City Directory

Doing Business in Serbia

A few words on Serbian economy

The official currency in Serbia is the Serbian dinar. The GDP growth rate was 7.5% in 2007 and GDP per capita was $6541. Serbia's GDP is 63.5% comprised of services, 24.2% industry, and 12.3 agriculture%. The inflation rate in 2006 was 6.6% and the official unemployment rate was 18.5%. The main industries are pharmaceutical, agricultural machinery, electrical and communication equipment, paper and pulp, transportation equipment, food. Besides the very high unemployment rate, one of the biggest problems is the foreign trade deficit, estimated at above $9 billion in 2007. The European Union is Serbia's major trade partner.

In the 1980's the position of Serbia was relatively good compared to the rest of eastern Europe at the time. However, the 1990's brought wars, hyperinflation, economic sanctions and massive destruction of infrastructure in the 1999 bombing, all of which significantly shrank the economy. Recovery has been rapid since democratic changes in 2000, and therefore Serbia is frequently termed the Balkan Tiger. However, even today Serbia's GDP is still below the 1990 levels and the political situation, corruption and other issues are preventing stronger and more stable economic development.

Investing in Serbia is a good opportunity and there are numerous blue chip market entrants. Please visit the website of a local consulting company such as Accenica consulting if you are interested in doing business in Serbia or website of some larger international business advisory such as http://www.deloitte.com/

Tourism in Belgrade and Belgrade Hotels

Belgrade was one of the major tourist destinations in this part of Europe in the 80s. Today Belgrade accounts for around 35% of the total tourists visiting Serbia and is still the biggest city to visit in Serbia and overall Balkan region. However, compared to Central European attractions like Prague or Budapest, Belgrade's resources are still very underutilized. This is especially true for leisure tourism as more than 70% of hotel rooms in Belgrade are rented to business travelers.

Belgrade is in an extremely good geographic location as it lies on the crossroads of major routes connecting Asia to Europe. Nevertheless, Belgrade has a much lower number of overnight stays than Budapest and Prague - primarily because of less developed business, the reputation acquired during the nineties, but mostly because of underdeveloped marketing. We hope that BelgradeEye.com city guide is one step in improving that state.

Most hotels in Belgrade are three star hotels (29.7%) and four star Belgrade hotels (27.4%), however it is important to note that there are only 9 five and four star hotels in Belgrade. Unlike Prague, Warsaw and Budapest, hotel chains in Belgrade do not have the majority of overnight stays - however there are some indications that this will start to change very soon.

The highest demand for hotels in Belgrade is fulfilled by 2 prominent Belgrade hotels - Intercontinental Belgrade hotel and Hyatt Belgrade Hotel.

There are numerous newly built hotels in Serbia, and most of those are built in Belgrade. A recent trend is set by so called boutique hotels - basically smaller and nicer hotels with a special focus on luxurious apartments.

Experience with doing business in Serbia

We're doing business in Serbia. Let me assure you it's a good place for business and economic growth. It has excellent strategic location, well educated and skilled workforce, a favorable tax code, a reformed legal system and a government anxious to attract foreign investment.
Mr. Thomas Kelly, first General Manager of U.S. Steel Serbia.

Serbia offers an attractive business proposition and our belief is that it will evolve into a significant economic and financial hub for the Balkans. Establishing this representative office is a key step in serving our current and future clients in Serbia, and shows our commitment to the market as well as a recognition that Serbia is an attractive and rapidly growing place to conduct business.
Mr. Tibor Pandi, Head of Citigroup's Non-Presence Country Business in South Central Europe and Baltics.

After the government announcement of the introduction of VAT law, which was vital for starting operations of the METRO Cash and Carry business in Serbia, we could go ahead with our plans to invest and open the first cash and carry distribution center in Serbia. We are satisfied with the work of our distribution centers in Belgrade and Kragujevac, in which company has invested EUR 60 million during 2005.
Mr. Damir First, Director of Metro Cash & Carry for Southeastern Europe

We are the first foreign industrial company to set up production facilities on a green-field site in Serbia, and we are, in some aspects, leading the way in Serbia. So far, our expectations are met and we look forward to the future business in Serbia."
Mr. Hanno C. Fiedler Chairman and CEO of Ball Packaging Europe, Germany, a subsidiary of Ball Corporation (USA).

Serbia is a great place to do business"
Mr. Joseph Antoline, Executive Director of Finance for US Steel Serbia.