Free Zones in Serbia

Free zones are physically enclosed and marked parts of the territory of the Republic of Serbia, equipped with infrastructure, where production and service activities can be carried out with certain incentive benefits.

Serbia is characterized by a favorable geographic position – it stands at the very door of the European Union and the intersection of Corridor. 10 and no. 7, on the Balkan Peninsula and represents the link between the eastern and western, northern and southern Europe. This allows companies, which operate in the free zones, easy access throughout the EU market.

Free zones that currently exist in Serbia are at: Pirot, Subotica, Zrenjanin, Novi Sad, Kragujevac, Sabac, Uzice, Smederevo, Krusevac, Svilajnac, Apatin, Vranje, Priboj and Belgrade. All kinds of business and industrial activities can be performed in these zones, including production, storage, packaging, trade, banking and insurance.

Free zones may be established and manageable by both domestic and foreign companies. Earnings and revenues that occur within a free zone can be transferred to any country, including Serbia, freely without prior permission, without payment of any taxes, customs duties or charges. This creates enormous opportunities for cooperation of domestic and foreign industry. Some of the current producers in free zones in Serbia are: Siemens, Micheline, NIS Gazprom neft, Fiat, Panasonic, Swarovski and many others.

Operations in the free zones can provide the investor special incentives and preferential tax regime, including:

  1. VAT exemption on the entry of goods into the free zone, as well as the provision of transport and other services in connection with the entry of goods
  2. VAT exemption on the supply of goods and services in the free zone
  3. VAT exemption on the supply of goods between the users of two free zones
  4. freeing production users to pay VAT on energy consumption
  5. the release of certain tax burden for foreign direct investments
  6. exemption from customs duties and other import duties for goods intended for the performance of activities and construction of facilities in the free zone (raw materials, equipment, construction materials)

Free zones also provide some other benefits, such as free flow of capital, profits and dividends, efficient administration (one stop shop), simple and fast customs procedures, exemption from certain local fees and taxes (such as fees for use of city construction land, fees for urban conditions and approvals, connection to the local water and sewer infrastructure) and providing customer services at preferential prices (transport organization, handling, unloading, forwarding services, insurance and reinsurance, banking transactions, etc.)

Exports and imports of goods and services in the free zone are unrestricted without any quantitative restrictions. Goods imported from the zone to the domestic market are subject to the regime for imports of foreign goods.

Gordana Galamb