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Foreign Investments

General Provisions

The Law on Investments was adopted on October 27, 2015. The long – term aim of the Government was to build legal system which would be compatible with the European Union legislation as well as to constitute legal environment which would enable various kinds of foreign entities to start their business in Serbia. Law on investments regulates general legal framework for investments in the Republic of Serbia, subjects designated to provide support or services to investors, founding and activities of Economic Developing Counsel and operations of Serbian Developing Agency. The provisions of the Law on Investments define aims of the Law as follows:

  1. Enhancing investment environment in Serbia.
  2. Providing stimulus to direct investments in order to strengthen economic development, employment  and general social warfare.
  3. Providing equal treatment for both-foreign and domestic investors.
  4.  Increasing efficiency of public authorities in providing services related to investments.
  5. creating more attractive business environment for foreign and domestic investors.

Definition of “investor” The Law on Investments defines “investor”. Investor could be any legal entity or individual that invest capital, as well as any legal entity or individual that acquired investment in the territory of Republic of Serbia. Foreign investor, as defined under the Law, shall be a person that invested capital, as well as person that acquired investment in the territory of Republic of Serbia through appropriate legal transaction and which is: foreign legal entity headquartered abroad, including a branch of legal entity registered in Serbia, foreign citizens regardless of their residence and citizens of Serbia residing abroad for more than one year. Definition of “investment” Under the term “investment”, the Law considers:

  • company or a branch founded by the investor, pursuant with law governing companies;
  • interest in company, shares of the company or other securities equivalent to shares of the company as defined under law on capital market;
  • rights acquired by the investor based on agreement on public-private partnership in line with law governing public-private partnerships;
  • ownership rights, right of easement, pledge and other rights on property located in the territory of Serbia that investor acquired for purpose of conducting business;
  • intellectual property rights protected under Serbian legislation,
  • right to perform business activity granted on the basis of licence or approval issued by the state authority, obtained for the purpose of conducting business activity in the territory of Serbia.

Foreign investor may alone, with other foreign investor and/or together with domestic investor found a new company or purchase stocks or business shares in already existing Serbian company. The forms of foreign investments are to be regulated by a founding agreement or investment agreement which shall be concluded in writing, or by decision to establish in writing. These documents must be in accordance with Company Law.

Special form of foreign investment

The Law describes special forms of foreign investment, as a possibility that a foreign investor may obtain concession for exploitation of natural resources, property in public domain or for conducting activities of general interest. A foreign investor may obtain a permission for B.O.T. (build, operate and transfer) a facility, installation or plant. These form are to be regulated in accordance with separate laws.


An investment of foreign investor may be in :

  • foreign convertible currency
  • assets
  • property rights
  • securities an other property rights.
  • in dinars, that according to foreign currency regulations may be transferred abroad, including reinvestment of profits.

Non -monetary investments are to be expressed in monetary terms. In case of establishing a company with the foreign capital, the relating provisions of the Company Law are to be fulfilled. There is also a possibility for the foreign investor to convert his/her claim into a business share or stock of the debtor company.

Rights of foreign investors

The Law describes the guaranteed rights of foreign investors, as follows:

  • The foreign investor may establish or invest in the company registered for various kinds of business activities for profit. The only restrictions relate to establishing a company in the field of manufacturing and sale of armaments, or in areas defined as restricted zones by law. In these fields it is necessary that a foreign investor establish a company jointly with a domestic legal entity, but is not allowed to acquire a majority share in such companies. It is also necessary that a foreign investor obtains an approval of the federal authorities of defense for such an investment.
  • A foreign investor enjoys equal status – means same rights and duties in respect to his investment, as a domestic legal and natural person, unless otherwise provided by the Law.
  • A company with a foreign investments has equal legal status and operates under same conditions and terms as other Serbian companies.
  • A foreign investor is granted full legal security and protection in respect of rights gained by investment. Rights of a foreign investor gained at the moment of investing are not to be the subject to changes or restriction by any eventual amendment of law and other provisions.
  • The share of foreign investor or assets of a company with foreign investment are not to be subject of expropriation, unless public interest is established by law and upon payment of compensation. Such compensation must be in accordance to the market value of the assets. Eventual change in value of expropriated object or other measure that occurs as a result of public awareness shall not affect market value that is established for paying the compensation. The compensation shall be made without delay, in convertible currency. The foreign investor is allowed to transfer it abroad with no restrictions. In case of late payment, foreign investor is entitled to interest.
  • A foreign investor may freely exchange the domestic currency to a foreign currency for any payment related to the foreign investment. The company with a foreign investment is allowed to carry out payments in international business relations freely, as well as to keep foreign currency on a foreign currency account an the bank in Serbia, which may use freely.
  • A company with a foreign investment keeps business books and financial reports in accordance with Serbian regulations, and in addition has a right to maintain the same in accordance with international accounting and auditing standards.
  • A foreign investor, after paying of liabilities under the domestic regulations, may freely and promptly transfer abroad all financial and other assets concerning foreign investments, in particular profit, dividends, assets acquired upon termination of a company, or upon termination of a contract to invest, amount gained from the sale of shares, amount gained after decrease of the capital stock of a company or other compensation and additional payments.
  • Serbian law shall be applied to foreign investments made on the territory of Serbia, unless an international or bilateral treaty provides more favorable treatment for the foreign investor. In such a case, preferential treatment shall be applied on a foreign investor.
  • The law provides that the import of equipment that represents investment by a foreign investor is exempt form customs and import duties. However, this does not relate to motor vehicles and gambling machines. This import is subject only to environmental protection regulations.
  • Customs exemption may also be used by a company with foreign investment up to the percentage of foreigner’s ownership in the total capital stock of the company calculated in accordance to our Law on bookkeeping, within a period of two years from the day of registering the foreign investment.

Disputes and real estate

All the disputes arising in connection with foreign investments may be resolved before Serbian courts, or other authorities, or before international arbitration, according to provisions in the contract on foreign investment. A foreign individual or legal person, acting as a foreign investor is allowed to acquire real property in accordance with the law, which proscribes that the foreign persons may acquire property rights on terms of reciprocity. Concerning the procedure for investing, all investment is to be registered before Serbian Business Registry, in compliance with Company Law. The procedure of registration lasts up to ten working days and the fees are relatively small.