Serbia is fast becoming one of Europe’s most attractive investment destinations, thanks to its strategic location, skilled workforce and competitive business costs. Situated at the crossroads of Central and Southeast Europe, it provides seamless access to key global markets, bolstered by free trade agreements with the EU, China, Russia and Turkey, as well as preferential trade status with the U.S. and Japan.

Since 2007, Serbia has drawn approximately EUR 45 billion in foreign direct investment (FDI), fuelled by investor-friendly policies, tax incentives and financial benefits. With high-growth potential in industries like infrastructure, energy, automotive, agriculture and IT, Serbia presents a compelling opportunity for businesses looking to expand in a thriving European market.

1. Investment climate – market boosters, strategic safeguards, investment screening

Serbia provides a stable and legally secure environment for both domestic and foreign investors, with opportunities across a range of sectors. But what makes Serbia an attractive investment destination? How do its legal protections, incentives and trade agreements benefit international businesses?

Foreign investors receive national treatment, access to preferential trade agreements with major economies and potential financial incentives, including tax relief and duty-free equipment imports. Serbia’s investment framework also includes anti-trust regulations governing foreign direct investment (FDI). With strong government support and key economic institutions driving growth, Serbia presents a solid case for strategic investment.

2. Market entry: Options and entity considerations

Expanding into the Serbian market requires careful planning. What are the most effective entry strategies for investors? Should companies establish a new entity, acquire an existing business or collaborate with local partners?

Serbia offers a streamlined business registration process, with limited liability companies (LLCs) being the most common structure. Business acquisitions, whether through share or asset deals, enable rapid market entry, while corporate restructuring can enhance operational efficiency. All entities must be registered with the Business Registers Agency. Regulated industries, such as banking and insurance, are subject to additional compliance requirements.

3. Employment considerations

A comprehensive understanding of Serbia’s employment laws is essential for businesses establishing operations in the country. What are the key legal requirements for employers? How do regulations on contracts, wages and termination influence workforce management?

Employment relationships in Serbia are governed by legislation, collective agreements and individual contracts, with legal protections generally favouring employees. Employers must formalise written contracts before work commences, while foreign nationals require a unified residence and work permit. Labour laws stipulate a standard 40-hour workweek, statutory leave entitlements and equal pay provisions. Social security contributions are shared between employers and employees and strict legal procedures apply to contract termination, particularly in redundancy cases.

4. Real property

Serbia’s legal framework provides strong protections for property rights, ensuring equal treatment for all investors while facilitating the transition of socially-owned land into private ownership. The acquisition and use of agricultural, forestry and construction land are generally unrestricted, though certain environmental and statutory limitations may apply.

While construction land remains largely state-owned, recent legislative reforms aim to streamline the conversion of usage rights into full ownership. Foreign individuals and legal entities may acquire real estate under reciprocity conditions, subject to specific restrictions, particularly concerning agricultural land. All real estate transactions must be notarised and registered with the Real Property Cadastre to ensure legal validity.

5. Commercial contracts

In Serbia, commercial contracts are primarily governed by the freedom of contract, though subject to key restrictions, including good faith, fair dealing and the prohibition of monopolistic practices. A contract is considered executed once the parties have mutually agreed upon its terms, with certain requirements for third-party consent or notarisation.

While negotiations may not always result in binding contracts, parties may be held liable for damages if negotiations are conducted in bad faith. Pre-contracts may obligate parties to enter into a main contract under specific conditions and the form of the contract must adhere to legal standards.

Where foreign elements are involved, the parties may choose the governing law, although Serbian mandatory legal provisions cannot be circumvented. For dispute resolution, foreign jurisdictions can be specified, but the recognition and enforcement of foreign judgments depend on the principle of reciprocity. This underscores the importance of understanding Serbia’s contracting principles and legal requirements for businesses operating in the region.

back to top