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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. Agenda. Introduction to FIC General impressions SWOT general business climate

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Serbia business environment: Views of Foreign Investors

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  1. 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

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

  3. 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

  4. 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

  5. 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.

  6. 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.

  7. 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

  8. 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.

  9. 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

  10. 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

  11. 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.

  12. 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.

  13. F&A Opportunities • strategic decision of Authorities to ensure quality standards and quality assurance Example: Creating basis for setting up of National Reference Laboratories.

  14. F&A Threats • outdated and obsolete horizontal procedures Example: Pre-market sanitary inspection system, with high discretionary rights.

  15. Conclusions • generally positive experiences of current foreign investors • make Serbia a good investment destination • with significant potential for market growth

  16. Thank you 37/I Svetogorska St.11000 BelgradeSerbiatel: +381.11.303.5550fax: +381.11.303.5560 email: office@fic.org.rs web: www.fic.org.rs

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