eKapija | Law on Chambers of Commerce divides foreign investors - Mandatory membership means more money for Serbian Chamber of Commerce, but also new impost on the economy sector

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At the very end of 2015, the Parliament of Serbia adopted the new Law on Chambers of Commerce which had attracted public attention and got quite contradictory reviews even prior to its adoption.
This time, aside from usual differences in opinions between the government and the opposition, the state and the economy, employers and employees, the new law has also divided foreign investors, primarily because of one particular provision - Article 33, which stipulates that in addition to mandatory membership, it will also be mandatory to pay the membership fee to the Serbian Chamber of Commerce (SCC) as of 1 January 2017.
And while SCC President Marko Cadez justifies the mandatory membership by the need for making the modernized chamber system of Serbia "an efficient service and representative of the interests of the economy, small and large companies alike, which will allow them to connect with each other through a system of suppliers", critics stress that the only thing the economy is going to get is a new impost that nobody even knows how much it could cost them.
The SCC modernization process is modeled after the adapted Austrian model. And given that the new organization of chamber system in Serbia looks up to German and Austrian models, representatives of investors from these countries strongly support the new law.
Christoph Leitl, the president of the Austrian Federal Economic Chamber, is of the opinion that the new organizational structure of the Serbian Chamber of Commerce will provide Serbian enterprises with a strong, efficient and solidary representative of their interests.
German and Austrian companies expect the new law to allow them to represent their interests in the way their parent companies do that in their respective countries. Martin Knapp, the delegate of the German Business Association in Belgrade, explains that the secret of success of the economy sector in Germany and Austria lies in their strong chamber systems.
Knapp says that making the payment of membership fee mandatory is a good proposal because, as he explains, "there is so much to finance, which is not possible with a voluntary membership fee".
Support to the new law is also given by the British-Serbian Chamber of Commerce which finds the new Law on Chambers of Commerce to be "much better than the previous one" and "a big step forward" in current circumstances.
However, it hasn't all gone well for those who proposed the new law. Two important associations which bring together some of the largest companies that operate in Serbia - the Foreign Investors Council (FIC) and the American Chamber of Commerce (AmCham), criticized the new law even while it was still just a draft. .
- Passing of the Law that affects economic entities and business environment in Serbia should have been preceded by an adequate public discussion, so all business could have timely participate in its creation with their suggestions - Milos Djurkovic, the vice president of the American Chamber of Commerce (AmCham) to Serbia, says to eKapija.
Second, as he points out, there is a very disputable provision in the Law, which stipulates that it will be mandatory for all economic entities to pay the membership fee that will be determined by the Assembly of the Serbian Chamber of Commerce in early 2017.
Both AmCham, which has 195 members, and the Foreign Investors Council, with over 130 members, are of the opinion that making the payment of membership fee mandatory represents yet another parafiscal impost on the economy, which is additionally aggravated by the fact that the amount of that fee is not prescribed by the Law, but left to be determined by the SCC Assembly.

(Photo: Ralf Kleemann/shutterstock.com)

People at AmCham and FIC share the opinion that the Introduction of mandatory membership fee could even cost the state a lot in the end. Namely, according to their estimated, it would push Serbia down four places on the World Bank's Doing Business list, from 59th to 63rd, while tax payment terms would send it to the 159th place.
The National Alliance for Local Economic Development (NALED) too is against mandatory membership fee. NALED suggest that the membership fee should be voluntary and represent a contribution to better functioning of the SCC, while additional revenues could be generated through the provision of services or project implementation.
To view a complete text of the new Law on Chambers of Commerce, please follow this LINK.

Milos Vlahovic

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