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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

slide2

Agenda

  • Introduction to FIC
  • General impressions
  • SWOT general business climate
  • Introduction to Food& Agriculture Committee
  • SWOT food& agriculture sector
  • Conclusions
slide3

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
slide4

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
slide5

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.

slide6

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.

slide7

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
slide8

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.

slide9

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
slide10

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
slide11

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.

slide12

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.

slide13

F&A

Opportunities

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

Example:

Creating basis for setting up of National Reference Laboratories.

slide14

F&A

Threats

  • outdated and obsolete horizontal procedures

Example:

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

slide15

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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