New Law on Investments
New Law on Investments shall come into effect on November 4 (hereinafter referred to as: Law).
The Law regulates the general legal framework for investments in the Republic of Serbia, subjects of support to the investments for efficient rendering of services to investors, establishment and organization of the Economic Development Council and Development Agency of Serbia.
For the purpose of formal-legal equalization of domestic and foreign investors, this law secures the freedom of investment and the rights are guaranteed to the foreign and domestic investors and institutional framework for efficient rendering of services to investors by the holders of public authorizations is thereby stipulated.
In terms of this Law, the following shall be considered an investment:
- establishment of a company or its branch, as well as the rights to property and equipment i.e. performing the activity of a company and/or its branch
- acquiring a stake in the company, company shares or other securities, i.e. the funds spent for acquiring the stakes, shares or securities
- acquiring a share that the investor has acquired based on the agreement on public-private partnership
- acquiring the property right, easement, pledge and other real rights to movable and immovable property located in the territory of the Republic of Serbia that the investor has acquired for carrying out its activity
- acquiring the intellectual property rights, which are protected or have been verified according to the applicable law of RS
- acquiring the rights to performing the activity which is done on the basis of a license or approval of the competent state authority, acquired for the purpose of performing the activity of the investor in the territory of RS.
On the other hand, the following shall not be regarded an investment:
- pecuniary or other claim arising directly from the commercial business (sales, exchange, rendering of services etc)
- pecuniary claim arising from the loan related to the commercial business (financing of trade etc)
- portoflio investment.
The Law stipulates the freedom of payment to foreign countries; therefore for the purpose of making payments to the foreign countries which are allowed by the law stipulating the foreign exchange operations, the investor may buy foreign currency on the foreign exchange market in the Republic of Serbia.
This Law stipulates the incentives for the investments in line with regulations stipulating the state aid, tax incentives and exemptions, reliefs from payment of duties, tariff preferences and the social security system. The import of the equipment which represents the contribution of a foreign investor is free and exempted from customs and other import duties, except for the passenger cars and machines used for entertainment and games of chance, provided that import is in line with the regulations stipulating the citizens’ health and safety and environment protection.
Investment and Export Promotion Agency founded in line with the Law on Foreign Trade Operations as well as the National Agency for Regional Development founded in line with the Law on Regional Development shall cease to be operative within 120 days from coming into effect of the new law at the latest, i.e. as of the day of beginning of work of the Development Agency of Serbia, which shall take over the legal transactions, except for the labour law, property, equipment, work tools, archive material and registry material of the Investment and Export Promotion Agency and National Agency for Regional Development.
Upon the proposal of the investor, the local self-government unit, i.e. the competent body of the autonomous province establishes, together with the investor, the investment program in order to implement procedures related to the preparation of documentation and defining documents and data that the investor shall deliver to the competent authorities in the local self-government, i.e. autonomous province, within the deadlines established by the law and other regulations.
As of the day of this law coming into force, the following shall cease to have the effect:
– Law on Foreign Investments (’Official Gazette of FRY’, No. 3/2002 i 5/2003 and ’Official Gazette of RS’, No. 107/2014);
– Volume VIII ’Promotion of Export and Foreign Investments’ in the Law on Foreign Trade Operations’ (’Official Gazette of RS’, No. 36/2009, 36/2011 – st. law and 88/2011);
– Volume V, section 6, Articles 27 through 30 of the Law on Regional Development (’Official Gazette of RS’,No. 51/2009 and 30/2010)