What the Free Zones are?

Free zones in Serbia are highly developed centers of infrastructure equipped land with logistic support prepared to attract production and technology investment. In Free zone areas are offered business advantages Custom Duties and TAX releasing's

The Free Zone regulations

GATT (general Agreement of Tariffs and Trade) Kyoto convention and revised Kyoto convention - 1999 year - on the simplification and harmonization of customs procedures Customs Community Code EU

National Free Zone Law from 2006. year

Incentives by the law

Business free of CUSTOM DUTIES Business free of VAT Business free of Corporate profit tax

Free zones Serbian idea?

Why do Free Zones exist?

Attract INVESTMENTS in the undeveloped regions Increase EMPLOYMENT Increase PRODUCTION and EXPORT Provide to companies SAVING in business (duty, tax, stimulate measures of economic policy) Concentrate services in LOGISTICS CENTERS

Serbia advantages

Location on Pan-European corridor 10 represents link of Europe and Middle East. Unemployed, educated and professionally skilled workers Simplified regulations on foreign trade and investments Fast company establish procedure Lowest corporate profit tax rate in Europe- 10% - In Free zones 0%

Free trade agreements

European Union

EFTA

Russia

Kazakhstan

CEFTA

Turkey

Belorussia

USA preff. trade regime

Free Zone benefits...

Free of customs duties (and other import charges for goods, equipment, raw material and construction material) Fiscal benefits (exemptions from any tax burden for FDI, VAT, company profit tax, property tax, income tax)

Efficient administration (one stop shop)

Local infrastructure subsides (low price and service costs)

Free zones in Serbia

Subotica Zrenjanin Novi Sad Pancevo

Corridor VII

abac

Smederevo Svilajnac Kragujevac

Uice

Kruevac Jug
Ni, Prokuplje

Pirot

Existing
In preparing
Corridor X

New incentives provided by the state

In Free Zones Corporate Income Tax = 0 Exemption from VAT on energy sources for production activities in the zone (Gas, Electric energy, Mazout, Coal)

Announced new incentives from the state

Exemption from the corresponding part of the salary tax Exemption from VAT on goods and services trade within the free zone

Free zone effects 2010/2011

Export increase for 32 % Companies in Free zones increase 17% Turnover increase 77 % Workers up for 60 % Investments up 275%

Export from Free zones in Serbia 2010

9%

0% 6%

SZ Pirot 12% 2% 51% SZ Subotica SZ Zrenjanin SZ Novi Sad SZ FAS iz Kragujevca SZ abac SZ Uice 20%

211 companies in Free zones in Serbia

Subotica

Novi Sad

Pancevo
Smederevo Svilajnac Kragujevac

Zrenjanin

Corridor VII

abac

Uice

Kruevac Jug
Ni, Prokuplje

Pirot

Sevojno

Corridor X

Free zone Subotica

The Subotica Free Zone is located in the northern part of Serbia - border with Hungary and the EU The E-75 international highway with rail line The Subotica Free Zone was founded in 1996 15 hectares of land 13.000 square meters of production space 26.000 square meters of closed storage space 313 square meters of office space City water supply, Two transformer sub-stations with 2x630 KW Telephone lines Projected connection to local gas lines

Free zone abac

Free zone position 25km from the highway E70, 30 km from the Bosnian border, 70km from border with Croatia The main economic potential are River Sava and Drina Total area of the zone is 3,991m, and will be extended this year. Greenfield area is around 2,3 ha Outdoor storage space 6,700m Indoor storage space is 5,000m. Free zone is fully equipped with infrastructure with wide range of logistic services.

Free Zone Zrenjanin

Zrenjanin Is the city in Vojvodina with most water flows in its area ( The Danube , The Tisa , The Begej, The Tamis, also the river canal network Danube-Tisa-Danube) which puts him among the most attractive cities for investing in Serbia, according to USAID, SIEPA and American Chamber of Commerce. The Free zone covers an area of 6 hectares 400m is for office space, 6000m for warehouses and 5000m for open storage space.

Free Zone Kragujevac

Free zone Kragujevac was founded on the 5th of November 2009, by the City of Kragujevac and FIAT automobile. Basically, this zone is founded to endorse the development of the automotive industry in Serbia. Free zone has around 157ha of land and includes total area of the automobile factory . There are 200 parcels intended for FIAT subcontractor companies

Free Zone Uice

Free zone Uice is founded by the City of Uice, Copper mill AD. Sevojno and Impol-Seval Aluminum mills a.d. Sevojno This is the 5th free zone founded in Serbia with many business benefits for all investors. The main economic potential is metal and metal processing industry.

Free zone Pirot

Established in 1996 Total area 103 ha 9 production and 100 trade entities with 5.000 employees Product export oriented free zone
main users Tigar A.D. and Tigar Tyres (part of MICHELIN group)

Services in free zone forwarding service and organization of intermodal transport Turnover within the Free zone in 2010 around 360.000.000 Eura

AWARDED - BEST OF SERBIA 2009-2011

Biggest export from Serbia

9 production plants - 8000 trucks per year

Benefits from local municipality

Construction activities investor is exempted of:
Fees for development of building land All taxes and expenses of Municipal Administration (communal fees, town planning permits, town planning approval, building permit, etc...)

During the utilization of facility for the period of 5 years investor is exempted from:
paying local communal taxes fees for using city building land 50% expenses for communal services shall be entitled to deduct the rental price of land in relation to the number of newly employed workers

Releases 50% of Property Tax for new users of the Zone

Releases 30% of the corresponding part of the Tax on salaries of workers employed in manufacturing companies which employ 200 or more employees.

Logistic and Intermodality In Serbian Free zones

Free zones and Logistic in RS

Law on Spatial plan of Serbia from 2010 to 2020 (Official gazette RS 88/10) http://www.rapp.gov.rs/media/zakoni/Zakon_o_prostornom_planu_RS-cir.pdf support all Free zones location for construction of intermodal terminals and recommend all free zone in view goods flow generators in article 327. Intermodal transport and logistic centers (page 272 in Law)
Strategy for development of rail, road, water, air and intermodal transport in Republic of Serbia from 2008. to 2015 (Official gazette RS 55/05, 71/05 i 101/07) http://www.putevi-srbije.rs/strategijapdf/Strategijatransport_lat.pdf in article 4.2. Guidelines for the development of intermodal transport (page 39) in accordance with EU guidelines are given for the consideration of locations (11 conditions) and define the necessary infrastructure (7 conditions) recommend terminal location in Free zone

Use of EU Model and Grants for construction

New project Intermodal Logistic Terminal on the Corridor X Free zone Pirot

www.usz.gov.rs
Zrn Vui, pmnik direktora l.: 011/311-73-93, zoran.vucic@usz.gov.rs Uprv z slobodne zn, mldinskih brigd 1, 11000 Beograd l.: 011/311-73-26, 011/311-73-27, Fx. 011/311-73-88