Serbia business environment views of foreign investors
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Serbia business environment: Views of Foreign Investors. Ana Firtel , FIC Executive Director Milica Stefanovic, FIC Food& Agriculture Committee President. DPA/ VBT Visit Belgrade, May 2012. Agenda. Introduction to FIC General impressions SWOT general business climate

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Serbia business environment views of foreign investors

Serbia business environment:Views of Foreign Investors

Ana Firtel, FIC Executive Director

Milica Stefanovic, FIC Food& Agriculture Committee President

DPA/ VBT Visit

Belgrade, May 2012


Serbia business environment views of foreign investors

Agenda

  • Introduction to FIC

  • General impressions

  • SWOT general business climate

  • Introduction to Food& Agriculture Committee

  • SWOT food& agriculture sector

  • Conclusions


Serbia business environment views of foreign investors

Introduction

to FIC

  • business association of foreign companies operating in Serbia

  • gathers 130 companies which invested € 15,6 billion and employ 89,000 people in Serbia

  • main goal is to influence improvement of business climate by providing concrete reform proposals

  • serves as platform for joint advocacy, not individual lobbying

  • operates through working committees


Serbia business environment views of foreign investors

General impressions

  • significant improvement of business conditions in the past 12 years

  • high level of accord with EU regulations

  • still

  • finalization of structural reforms

  • problems in implementation of modern legislation

  • notable red tape and bureaucracy


Serbia business environment views of foreign investors

Serbia

Strengths

  • good geo-strategic positioning

  • accessible natural and human resources

  • country in transition with ongoing reforms

  • receptive Authorities

Example:

It takes 13 days to go through 7 steps to set up business in Serbia.

Minimum initial registered capital for LLC is less than €1, and the administrative cost is around €80.

Minimal initial capital for JSC is €260.


Serbia business environment views of foreign investors

Serbia

Weaknesses

  • underdeveloped infrastructure

  • loose regulatory framework

  • relatively high administrative burden

  • corruption issue

Example:

More than 800 new laws were adopted in past 4 years. It is difficult is install proper public structures to enable implementation.


Serbia business environment views of foreign investors

  • EU candidacy status

  • FTA network

  • potential for market growth

  • dialogue between authorities and foreign investors

Serbia

Opportunities

  • Examples:

  • Serbia has vast FTA network which includes:

    • European Union, EFTA, USA

    • CEFTA

    • Russia, Belarus, Kazakhstan and Turkey

  • Drafting of Company Law: best practice in public-private dialogue


Serbia business environment views of foreign investors

Serbia

Threats

  • macro-economic situation

  • sudden regulatory changes

  • inconsistent application of regulations

Example:

Government of Serbia adopted 70 laws and regulations in the last week of 2011, many without proper public consultations.

I.e., Government adopted the Decree fixing the margins for 5 categories of consumer products (meat, sunflower oil, sugar, flour and dairy products) up to 10% for all retailers for the period of 6 months as of 1 January 2012.


Serbia business environment views of foreign investors

Introduction

to Food&

Agriculture

Committee

  • forum for discussion on regulatory issues among representatives of member companies

  • main goal is to provide proposals and improve regulatory framework relating to the food and agriculture industry

  • key topics addressed: sanitary inspection; regulation on labeling of foodstuff; subsidies; registration of PPPS; quality standards in milk and juice production; reclassification and labeling of chemicals; livestock breeding


Serbia business environment views of foreign investors

Introduction

to Food&

Agriculture

Committee

  • gathers 32 companies: BASF, BAT South East Europe, Bayer, BPI, Carlsberg, Coca-Cola Company (Barlan S&M ), Coca-Cola HBC, Danube Foods, DuPont SRB, Japan Tobacco International, Kraft Foods, PepsiCo, Philip Morris, Rauch Serbia, Sladara Maltinex – Soufflet, Syngenta Agro.

  • Also: Alpha Bank, Bojovic Dasic Kojovic, Credit Agricole Srbija, Ecolab Hygiene, Eurobank EFG, Harrisons, Intesa Leasing, Jankovic, Popovic & Mitic, KBC Banka, Metro Cash & Carry, MMD- GLN, OTP banka, PricewaterhouseCoopers, ProCredit Bank, Schneider Electric, Tetra Pak Production


Serbia business environment views of foreign investors

F&A

Strengths

  • timely harmonization of structurally important areas with EU regulations

  • agriculture and food processing as economic activities with long lasting tradition

Example:

Serbia adopted the Law on Food Safety which is to the large extent EU compliant.


Serbia business environment views of foreign investors

F&A

Weaknesses

  • progressive law activity is not followed by adequate application:

  • lack of supportive by-laws

  • low administrative capacity

Example:

Outdated Rulebook on Labeling and Marking of Packaged Foodstuffs.


Serbia business environment views of foreign investors

F&A

Opportunities

  • strategic decision of Authorities to ensure quality standards and quality assurance

Example:

Creating basis for setting up of National Reference Laboratories.


Serbia business environment views of foreign investors

F&A

Threats

  • outdated and obsolete horizontal procedures

Example:

Pre-market sanitary inspection system, with high discretionary rights.


Serbia business environment views of foreign investors

Conclusions

  • generally positive experiences of current foreign investors

  • make Serbia a good investment destination

  • with significant potential for market growth


Thank you

Thank you

37/I Svetogorska St.11000 BelgradeSerbiatel: +381.11.303.5550fax: +381.11.303.5560

email: [email protected]

web: www.fic.org.rs


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