The growing inflation and toughening economic conditions make many companies relocate to jurisdictions where the costs are lower. For several years, Serbia has been at the top of the list of countries that entrepreneurs choose for relocation. If you are still thinking where to relocate your company, please read on to find out why exactly Serbia should be your choice.
What are the reasons for relocating your company to Serbia?
- Thanks to its unique geographical position and advanced infrastructure, Serbia is an ideal place for companies that want to work with clients in the EU, Southeastern Europe, and the Middle East.
- Free trade agreements with a large number of countries allow duty-free export.
- A stable and well-developed banking system allows making money transfers in all national currencies at low fees and commissions.
- Low operational costs such as salaries, office rent, electricity and natural gas lay the foundation for competitive advantages of Serbian companies. This is one of the key reasons why companies relocate to Serbia from other countries.
- A beneficial taxation system with low tax rates, Free Trade Zones, and treaties on double taxation avoidance.
A large number of foreign companies are already making full use of the advantages listed above. These include Michelin, Bosch, NCR, Siemens, Schneider Electric, Leoni, Microsoft, Panasonic, Syngenta, Continental, Swarovski, Toyo Tire and many others. With the SerbiaWealth web portal, you can learn about other benefits that Serbia offers to business people.
Highly beneficial geographical position of Serbia
The best part of Serbia is located on the Balkan Peninsula while its northern part is in Central Europe. Sitting between East and West, Serbia is at the crossroads of multiple highways and railroads. Serbia links Western and Central Europe with the Mediterranean region and Southwestern Asia.
‘Corridor ten’ going through Serbia connects countries from Austria to Greece. The Danube River connects ten European countries. A 3,500-kilometer-long shipping link has been established along the Danube and the Rhine-Main-Danube Canal. The route connects well-developed Northern and Western parts of Europe with the Black Sea region rich in natural resources such as oil, gas, ores, etc.
Free trade agreements
Serbia has signed free trade agreements with Southeastern Europe, the Eurasian Union, and Turkey. If you add trade on favorable terms with the EU and the USA to this list, the export potential of Serbia will be more than a billion consumers. There are exceptions and yearly quotas, but most industrial goods can be exported from Serbia duty-free.
When the free trade agreement with China comes into force, Serbia will become the third European country (together with Iceland and Switzerland) whose products have direct access to the Chinese market. This is one of the largest markets in the world.
A stable and well-developed banking system
A large number of banks work in Serbia. They offer a wide range of financial services to private and corporate customers. In addition to domestic banks, banks from Western Europe, the USA, China, Russia, Turkey, and the UAE can be found in Serbia.
Beneficial taxation system
The Serbian authorities offer various incentives to foreign investors. Up to 75% of your taxes can be refunded if you create new jobs in the country. The corporate income tax rate is only 15% in Serbia, which is considerably lower than in most EU countries. For the sake of comparison, the average tax rate in the EU exceeds 20%. The tax rate in Austria is 25%, France 26.50%, Germany 30%, Greece 24%, Italy 24%, Romania 16%, Croatia 18%, Poland 19%, and Slovenia 19%.
Serbia has 15 Free Zones where the tax regimes are even more beneficial. Resident companies are exempted from the VAT and customs duties on imported materials used in production of export goods. The earnings made in a Free Zone can be transferred to any country including Serbia without any taxes or commissions.
The average wage is much lower in Serbia than it is in other European countries
The quality of education is superb in Serbia and the personnel are highly qualified. This is especially true for the IT sector. At the same time, the salaries are considerably lower in the country than they are in the EU or the USA. The average salary in Europe exceeds € 2,000 per month and it is even higher in the EuroZone. In Serbia, however, the average salary is about € 600.
The highest salaries in Europe are paid in Switzerland (about € 5,000 per month) and then come Austria and Germany with about € 3,000. The highest personal income tax is charged in Belgium (52.6%) and then come Austria (48.7%) and Germany (48.1%). With these figures in mind, it is not surprising that many Swiss, Austrian, and German companies choose to relocate to Serbia.
Speaking about IT specialists, software engineers make between € 1,700 (in Belgrade) and € 1,200 (in Novi Sad) in Serbia. If you compare the figures with the salary of a German IT specialist, you will see that you can hire 4 software engineers in Serbia for the salary of 1 software engineer in Germany.
Low cost of office rent, electricity, and natural gas
Besides the fact that the company registration process is fast and simple in Serbia, the registered capital for LLC is only 1 euro in the country. In Serbia, and especially in Belgrade, you can find various office buildings suitable for your company office. Renting office space in the most popular districts of Belgrade will cost you € 400 per month. The area called ‘New Belgrade’ is the very center of business life in the capital city and a 30-square-meter office costs about € 600 per month there. However, an office of the same size will cost you between € 200 and €300 per month in the outskirts of the city. If you would like to save as much as you can on office space, you can use co-working facilities where a working place will cost you only € 150 per month.
The monthly cost of living (excluding rent) for one person is about € 500 in Belgrade and it is considerably lower in other regions of the country. For the sake of comparison, a person needs at least € 800 per month to survive in Austria or Germany. Even though prices have gone up in Serbia recently, they remain quite affordable anyway.
According to Eurostat, the electricity price is 5.5 times lower in Serbia than it is in Denmark or Germany. With the growth of natural gas prices, this factor is important for maintaining competitiveness of your company.
To conclude, you could hardly find another country in Europe that offers such wonderful opportunities to business people. Serbia is a unique country indeed.