Serbia attracts 40% more foreign investments in 2019 – Tax and contribution exemptions a good signal for investors

Serbian Finance Minister Sinisa Mali has stated that the British Financial Times ranks Serbia as number one in attracting direct foreign investments.

– Financial Times ranks Serbia as number one in attracting direct foreign investments. In the first month of this year, we have over 40% more foreign investments than in the same period last year – Mali said on TV Studio B.

The minister also talked about the 2020 budget and said that he would go the the National Assembly on November 20 to argue in favor of the budget, 45 laws and tax exemptions meant to improve the the business environment in the country.

– We have a set of budget laws before us, and two elements are important, primarily tax and contribution exemptions for the economy. Last year, taxes and contributions accounted for 63%, and we reduced it to 62%. Next year we're reducing it to 61% – Mali said.

According to him, this will “cost” the state RSD 13.1 billion, but will act as an incentive to free the economy of this burden and put the money in new employments, salary raises and procurement of equipment.

– That is also an important signal for investors as well – Mali said.

Another important new feature, the minister says, is that the Law on Personal Income Tax will define a large number of incentives for employment.

– If you've recently graduated from a faculty or a school and you are looking for a job or starting a business, there are no taxes or contributions to your salary, which is the state's way of inciting you to start working. For companies, if an employee is coming from abroad, the contributions are 30% instead of 100% – Mali said.

He says that the budget was made so that a part goes to raising salaries and pensions, whereas another part is to be put into capital investments, amounting to RSD 260 billion.

– For the third year in a row, we are raising the salaries in the public sector and I do believe when everything is added up that the raise amounts to 45% in the past few years. From January 1, pensions will be calculated using the so-called Swiss formula at 5.4%, depending on the inflation and the growth rate of the average salaries – the minister said.

Ministarstvo finansija Republike Srbije

Narodna skupština Republike Srbije

Siniša Mali

investments in Serbia

direct foreign investments

budget for 2020

taxes and contributions

tax exemptions

salary raises

employment

Law on Personal Income Tax

pension raises

salaries

pensions