Doing business in Serbia – Chances and risks from a industrial sector
Serbia is the state in the South-Eastern Europe, is the part of Central Balkan peninsula, it doesn’t have an exit to the sea. Serbia is a Member of the UN since 2000. On March 1, 2012 officially was acknowledged as candidate for European Union membership. The population of Serbia is 7,163,976 inhabitants.
World Bank acknowledges Serbia as an upper-middle income country. Political reforms and economic llberalization in the beginning of 2000 helped the country to experience economic growth. Today Serbia is preparing for membership in the European Union so it keeps making reforms, including reforms directed ...view middle of the document...
In 2010 the share of industrial sector in GDP was 31.8%, which is a positive indicator, if we consider the whole situation in the region of CEE-SEE and the EU. This figure is very important because the company will work within this sector.
Economic growth. Two indicators on economic growth should be considered: GDP and Global Innovation Index.
* GDP. In 2013, the it’s rate in Serbia reached US $ 5.935 per capita. This is the average in the region, but very low in comparison with the EU;
* Global Innovation Index, which in Serbia is 0,79 points, is very positive in comparison with other countries in the region and the EU and indicates a positive path of development in this direction.
The labor market. Since the company consists of employees who ensure its functioning, it is important to think on the situation on the labor market.
* Minimum wage in Serbia in 2014 was 233 euros, which is a higher than in the countriesin the region which do not belong to the EU but lower than in Slovenia (789 euro) and Croatia (398 euro). Low wages is one of the advantages of doing business in the country, as comparing to companies in the EU expemses on labor will be significantly lower;
* The unemployment rate in 2013 was the highest in Serbia after Kosovo (35.1%) Bosnia and Herzegovina (27.5%) and amounted to 22.1%. In this situation it is not a positive indicator for the economy, but for the company it will mean strong competition in the selection of staff and the possibility of hiring the best professionals in the industry.
The most important economic ratios for doing business in industrial sector in Serbia
Ratios | Meaning | Year |
GDP | 5935 | 2014 |
Index of economic freedom | 59,4 | 2014 |
Index of fiscal freedom | 83,1 | 2014 |
Index of corruption perception | 42 | 2014 |
Share of industrial sector in GDP | 31,8% | 2013 |
Global Innovation Index | 0,79 | 2014 |
Minimum wage | 233 euro | 2014 |
Unemployment rate | 22,1% | 2013 |
Tariff rate | 6,5% | 2014 |
Income tax rate | 15% | 2014 |
Corporate tax rate | 15% | 2014 |
Conclusion. Today Serbia has enough gaps in its economy to be corrected. Corruption remains one of the most problematic issues in the country. Minimum wages are very low (although in this case, the company benefits from wage...