Government provides EUR 26,5 m for 7 new investments - Amount of incentives unknown

The Government will provide EUR 26,5 m for seven new investments in the next three years. This decision is a part of conclusion the Government of Serbia made on assigning incentives for seven investors which will enable at least 6.042 vacancies.

So far, contracts have been signed with two investors: Lear Corporation for construction of facility for production of cable beams in Novi Sad and IGB Automotive comp for a new production department for production of heaters for car seats in Indjija. Both companies will invest a bit less than EUR 20 m in total and hire app. 2.500 employees in the next three to five years.

However, it remained unknown which is the amount of incentives distributed to these investors, which amount is planned for remaining 5 investors and when contracts with them will be signed.

The Ministry of trade outlines that signing of contracts with a number of investors has been in progress but they cannot communicate information to the public how many of them will be provided with incentives since some of them insist on not publishing data.

They have recently communicated that investors committed that they will pay more than EUR 532,1 m for gross salaries in the next three years.

Banja komerc Bekament, local producer of materials for final works in construction is also among the companies which will get governmental incentives. As the company told us, construction of the plant for production of styropore in Arandjelovac is planned, the implementation of which is planned for spring 2016 when they will communicate more information. As for now, they are waiting for the call of the ministry to sign contracts.

Remaining four companies which will get incentives are Weibo-Group, Leoni WCS, SR Technics Services and Aster tekstil. They operate in the field of textile, production of electrical equipment, overhaul and maintenance equipment , airplane maintenance and they will implement their investments in Vranje, Prokuplje, Belgrade and Nis.

Negative practice?

The Ministry assigns incentives for new seven investments based on the Regulation on terms and method of attracting direct investments which the Government adopted in the spring.

As an economist Sasa Djogovic explains, for a longer period of time the Government uses bait as a policy for attracting investors.

- It could be good as a short-term solution. Positive effects are in opening new vacancies but in order to keep investors it is necessary to change fiscal environment – Djogovic thinks.

Our collocutor sees on-publishing of amounts of incentives as additional problem.

The practice which is 2006 Mladjan Dinkic implemented that the government provides incentives to support investments and new vacancies, was criticized a number of times in the public. There were cases where the number of vacancies was falsely increased at some consumers of funds so that they would be provided with more incentives and a large number of firms which were provided with them ended year in minus.

Since 2006 until now, 273 contracts on assigned funds for direct investments have been assigned and the government terminated contracts on incentives with 60 investors since terms were not fulfilled.

The Ministry of trade claims that responsible services are carrying out strict controls of spent assigned funds which has not been the case before.

Let us remind, in line with the new Regulation on attracting investors, governmental support is available to companies which invest in production, services which can be a subject of international trading and strategic projects and when it comes to a vacancy, depending of developmental level of municipality and investment scope, companies can count on amount of EUR 3.000 to 7.000 per vacancy. Additional incentives are planned for investors so a company which invests EUR 50 m in production can get half of the funds from the government.

NCR is a global leader in production sale of money transaction devices which after one year, in march 2015 received incentives from the government for new vacancies.

I.B.

Vlada Republike Srbije

Ministarstvo privrede Republike Srbije

NCR d.o.o. Beograd

Lear Corporation d.o.o. Novi Sad

IGB Automotive Comp d.o.o. Inđija

Weibo-Group SRB d.o.o. Beograd (M-6 EDEN SRB )

Leoni Wiring System Southeast d.o.o. Prokuplje

SR Technics Services Beograd

Aster Tekstil Niš

Banja Komerc Bekament doo Banja Aranđelovac

Uredba o uslovima i načinu privlačenja direktnih investicija

subvencije za investitore

subvencije investitorima

subvencije za nova radna mesta

podsticaji za investitore

podsticaji za ulaganja

podsticaji za zapošljavanje

podsticajna sredstva za investitore