Transparency and Predictability

Transparency and Predictability To what extent to you agree that transparency and predictability for doing business in Serbia increased in the last 12 months? Transparency and predictability have been improving over the years. 63% 60% 55% 72% 63% 45% 2013 2014 2015 2016 2017 2019 Those who partially agree, agree, or strongly agree In % Base: Total target population

Laws and regulations To what extent do you agree with the following statements? Public administration’s work is more efficient now than a year ago The burden of laws and regulations decreased in the last 12 months Businesses perceive more efficiency in the publicadministration, while the burden of laws and regulations has decreased. Those who partially agree, agree or strongly agree In % Base: Total target population

Public Private Dialogue To what extent do you agree with the following statements? Business ability to participate in reforming laws related to the business environment has improved in the last 12 months Public-private dialogue on reforms has improved. Those who partially agree, agree or stronglyagree In % Base: Total target population

Access to Finance To what extent do you agree with the following statements? The access to finance for your business is improved in the last 12 months Businesses believe that their access to finance has improved in the last 12 months. Those who partially agree, agree or stronglyagree In % Base: Total target population

Average share of different funding sources What percentage of financing your business comes from… Compared to the previous period, own funds and banks are less frequently mentioned as sources of financing for the businesses. In 2019, customer advance payments/currency suppliers is mentioned as a source almost as often as the banks. Average percentage of funding sources In % *Answers "Customer Advance payment/Currency Supplier" and "Factoring" are added in 2019, and have not existed before Base: Total target population

Perception of changes compared with the previous year Percentage of business entities that claim increase in net profit Percentage of business entities that claim increase in total revenue Percentage of business entities that claim increase in number of employees Over the period 2014 to 2019, an increasing number of firms reported growth in employees, total revenue, and net profit. In % Base: Total target population

Money and time spent on regulatory issues During the last 12 months has your company spent more or less money and time dealing with regulatory issues, comparing to year before that? Although most companies continue to state that they spent the same amount of money and time on regulatory issues, there is a clear trend of improvement: less firms say they spent more time and money; more firms say they spent less time and money. In % Base: Total target population

Effect of corruption in public administration on doing business To what extent corruption in public administration affects your business? Companies believe that the effects of corruption in public administration on doing business are lower compared to the previous period. • Those who stated that corruption in public administration affects business a lot or sometimes In % Base: Total target population

Different aspects of regulatory framework and their influence on business in Serbia The negative impact of the following factors on businesses in the past 2 years Grey economy and quasi-fiscal charges are the most negatively rated aspects of the regulatory framework. Tax issues constitute 6 of the 10 most negative factors. In % Those who negatively rated aspects of regularity framework Base: Total target population *Recalculated without answer „Not applicable“

Different aspects of regulatory framework and their influence The positive impact of the following factors on businesses in the past 2 years Inspection surveillance, rules on money transfer, and staff regulations and procedures (not related to wages of taxes) are the most positively rated aspects of the regulatory framework. In % Those who positively rated aspects of regularity framework Base: Total target population *Recalculated without answer „Not applicable“

Evaluation of inspectors’ work Based on your experience with various inspectors, do you agree with the following statements: • Over the past few years, inspectors have less often had warrants for surveillance and less often used check-lists, but are on the other hand seen as more coordinated. • Inspectors have a warrant for surveillance, that is adduced to us • Inspections use check-lists in inspection oversight • Inspections provide information, advice and technical assistance in order to enable businesses to comply with the regulations timely • Inspections inform companies about the upcoming control • Inspections are not well coordinated and they duplicate their requests In % Base: Total target population

Reasons for not hiring employees in the past 12 months Please give your reasons that caused you to limit hiring or retaining employees in the past 12 months While most companies that haven’t increased number of employees cited no need for new workers due to market conditions, there are barriers to hiring cited by other respondents: taxes and contributions, and lack of qualified employees 77% 11% 10% 7% 3% 3% Paperwork involved in hiring and/or retaining employees Labor law provisions on severance pay, limited fixed term contract There was no need for new workers due to market conditions Wages are too high given productivity levels Lack of qualified employees Amount of taxes and social contributions • Base: Those that haven’t increased number of employees; Multiple answers (n=770)

Tax Compliance Please evaluate to what extent the following measures would alleviate and motivate enterprises in Serbia to comply with tax regulations more Companies emphasize that all mentioned measures alleviate and motivate enterprises to comply with tax regulations more, with exception of stricter sanctions and more frequent tax controls. Those who think that measure alleviate to a high extent In % Base: Total target population

Market structure What percentage of your products/services did you sell in Serbia, and what percentage of the products/services did you sell in other countries? In Serbia, what percentage of your products/services did you sell in the town of your business headquarters, and what percentage do you sell in other towns/regions? Regarding exports, what percentage of your products/services did you sell in the markets of former Yugoslavia countries (excluding Slovenia and Croatia), and what percentage did you sell in other countries (the EU, Russia, etc.), in 2018? 2014 2013 2015 2016 2017 2019 Companies mainly sell in their hometown. While Serbia’s exports have grown, the survey shows that 25% of companies export, and only 10% of sales are in export markets. In % Base: Total target population Average percentage of companies’ products/services

Relevance of e-commerce How do you generally feel about the relevance of e-commerce? e-Commerce will grow strongly, as a commerce channel Most Serbian businesses see the importance of e-commerce. 71% e-Commerce will grow strongly in Serbia, as a commerce channel 58% Base: Total target population

Possession of websites and web shops and online payment on web shops Does your company have the option of online payment (pay card, e-money, other)? Does your company have a webpage/website? No Don't know/Refusal Yes Two thirds of companies (66%) have a website, while only 12% have a web shop. The majority of those who do not have a web shop haven’t ever considered creating it (81%). Companies without a web shop export less. I don’t have online payment because I don't have web shop In % Base: Total target population

Need for investment in the business • Do you currently need to invest in your business? . 63% of companies need investment in their business Base: Total target population

Factors that affect the competitiveness of businesses Please evaluate to what extent the following factors affect the competitiveness of your business Lack of finance is hindering competitiveness, along with other factors relating to the business environment In % Base: Total target population

Managing receivables – or learning about it Does your company use any form of classifying receivables in different categories („uncollectible receivable“ and „suspicious receivable“)? Would it be helpful if you had a manual/ online tool with guidelines about managing receivables, or collecting them easier and less costly? Refusal Only 15% of companies stated that they are classifying receivables. Only slightly over a quarter of companies (27%) believe that it would be helpful to have a manual on how to manage their receivables. Refusal Yes Yes No No Base: Total target population

Asking for loans for financing of business in the past 12 months Did you ask for a loan? Short-term business credits are by far the most common type of credit asked for in the past 12 months. Those who asked for loan: In % Base: Total target population

Average amount of money taken from the bank annually, in EUR Approximately how much do you borrow from the bank annually in order to finance your business? Median values show a clear increase in the amount of money annually borrowed from the bank in 2019. € € € € € € Base: Total target population

Willingness to give a share in company ownership to a relevant partner If you are familiar with equity financing, would you be willing to give a share in company ownership to an adequate partner? Most companies that are familiar with equity financing are not interested in giving up a share of company ownership in exchange for equity. In % Base: Total target population

Reasons for lack of experience with equity financing Why don’t you have experience with equity financing? Equity financing has potential to increase. The largest room for improvement lies in trust. In % Base: Those who are familiar with but don’t have experience with recapitalization and excluding those who are not interested (n=156); Multiple answers

Preferences for new technological solutions for business financing Would you use any of the following new technological financial solutions for financing of your business? Why wouldn’t you use any of these new technological financial solutions? While FinTech solutions have potential in Serbia, several challenges limit their application. The largest room for improvement relates to trust. Multiple answers possible In % Base: Total target population Base: Those who are familiar with crowdfunding and/or tokenization but wouldn’t use them (n=289)

Firm growth by sophistication criteria Most criteria of sophistication lead to higher revenue growth.

Firms’ growth by level of internationalization/digital implementation Exporters outperform non-exporters, and firms with a website grow more than firms without a website. Firms with a web shop grow faster – both exporters and non-exporters. Base: Total target population

Transparency and Predictability