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What the Free Zones are?

Explore the highly developed free zones in Serbia, offering business advantages like tax exemptions. Learn about the incentives, advantages, and success stories of free zones, promoting investments, employment, and production. Discover specific details on Subotica, Šabac, Zrenjanin, Kragujevac, Užice, and Pirot free zones.

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What the Free Zones are?

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  1. What the Free Zones are? Free zones in Serbia are highly developed centers of infrastructure equipped land with logisticsupport prepared to attract production and technology investment. In Free zone areas are offered business advantages - Custom Duties and TAX releasing's

  2. The Free Zone regulations • GATT (general Agreement of Tariffs and Trade) • Kyoto convention and revised Kyoto convention - 1999 year - on the simplification and harmonization of customs procedures • Customs Community Code EU • National Free Zone Law from 2006. year

  3. Incentives by the law Business free of CUSTOM DUTIES Business free of VAT Business free of Corporate profit tax

  4. Free zones – Serbian idea?

  5. Why do Free Zones exist? • Attract INVESTMENTS in the undeveloped regions • Increase EMPLOYMENT • Increase PRODUCTION and EXPORT • Provide to companies SAVING in business (duty, tax, stimulate measures of economic policy) • Concentrate services in LOGISTICS CENTERS

  6. Serbia advantages • Location on Pan-European corridor 10 represents link of Europe and Middle East. • Unemployed, educated and professionally skilled workers • Simplified regulations on foreign trade and investments • Fast company establish procedure • Lowest corporate profit tax rate in Europe- 10% - In Free zones 0%

  7. Free trade agreements European Union EFTA Russia Kazakhstan USA – preff. trade regime CEFTA Turkey Belorussia

  8. Free Zone benefits... • Free of customs duties (and other import charges for goods, equipment, raw material and construction material) • Fiscal benefits (exemptions from any tax burden for FDI, VAT, company profit tax, property tax, income tax) • Efficient administration (one stop shop) • Local infrastructure subsides (low price and service costs)

  9. Subotica Zrenjanin Novi Sad Corridor VII Smederevo Šabac Svilajnac Kragujevac Užice Kruševac Jug Niš, Prokuplje Pirot Corridor X Free zones in Serbia Pancevo Existing In preparing

  10. New incentives provided by the state • In Free Zones Corporate Income Tax = 0 • Exemption from VAT on energy sources for production activities in the zone (Gas, Electric energy, Mazout, Coal) • Announced new incentives from the state • Exemption from the corresponding part of the salary tax • Exemption from VAT on goods and services trade within the free zone

  11. Free zone effects 2010/2011 Export increase for 32 % Companies in Free zones increase 17% Turnover increase 77 % Workers up for 60 % Investments up 275%

  12. Export from Free zones in Serbia 2010

  13. Subotica Zrenjanin Novi Sad Corridor VII Smederevo Šabac Svilajnac Sevojno Kragujevac Užice Kruševac Jug Niš, Prokuplje Pirot Corridor X 211 companies in Free zones in Serbia Pancevo

  14. Free zone Subotica The Subotica Free Zone is located in the northern part of Serbia - border with Hungary and the EU The E-75 international highway with rail line The Subotica Free Zone was founded in 1996 15 hectares of land 13.000 square meters of production space 26.000 square meters of closed storage space 313 square meters of office space City water supply, Two transformer sub-stations with 2x630 KW Telephone lines Projected connection to local gas lines

  15. Free zone Šabac Free zone position 25kmfrom the highway E70, 30 kmfromthe Bosnian border, 70kmfromborder with Croatia The main  economic potential are River Sava and Drina Total area of the zone is  3,991m², and will be extendedthisyear. Greenfield area is around 2,3 ha Outdoor storage space 6,700m² Indoor storage space is 5,000m². Free zone is fully equipped with infrastructure with wide range of logistic services.

  16. Free Zone Zrenjanin Zrenjanin Is the city in Vojvodinawithmost  water flows in its area ( The Danube , The Tisa , The Begej, The Tamis, also the river canal network Danube-Tisa-Danube)  which puts him among the most attractive cities for investing in Serbia, according to USAID, SIEPA and American Chamber of Commerce. The Free zone covers an area of 6 hectares 400m² is for office space,  6000m² for warehouses and 5000m² for open storage space.

  17. Free Zone Kragujevac Free zone Kragujevac was founded on the 5th of November 2009, by the City of Kragujevac and FIAT automobile. Basically, this zone is founded to endorse the development of the automotive industry in Serbia. Free zone has around 157ha of land and includes total area of the automobile factory .  There are 200 parcels intended for FIAT subcontractor companies

  18. Free Zone Užice  Free zone Užice is founded by the City of Užice, Copper mill AD. Sevojno and Impol-Seval Aluminum mills a.d.Sevojno This is the 5th free zone founded in Serbia with many business benefits for all investors. The main economic potential is metal and metal processing industry. 

  19. Free zone Pirot Established in 1996 Total area 103 ha 9 production and 100trade entitieswith 5.000 employees Product export oriented free zone main users Tigar A.D. and TigarTyres(part of MICHELIN group) Services in free zone – forwarding service and organization of intermodal transport Turnover within the Free zone in 2010 around360.000.000 Eura AWARDED - BEST OF SERBIA 2009-2011

  20. Biggest export from Serbia 9 production plants - 8000 trucks per year

  21. Benefits from local municipality • Construction activities – investor is exempted of: • Fees for development of building land • All taxes and expenses of Municipal Administration (communal fees, town planning permits, town planning approval, building permit, etc...) • During the utilization of facility for the period of 5 years investor isexemptedfrom: • paying local communal taxes • fees for using city building land • 50% expenses for communal services • shall be entitled to deduct the rental price of land in relation to the number of newly employed workers • Releases 50% of PropertyTax for new users of the Zone • Releases 30% of the corresponding part of the Tax on salaries of workers employed in manufacturing companies which employ 200 or more employees.

  22. Logistic and Intermodality In Serbian Free zones

  23. Free zones and Logistic in RS Law on Spatial plan of Serbia from 2010 to 2020 (Official gazette RS88/10) http://www.rapp.gov.rs/media/zakoni/Zakon_o_prostornom_planu_RS-cir.pdf support all Free zones location for construction of intermodal terminals and recommend all free zone in view goods flow generators in article 327. Intermodaltransport and logistic centers (page272 in Law) Strategy for development of rail, road, water, air and intermodal transport in Republic of Serbia from 2008. to2015 (Official gazette RS55/05, 71/05 i 101/07) http://www.putevi-srbije.rs/strategijapdf/Strategijatransport_lat.pdfin article 4.2. Guidelines for the development of intermodal transport (page 39) in accordance with EU guidelines are given for the consideration of locations (11 conditions) and define the necessary infrastructure (7 conditions) – recommend terminal location in Free zone

  24. Use of EU Model and Grants for construction

  25. New project – Intermodal Logistic Terminal on the Corridor X – Free zone Pirot

  26. www.usz.gov.rs Zоrаn Vučić, pоmоćnik direktora Теl.: 011/311-73-93, zoran.vucic@usz.gov.rs Uprаvа zа slobodnezоnе, Оmlаdinskih brigаdа 1, 11000 Beograd Теl.: 011/311-73-26, 011/311-73-27, Fаx. 011/311-73-88

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