Direct investments in Serbia have been subsidized for more than 15 years, and during that period, more than 93 percent of the funds were approved to foreign investors, reports the Biznis i finansije monthly.

Only 2.1 percent of supported investments are in the field of high technologies, and in the last five years almost 80 percent of total direct investments have been directed to typically labor-intensive activities, with earnings below the national average.

Thus, the policy of support for direct investments, which was initially designed as a driver of productivity growth, modernization and improving the competitiveness of the Serbian economy, as the Biznis i finansije monthly emphasizes, has become an instrument for correcting the bad system of labor taxation, in which the burden of taxes and contributions is almost the same in the sectors of high and low salaries.

At the end of the pre-crisis year of 2019, a total of 638 million euros was allocated for subsidizing 2,912 investments, worth over 2.7 billion euros. In the period from 2016, when the Law on Investments was adopted, until 2020, 121 agreements on the allocation of funds for investment incentives were signed.

Total investment value exceeds 2.5 million euros

The total value of these investments amounted to over 2.5 billion euros, state incentives for those purposes were 459 million euros, while, based on the concluded contracts, the plan was to create about 46,000 new jobs. When looking at the average value of subsidies, foreign investors were granted 6.4 times more funds per project.

Investment activity has intensified in the last two years, when about 60 percent of all the incentives granted during the previous five years were approved, according to comparative research by the Faculty of Economics in Belgrade and the Foundation for the Development of Economic Science (FREN).