Agriculture has long been the mainstay of Serbia’s economy. Serbia is endowed with substantial natural resources and has Europe’s largest resource of copper. Concentrations of copper ore are located in the Carpathian Mountains near the borders with Bulgaria and Romania. Substantial amounts of iron ore also are present in this area. Northwestern Serbia, in the vicinity of the town of Krupanj, contains up to one-tenth of the world’s supply of antimony. Serbia’s southwestern upland regions have high timber and hydroelectric potential.

Manufacturing industries are concentrated in the north, particularly in the vicinity of Belgrade, which has the advantages of a long-established infrastructure, a developed labour force, the largest single market in the republic, and the greatest concentration of existing enterprises to serve as both parts suppliers and consumers of products.

In the latest period, Novi Sad, the capital of the autonomous province of Vojvodina and Niš, the third largest city in Serbia, have become sites of the rapidly developing IT industry, attracting more and more young digital nomads from all over the world.

Serbia has two international airports, located in Belgrade and Niš, which is quite enough, concerning the size of the country’s territory. The country is well connected with its neighbours through the network of recently built motorways. At the moment, there are 15 free trade zones and four science and technology parks in Serbia, with over 200 multinational companies employing more than 37,000 people.

EU

The Republic of Serbia is a candidate country for EU membership. The EU is traditionally Serbia’s key trading partner accounting for more than 60% of Serbia’s total trade in 2021.  Even without the accession process, likely due to geographic proximity and Serbia’s role as a conduit for goods from Turkey to enter the EU, the overwhelming majority of Serbia’s trade over the past twelve years has been with the European Union. Since 2005, Serbia has seen over 60 % of its exports (by value) go to the EU (surging to over 65 % in 2014, once the SAA was implemented), while imports from the EU have also consistently been in the range from 55 to 59 % of all imports.

Unlike Serbia’s trade with Russia and China, trade with the EU is much more diversified across products, with exports concentrated in machinery and transport equipment (36.6 % of all trade with the EU in 2016) but also including miscellaneous manufactured goods (13.9 %) and food, beverages, and tobacco (13.5 % in 2016 ). Imports are also spread out across several product classifications, with Serbia importing chiefly machinery and transport equipment (approximately 30 % of all imports in 2016), chemicals and related products (20.6 %), and food, drinks, and tobacco (9 %) from the EU. Import from the EU is customs-free for most of the products.

CHINA

The People's Republic of China is Serbia’s most important trade partner in Asia. In 2021, the trade volume amounted to 5.28 billion US dollars, of which exports from the Republic of Serbia amounted to 972 million dollars and imports from the People's Republic of China to 4.309 billion dollars. In 2021, the People's Republic of China was the second most important foreign trade partner of the Republic of Serbia, and this year the historical maximum of Serbian exports to the People's Republic of China was achieved.

The two countries realize very good project cooperation in the field of infrastructure and energy. From amongst the most significant projects of that kind, we would like to single out the Pupin's Bridge ( which connects Zemun and Borča ), the construction of the Miloš Veliki motorway sections, and the reconstruction of the Kostolac Thermal Power Plant.

One of the strong indicators of the close economic cooperation between Serbia and China was the establishment of the Serbian Chamber of Commerce and Industry in Shanghai in 2017.

Very soon, China-Serbia relations should enter a new phase. In favor of that claims speak the announcement of the signing of a free trade agreement between Serbia and China and the arrival of a Hainan Airlines flight from Beijing to Belgrade.

RUSSIA

Close relations between Serbia and Russia ( political as well as economic ) go back a long way. Those goods produced in Serbia, i.e. which have at least 51% value added in the country, are considered of Serbian origin and exported to the Russian Federation customs-free.

In October 2019, Serbia signed a Free Trade Agreement with the Eurasian Economic Union (EAEU), which came into force in July 2021, replacing Serbia’s bilateral FTAs with EAEU member states Russia, Belarus, and Kazakhstan.

TURKEY

Turkey is one of the 10 most important foreign trade partners of Serbia and a major investor, and there are 1,300 Turkish companies doing business in Serbia, employing approximately 10,000 workers. At the beginning of the following year, a bilateral agreement should enter into force, allowing Serbian citizens to travel to Turkey and Turkish citizens to travel to Serbia without using passports and with their national ID cards only.

Major Turkish export products to Serbia are textile, industrial machinery, road vehicles, iron and steel, metal products, electric tools, and agricultural products.

Major products that Turkey imports from Serbia are iron and steel, textile fibre, plastic and plastic products, leather, stout leather, rough fur, rubber and rubber products, vitamins, hormones, medication, vegetables and fruits, and cereals.Free Trade Agreement between Turkey and Serbia entered into Force on 1 September 2010.

Under the Agreement, both parties eliminated customs duties on imports of all industrial products. In addition to removing tariff and non-tariff barriers, the Agreement regulates many other areas, such as sanitary and phytosanitary measures, intellectual property, rules of origin, internal taxation, anti-dumping and countervailing measures, safeguards, and balance of payments measures.

 

CEFTA

The agreement on free trade in the Balkans ( CEFTA ) was signed in 2006 by Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Moldavia, Romania, Montenegro, Serbia, and the United Nations Interim Administration Mission in Kosovo in accordance with the UN Security Council Resolution 1244. By the end of 2007, the Agreement came into force in all signatory countries.

In addition to duty-free trade between member countries, the agreement specifies accumulation of product origin, meaning that products exported from Serbia are considered of Serbian origin if integrated materials originate from any other CEFTA country, the European Union, Iceland, Norway, Switzerland (including Liechtenstein) or Turkey, provided that such products have undergone sufficient processing, i.e. if at least 51% of the value added in the product is sourced in Serbia (if value added there is greater than the value of the materials used in Serbia).

THE OPEN BALKAN INITIATIVE

The ‘’Open Balkan’’ is an initiative for more intensive cooperation in the region of Western Balkans, launched in 2019. by the Republic of Serbia, Albania, and North Macedonia.

The Open Balkan initiative builds on an already achieved level of regional cooperation and trust established with the implementation of the Common Regional Market (CRM) but offers a substantial contribution to further regional integration. The Open Balkan initiative would completely abolish border controls, reducing waiting times to zero for both citizens and commerce. Additionally, the Open Balkan initiative would enable all laborers to be employed across the region with one work permit being sufficient. Therefore, the Open Balkan initiative offers more in-depth integration to those willing to pursue it whilst sharing the same goals as the CRM, namely increasing the level of intraregional economic and societal connections.

According to the data published by The World Bank, the Serbian economy recovered successfully from a mild recession in 2020 caused by the COVID-19 pandemic and grew by 7,4% in 2021. However, the war in Ukraine and ensuing sanctions imposed on the Russian Federation will have a certain impact on Serbia’s economy, which is expected to grow steadily at around 3 percent annually.

Especially on the potential of the south Serbia and Niš area in terms of foreign investments

①Niš has an international airport that connects the city with various European capitals and bussiness centers.

②The city has The Science and Technology Park which is a vast resource in the area of high technology and IT sector. Here you can find pieces of information in detail https://ntp.rs/en/nasa-prica/

③The construction of the international motorway ’’Niš-Drač’’ is in full swing. It will connect south Serbia with Albanian cost and its most important port via Kosovo ( Priština )

Especially on free customs zone ’’ Pirot ’’ 

Pirot is a city in east Serbia close to the state boundary with Bulgaria. It is well connected with Niš by a motorway built several years ago. The two cities are about 75 km apart. Free zone "Pirot" was founded in 1996.

From the beginning of its work, it has been conceived as a production zone in which the emphasis is placed on the development of production activities and the development of logistics that accompanies these activities and enables their realization.

The development of the Zone set in this way has led to the fact that the Free Zone Pirot today represents one of the leading free zones in Serbia and the region, with numerous recognitions for past work.

The Zone is a specially fenced, marked, and infrastructurally equipped area in which activities are performed under special incentives, in order to attract foreign direct investment, which should result in accelerated economic development and increased employment.

According to the Serbian Law on Free Zones, it is allowed to perform all types of activities and businesses that do not pollute the environment and do not endanger the security of the host country.

By operating in the Zone, the investor is provided with special benefits and a preferential tax regime. For instance, investors are exempt from VAT and customs duties on imports of raw materials and supplies intended to produce goods, machinery, equipment, and construction materials.

Milan S. Momcilovic, Attorney at Law from Nis, Serbia