, is that incentives are provided for investment projects in the production sector that investors implement in one of the following regions: Belgrade Region, Region Vojvodina, Šumadija and West Serbia Region, South and East Serbia Region and Kosovo and Metohija Region. In order to realize the right to incentives, the investor of an investment project in the production sector in the Belgrade region must invest at least EUR 500,000, which ensures the employment of at least 50 new employees for an indefinite period of time associated with the investment project, and for each new employee, the investor is granted incentive in the amount of 20% of justified costs of gross salaries, in the maximum amount of EUR 2,000 in RSD countervalue per new employee.
For projects in the Region of Vojvodina, the investor will have to invest at least EUR 400,000 and ensure the employment of at least 40 new employees for an indefinite period of time. Funds are approved for each new employee in the amount of 25% of justified costs of gross salaries in the maximum amount of EUR 3,000 in RSD countervalue per new employee.
In the Regions of Šumadija and West Serbia, South and East Serbia and the Region of Kosovo and Metohija, the investor must allocate at least EUR 300,000 and provide employment for at least 30 new employees for an indefinite period of time, with the possibility of being granted funds in the amount of 30% of justified costs of gross salaries in maximum amount of EUR 5,000 in RSD countervalue per new employee.
