Foreign Investors Council in Serbia 2014/15

GUIDE TO

FOREIGN INVESTORS COUNCIL in Serbia 2014/15 2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 1

2 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 3

GUIDE TO

FOREIGN INVESTORS COUNCIL

6 THAT WHICH IS TOUGH, DON’T PUT OFF FOR TOMORROW DR MIHAILO CRNOBRNJA Professor at the Faculty of Economics, Finance and Administration 8

SRĐAN LAZOVIĆ Vice President of the Foreign Investors Council, Corporate and Regulatory Affairs Director for the CEFTA region and Bulgaria at British American Tobacco SEE d.o.o.

2014/15

ART DIRECTOR Ilija Petrović, i.petrovic@aim.rs PUBLICATION MANAGER Tanja Banković, t.bankovic@aim.rs SALES DIRECTOR Melita Andrejević, m.andrejevic@aim.rs

FREDERIC COIN FIC President and Executive Board President at Societe Generale Bank Serbia

JORGOVANKA TABAKOVIĆ Governor of the National Bank of Serbia

BUSINESS SECRETARY Nataša Nešić, n.nesic@aim.rs

PHOTOGRAPHY Zoran Petrović, Časlav Vukojičić TRANSLATIONS Mark R. Pullen Snežana Bjelotomić

PROF. DR ZORANA MIHAJLOVIĆ Deputy Prime Minister and Minister of Construction, Transport and Infrastructure 18 LEVELLING THE PLAYING FIELD

PROOFREADING Mark R. Pullen EXECUTIVE DIRECTOR Ruža Ristanović, r.ristanovic@aim.rs GENERAL MANAGER Ivan Novčić, i.novcic@cma.rs FINANCIAL DIRECTOR Ana Besedić, a.besedic@aim.rs PRINTING Rotografika d.o.o.

Segedinski put 72, Subotica FOREIGN INVESTOR COUNCIL IN SERBIA 2014/15

OVE FREDHEIM FIC Vice President and CEO of Telenor Serbia 22 OPEN TO THE SUGGESTIONS OF EMPLOYERS

PUBLISHER alliance international media in collaboration with the Foreign Investors Council of Serbia Makenzijeva 67, 11000 Belgrade, Serbia Tel: +(381 11) 2450 508 Fax: +(381 11) 2450 122 E-mail: office@aim.rs www.allianceinternationalmedia.com ISSN no: 1451-7833 All rights reserved alliance international media 2014.

30 W E’RE AWARE OF THE CHALLENGES

14 PERMITS WILL NO LONGER BE A PROBLEM

PROJECT MANAGERS Biljana Dević, b.devic@aim.rs Darko Novaković, d.novakovic@aim.rs Ivana Krsmanović, i.krsmanovic@aim.rs

WITH SPECIAL THANKS TO Ana Firtel, FIC Executive Director Milica Ðorđević, FIC Communications Officer Koviljka Mladenović, FIC Office Assistant

52 W E SUPPORT THE GOVERNMENT IN FIGHTING THE GREY EECONOMY

IMPROVING CONFIDENCE IN THE FUTURE

in Serbia

EDITOR Tanja Jakobi

26 NO GOOD LAW WITHOUT PROPER IMPLEMENTATION

34 F FISCAL CONSOLIDATION IS MORE IMPORTANT THAN EVER TONY VERHEIJEN World Bank Country Manager for Serbia 38 BETTER LEGISLATION, MORE INVESTORS MIKE FALKE Head of GIZ Legal and Judicial Reform Programme in Serbia 40 T OO LONG WAITING FOR PERMITS MAKES INVESTMENT POINTLESS DEJAN JEREMIĆ Executive Vice President of Operations at Delta Holding 42 ACCOUNTABLE TO NATURE AND SELF VUJADIN ŠĆEKIĆ General director of Jugo-Impex 48 B ANKING IS FIELD WORK SVETLANA TOLMAČEVA DINGARAC President of the Executive Board of ProCredit Bank

ALEKSANDAR VULIN, Serbian Minister of Labour, Employment, Veterans and Social Affairs

50 H EALTH IS OUR MISSION ANA GOVEDARICA CEO of Roche d.o.o. Serbia

4 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

GORAN PEKEZ, President of the Anti-Illicit Trade Committee of the Foreign Investors Council (Japan Tobacco International) 53 I NVESTING IN FUTURE PROGRESS KAROLY ECKER, Managing director Tebodin Hungary Kft. & Tebodin d.o.o. (Serbia) 54 N O COMPETITIVENESS WITHOUT MORE PREDICTABLE ENVIRONMENT MILICA STEFANOVIĆ President of the Food and Agriculture Committee of the Foreign Investors Council (Coca-Cola Company-Barlan S & M Ltd.) 56 NEW LABOUR LAW WILL OPEN THE POSSIBILITY FOR BETTER EMPLOYMENT DEJAN JEČMENICA President of the Human Resources Committee of the Foreign Investors Council (Wiener Städtische osiguranje a.d.o. Belgrade)

60 LAWS SHOULD BE ACCOMPANIED BY HIGHQUALITY BYLAWS RASTKO MALIŠIĆ, President of the Legal Committee of the Foreign Investors Council (Marić, Malisić & Dostanić o.a.d.)

61 RELIABLE PARTNER TO EXPORTERS DEJAN VUKOTIĆ, Director of the Agency for the Insuring and Financing of Exports (AOFI) 62 BETTER A TESTED SOLUTION THAN A HASTY ONE NEBOJŠA NEŠOVANOVIĆ, President of the Real Estate Committee of the Foreign Investors Council (Jones Lang LaSalle d.o.o.

Belgrade) 63 WE NEED TRUE COOPERATIVES RONAN CONROY General Director BPI d.o.o., Agri Business Partner d.o.o 64 E NSURING THE PREDICTABILITY OF THE BUSINESS ENVIRONMENT IS NECESSARY BILJANA BUJIĆ Vice President and Acting President of the Taxation Committee of the Foreign Investors Council (KPMG d.o.o.)

65 SUCCESSFUL, DESPITE EVERYTHING

57 LAWS SHOULD NOT CONTRADICT EACH OTHER DARKO SPASIĆ, Managing Partner, Partnership law society Spasic & Partners 58 LEASING COULD FUEL AGRICULTURE GROWTH CHRISTOPH LEITNER President of the Leasing and Insurance Committee of the Foreign Investors Council (VB Leasing d.o.o. Beograd) 59 IN CRISIS QUALITY IS RECOGNISED

NEBOJŠA JANIĆIJEVIĆ CEO and President of the Executive Board of Intesa Leasing Belgrade Beograd

RITA LOZINSKY CEO and director general of ALUMIL YU INDUSTRY AD 66 E-GOVERNMENT KEY TO REFORMING SERBIA'S STATE ADMINISTRATION ZDRAVKO DRČELIĆ President of the Telecommunications and IT Committee of the Foreign Investors Council (Hewlett Packard d.o.o.)

68 BETTER QUALITY DIALOGUE MEANS BETTER LEGAL SOLUTIONS ANA FIRTEL Executive Director of the Foreign Investors Council

COMMENT

VIEW TO 2014/15

That Which is Tough, Don’t Put off for Tomorrow DR MIHAILO CRNOBRNJA Professor at the Faculty of Economics, Finance and Administration

Ahead of the government is a difficult task of combining the incompatible – introducing tough austerity measures and stimulating economic growth and employment. This first part will be a crucial test in an area which the government has not yet ventured in to, while on the latter positive steps have already been made in the regulation of the business environment

T

he next two years will be difficult, extremely difficult.

The problems faced by the Serbian economy and the Serbian state are complex and multiple. The big problem is that for the two main ills - unemployment on the one hand and fiscal debt and deficit on the other – the medicines are diametrically opposed! The recommended remedy for addressing the fiscal deficit and external debt is savings and spending cuts. The remedy for increasing employment is increasing spending, especially investment. An example of the connectedness between desired and undesired effects: the proposed reduction in salaries and pensions, as part of fiscal consolidation, reduces purchasing power, thus demand for goods which, if there is no export as compensation, reduces production and leads to redundancies. In addition to this, it also reduces the revenue side of the budget due to lower taxes, particularly VAT. Another example: the interest rate is among the highest in Europe. This encourages savings, but discourages the investments necessary for growth, development and employment.

In order for the list of challenges to be complete, mention must be made of the stagnation of the European economy, which more than half of Serbian exports head, and in the CEFTA countries, where an important segment of our exports also go. There is also a very tenuous situation in Ukraine and the possibility of imposing sanctions on Serbian export or import, by either one side or the other.

Obviously, it is not and will not be easy for economic policy makers. That carried out to date suggests the possibility that the mentioned problems will be solved in due course. This started with serious work to create a better business environment.

The new labour law, bankruptcy law, revised law on privatisation, reducing the procedure for opening companies and launc-

hing projects are good indications. Furthermore, the process of harmonising legislation with that of the EU will certainly bring some better solutions, especially for business leaders.

Also on the list is reducing the expenditure side of the budget. That will be a crucial battle. Not only because of the announced reductions in pensions and wages, but rather also because of the denial of support to enterprises that will have to be shut down, and there are many. Apart from a few exceptions, in a market economy enterprises must be left to the whims of the market and not the state budget. Social policy is not led by artificially propped up companies.

On the side of curbing expenditure, it would be good to introduce more social justice in tax abstraction and reducing salaries and pensions. This measure would probably make the bitter pill a little easier to swallow. On the side of stimulating production and employment, sectors and activities where we have, or could have, a comparative advantage should be encouraged.

It makes no sense to encourage employment among the "economically disabled" companies that have been losers for decades and "feed" off the budget.

In addition to repairing the business and investment climate, which will encourage both foreign and domestic investment, there will have to be a continuation of the search for potential investors in Serbia and the promotion of comparative advantages. And that should be done on all sides the world. BRIKS, for example, is taking all places on that global scale and our "breakthrough" in this group is relatively symbolic.

Serbia’s strongest current political party won the last elections with the slogan "Our strength...". In order to achieve their pre-election promises, they will really have to act decisively, quickly and with all their strength. Otherwise the agony will continue. ■

Serbia’s strongest current political party won the last elections with the slogan "Our strength...". And that is the only way to realise the results it promised

6 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 7

INTERVIEW

Improving Confidence in the Future FREDERIC COIN FIC President and Executive Board President at Societe Generale Bank Serbia

For years the FIC has been advocating a number of reforms to push Serbia in a more business-friendly direction.

With an unprecedented parliamentary majority, the new government has the opportunity to make good on its earlier promises to current and wouldbe investors. But above everything, consistency of implementation is vital

W

Foreign Investors Council President Frederic Coin says the FIC fully supports these measures.

However, the council is keen to stress that the success of any new reforms is dependent on how the government secures their implementation from top to bottom.

ith the new Serbian government having secured strong political backing in parliament, investor expectations – not to mention those of citizens – are ► How would you rate the investment environequal to the support enjoyed by the leading coaliment in Serbia today? tion party at the election. Prime - If you look at the situation as of Minister Aleksandar Vučić and today, it is obvious that there is a his cabinet have announced bold For businesses and people, the day- lot to do to improve the overall reforms in line with FIC recomenvironment. We at the to-day reality of the implementation economic mendations. Among the measuFIC are not the only ones to say it: of laws is what counts res proposed are plans to cut the if you look at World Bank Doing budget deficit and public debt, Business report, Serbia’s ranking with the aim of bringing about macroeconomic stais still far from the level we should be expecting. bility and predictability, and a package of laws desiThis stems from the long-term situation in Serbia gned to secure a level playing field for businesses. and there is much to do to improve the overall le8 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

CONSISTENCY

LAWS

STABILITY

The FIC is advocating consistent implementation of laws and bylaws and the same rules for both public and private companies.

We already have the first reform package adopted by the National Assembly and that is a big step forward.

Macroeconomic stability is important for investors because it leads to predictability, meaning businesses can plan ahead of new investments.

gal framework, but the implementation is really the ► How much progress has been made in harmokey. Better implementation of laws means bylaws nising Serbian legislation with that of the EU? according to the spirit of the main laws; it means in- In terms of EU harmonisation work done, for a terpretation of all laws and bylaws being consistent certain period of time we have already been moand, once again, according to the spirit of the laws; ving towards convergence. Of course, there are a and it means public administration that is efficient certain amount of things to do, but the key here is and managed properly. not only harmonisation, but more In Serbia the public sector’s the reality of implementation. We The debt situation is not so share of the economy is extremely often see cases in which laws are dangerous today, but what high compared with the rest of the largely harmonised but ultimately region, and this is a key point also. their real implementation is far represents a problem is its For a long time now we have been from the spirit of the law. For busigrowth tendency advocating a level playing field, menesses and people, the day-to-day aning the same rules for everybody, reality of the implementation of both public and private companies. these laws is what counts.

There are many other things the FIC is advocating, but these ► The FIC has underlined macrotwo are the main ones. economic stability as one of its priorities. What are the prospects for maintaining such stabili► It’s been four months since the ty in the current environment? formation of the government.

- Macroeconomic stability is imWhat do you think of the work portant for investors because it the government has done so far leads to predictability – and this is and the results accomplished? a magic word in the world of busi- Four months is both a long and ness because any kind of private short period when it comes to a new business aims to plan its activities, government. In between we have revenues etc. ahead of new inveshad the floods, which were a territments, which requires predictable issue, of course. That said, there bility. Predictability is knowing where to go, and is a strong political majority in the parliament, so of knowing where to go means you can anticipate and course people’s and investors’ expectations are equal plan correctly. So macroeconomic stability is vital. to the size of that political majority – we expect a lot.

To help ensure long-term macro stability, the The new government and prime minister have FIC has been pointing to a certain number of recommented a lot on their desire for reform. Since forms for a while. Education, health, pensions, and the election things have been going in a direction I would add a judicial system that is not working the FIC has been advocating for. We already have properly – these are key reforms. the first reform package adopted by the National Of course in the short term the rising public deAssembly and that is a big step forward. The amenficit and public debt is not sustainable. Unfortunaded Labour Law endorses 65% of FIC White Book tely in recent years we have seen what can happen recommendations and we expect it will lead to to countries that are unsustainable on that level. better protection of rights for both employers and The situation in terms of debt is not so dangerous employees, as well as bringing the Serbian labour today, but the trend is an issue – and for a country market closer to modern global standards and prathat is relatively small, and with Serbia’s standard ctices. It is also very important that the government of living, and let’s say the level of development, the has continued in that direction and adopted new markets will not accept the same levels of indebtedlaws on bankruptcy and privatisation. Now, of courness as they will in big countries. se, we will be vigilant about the implementation, We cannot go to that level; we need to show because for us this really is key.

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 9

that the curve will be curbed immediately. In order to achieve that, the public deficit needs to be cut.

The government looks committed to that, including both the prime minister and the finance minister, so hopefully some measures will be taken there. It is not easy but it is necessary.

How much would resolving the issue of companies undergoing restructuring and the privatisation of some of the larger state-owned companies contribute to creating a better economic environment?

►

How does the FIC view the progress made in creating a responsible and efficient public administration?

- The fact the deputy prime minister is working on that is a good sign of the new government’s willingness to address this important issue. Making these changes is a difficult task, and the public administration, like all institutions, is trying to protect its power. So you need to have the political willingness and courage to address this. There are some approaches used in private companies that can be applied to public administration. To have objective targets that are assessed and followed up are natural for me, but difficult to apply in the public sector – and not just in Serbia.

►

Are the proposed measures to curb the grey economy enough of a step in the right direction and what are your recommendations to the government in this regard?

- I think this problem is easier to address compared to previous mentioned. The measures the government is starting to take by redirecting some of the Ministry of Finance workforce from one sector and put in controls is definitely a good move. Of course, control is not enough, because in order to have good control, you need to apply clear rules. These two things should work in parallel, but I think enforcing control is a good move.

It is important for the government to work on rules that are transparent, clear and without too much space in terms of administrative interpretation. Only then we have can you have efficient controls. ►

- By working to solve these issues For a long time now and reducing the size of the public been advocating a level playing sector you will equalise the level of competition in the market. For ► Last year the FIC praised the field, meaning the same rules for me and the FIC, that is the target. progress made regarding chaneverybody, both public and It is more efficient to have equal ges to the tax laws. How do you private companies rules for everybody because then view these changes from tocompanies can fight to improve day’s perspective? their ways of working, and with no distortions of - In terms of the legal aspect, tax laws have been the rules, bring value to consumers and society. more or less harmonised with European laws. From Also important is the usage of the government’s our point of view it is not so much the laws themscarce resources. If they can solve the issue of public selves or the framework itself that is an issue, but companies in restructuring – and restructuring is a again the way it is interpreted and implemented. It nice word for companies that are almost dead and is not always consistent, it is not systematic and it just kept alive by giving them subsidies – they could again opens the door to free space for the adminiuse those subsidies for better investments, which at stration to interpret things, which creates uncertathe end of the day is good for all of society. Of course inty for investors. there will be some short-term impact, and of course Here we are again discussing how clear things the government will have to address the question of are, how they are implemented and my second key how to help those who are currently working in thepoint: predictability. What is an issue for us is when se companies during the transitional period in which new rules are created and implemented immediathey will unfortunately lose their jobs; to help them tely. What happened last year was abolishment of to survive that period and improve their skills in ortax credit for investments in fixed assets 15 days der to find a new job. Obviously, though, it is not easy. before the end of the year and made applicable im10 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

ns.

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mediately. It is unacceptable because it alters your business plans, and you are affected.

and certainly in the longer term. Sometimes certain reforms, and addressing the public deficit is one of them, will have a negative short-term impact regarding effective economic activity. ► How much would a more flexible labour market, We‘ve seen this in my business at Societe Gewhich you have been advocating, increase emnerale Bank Serbia: when you have public compaployment, and, in this regard, what do you think nies firing people, or giving them smaller salaries, of the amendments made to the Labour Law? it has a negative impact on our activities in the - Changes to the Labour Law are something the short term. It’s the same for retailers and elsewFIC has been advocating for around 10 years. So of here. But once again, as long as we are convinced course when we see that this difficult, sensitive rethat these are good mid- and long-term measures form happened, we are happy to see a willingness to finally improve the country’s competitiveness to tackle the issue and even happier to see a large and performance, we majority of prior FIC reknow that at the end commendations present in of the day the stanthe new Labour Law, includard of living in soding the key ones. Of courciety will see the bese, there are still a few that nefit in the long term. haven’t been taken up, but I don’t think any generally speaking it really investor here, who deis going in right direction. cided sometime ago With an official unemto invest in this counployment figure of 21%, try, will think after six things are not working months, one year, a well as they stand. For year and a half to leave companies to hire more the country because of people, they need to be the short-term impaconfident about the near ct on their business. future in terms of their It might unfortunaactivities. As I’ve said, this tely delay a few new is one area in which reinvestments in new form should all contribute fields because people with the goal to improve will wait a bit, but it is confidence in the future. certain that if the reforms go in It shouldn’t be a jungle, but haEducation, health, pensions, and I a good direction, are understood ving rules that allow companies and investors believe they will be to recruit and also allow them to would add a judicial system that is implemented properly, it will crefire people in those unfortunanot working properly – these are ate a positive environment and a te moments when they need to, key reforms positive opinion about the counall without paying for the whotry’s future, which will bring addile working history of somebody tional investment. And those investors that are here who has already taken several severance payments, already will see the light at the end of the tunnel looks logical to me and a step in the right direction. and, of course, will continue with their business.

It is not to have a system in which people are slaves.

Nobody wants that; companies only want to have a staff that is well-trained, happy to work and able to ► What are your main expectations for the codeliver good performance. ming period?

- We think there is a need for reforms in certain fields and to improve the business environment. ► If the government were to adhere to tough auThe main keywords are sustainability and predictasterity measures, it would entail a drop in the bility. But of course, as I’ve said several times alrepopulation’s purchasing power, at least in the ady, to be sure that will happen, implementation short term. Which have a greater effect on foreand the ability of the government to demonstrate ign investors – the short-term or long-term effeit can implement bylaws according to the spirit of cts of austerity? the laws, as well as having an administration that - We are advocating for reforms that will improve applies them properly, is vital. Implementation is the overall business environment. These reforms the keyword from my point of view. ■ will hopefully bring results in the medium term, 12 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 13

INTERVIEW

Permits Will No Longer be a Problem ZORANA MIHAJLOVIĆ Deputy Prime Minister and Minister of Construction, Transport and Infrastructure

With the adoption of the new Law on Planning and Construction, Serbia should eliminate one of the biggest complaints of foreign investors - long waits and complicated procedures for obtaining building permits - and gain a much improved position on the World Bank's "Doing Business" list, as well as encouraging investment in the construction industry

Z

orana Mihajlović Deputy Prime Minister and Minister of Construction, Transport and Infrastructure, is tackling three key issues that have hindered economic growth in the previous. First is the adoption of a functional law on planning and construction, with which the procedure for obtaining building permits will be a simplified which also envisages the adoption of a whole set of bylaws and the reform of competent services, which will reduce the process of acquiring permits from two to four years down to 28 days.

The second is accelerating work on key road transport sections in Serbia: Corridor 10, the completion of which will see the transport system of the Republic of Serbia become compatible with the transport system of the European Union; and Corridor 11, which represents the link between Serbia and Montenegro, or Belgrade and the Southern Adriatic, and in the broader context links Romania, Serbia, Montenegro, and Italy. And the third is the reform of public enterprises. "As Minister of Energy I insisted on the reform of public enterprises and I'll do that now as Deputy Prime Minister and Minister of Construction, Transport and Infrastructure", says Mihajlović. "Public companies manage huge state resources and money, and in

many cases generate losses and have a surplus of employees in administration, as well as a lack of production."

The government has made a decision on the merger of Koridora Srbije (Corridors of Serbia) and public enterprise Putevi Srbije (Roads of Serbia), while Serbian Railways expects the further separation of cargo and passenger traffic.

I believe that building permits will no longer be one of the first observations mentioned in every conversation with foreign investors

What are the most important innovations in the Law on Planning and Construction, when it comes to encouraging investment in the construction industry?

- Serbia currently occupies 182nd place on the World Bank's Doing Business list in terms of the speed of issuance of building permits, which is unacceptable for a country where investment needed and which wants to develop faster. I believe that we

14 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

►

PUBLIC DEBATE

For key reform legislation broad support is essential, and that's why an opportunity must be given to the public and interested organizations to voice their opinion.

REFORMS

CONVERSION

As Minister of Energy I insisted on the reform of public enterprises and I'll do that now as Deputy Prime Minister and Minister of Construction, Transport and Infrastructure.

We are trying to do what is correct and to do so in the best spirit of European practices, but we still have certain doubts, because in the draft law we predicted conversion with and without fees.

will, with the adoption of amendments to the law on planning and construction, succeed in changing that and that building permits will no longer be one of the first observations mentioned in every conversation with foreign investors.

With amendments to the law, the field of construction will be reformed, with simplified procedures for obtaining building permits and fees for urban construction land abolished. Procedures will be shortened from the current two to four years of waiting to 28 days, a one-stop-shop will be introduced for permitting, and from next year an electronic publication process will begin. In the amended law location permits will no longer be an administrative act and, of particular importance, state authorities will be required to obtain documentation, instead of investors doing that themselves. ► You

have announced that building permits will be received in 28 days. What changes in the work of state and local government institutions does this envisage?

- The unified procedure for issuing permits envisages different internal organization of all all organs that apply that law. Bearing in mind that the role of individual organs has been changed significantly, some services, especially inspections, will be strengthened significantly, and this will be possible to do through the reallocation of existing staff. Moreover, the introduction and implementation of an electronic tracking system entails the introduction of new programmes and the provision of technical support.

over urban construction land, this has not been removed from the new version of the law. What are the reasons for its retention?

- In the past Serbia did the opposite of what was needed and that was done by our neighbours in terms of conversion. In Croatia they first addressed conversion, and only then entered privatisation. With us it is the opposite. Now we are trying to do what is correct and to do so in the best spirit of European practices, but we still have certain doubts, because in the draft law we predicted conversion with and without fees. I believe, however, that other innovations brought by the law are more important than conversion rights. ► Adoption of this important law followed a relatively brief

public debate. What is the main reason for this and do you think the public debate yielded a high enough quality range of suggestions and criticisms?

- I personally insisted that the draft law be subjected to a public debate and not adopted according to emergency procedure. Experience has shown that in this way you always get some suggestions that can improve the bill, which is our goal.

In addition, for key reform broad support is also essential, and for that you need to give a chance to the public and interested organizations to make their own judgement. After completion of the public hearing, the draft was sent to all ministries for review, and after obtaining those opinions, all objections and suggestions will be merged and the final text will be sent to the government for consideration and adoption.

All bylaws that accompany the Law on Planning and Construction will be adopted by March 2015

Although one of the most significant demands of both domestic and foreign investors was the removal of the provision of the conversion of usage rights for property rights

►

► One of our greatest shortcomings is a lack of appropriate

bylaws and procedures that accompany laws. What will

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 15

your ministry undertake in its department in order to overcome these problems and what sort of legislative activity are you planning for the ministry?

- In the previous Ministry of Energy we insisted that regulations be prepared together with the laws, and that's also how we will work in the Ministry of Construction. This shortcoming exists in other countries, not only ours, but we will try to be faster than others. All bylaws that accompany the Law on Planning and Construction will be adopted by March 2015, and those related to the issuance of building permits will be completed no longer than a month after adoption of the law, which should happen by the end of September.

Your ministry is also responsible for the construction of road infrastructure, the lack of which has represented one of the biggest obstacles to investment. What kind of dynamics can you announce in this regard?

- Viewed strategically, the most important task is completion of Corridor 10, which must be built by 2016. Work on Corridor 11 has been accelerated on the Ub-Lajkovac section and construction has begun on the section that links that, from Obrenovac to Ub and from Lajkovac to Ljig. State-owned enterprises in the transport sector are working on projects worth about three billion euros, and it is in our interest that these projects are implemented faster and more efficiently, because otherwise we will pay penalties as a state, which was also the case in previous years. We found a situation where, of all the projects started, practically only one is likely to be completed on time, and that's the Zemun-Borča bridge.

Because of that we introduced mentors for all major projects, while ministerial teams tour the works every seven to ten days.

We are also compiling "black and white" lists of sub-contractors, in order for us to prevent firms that fail to meet deadlines on existing projects and don't respect contracts from acquiring new jobs with the state. That's how work was done to date and the result of that kind of practice is that not one project was fully completed. This has now stopped.

►

► What goals do you intend to achieve with

the licensing of construction companies?

- The system of licensing construction com-

panies is not new. It should ensure that the highest quality firms gain work, according to the classification and purpose of a facility, or according to the type of planning document that is produced.

How much GDP growth could Serbia achieve in the following period from the construction industry?

- It is estimated that, thanks to changes in the law, the share of the construction industry in GDP could increase from four to six per cent.

We must not forget that the construction industry has suffered extensive damage due to abuse in the privatisation process, after which came the economic crisis, with its consequen►

Thanks to changes in the law, the share of the construction industry in GDP could increase from four to six per cent ces. The recovery of the construction industry will be neither easy nor quick, but it is possible, because there are still professional staff, knowledge and resources, and today the state regularly meets its obligations towards road-building companies. We will support the formation of a consortium of road-building and construction companies, which would perform together on tenders for works in Serbia, because not all companies can provide the guarantees that are sought. ► When could the introduction of electronic

building permits reasonably be expected?

- The deadline set by the law is by 2016, but

16 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

we believe that job can be completed earlier, during the course of 2015. Immediately after the adoption of amendments to the law we will commence with the establishment of the system of electronic issuance of construction permits, because the new law will create conditions for that.

When do you think it will be possible to expect the beginning of the corporatisation of public enterprises and the appointment of professional management?

- As Minister of Energy I insisted on the reform of public enterprises and I'll do that now as Deputy Prime Minister and Minister of Construction, Transport and Infrastructure. Public companies manage huge state resources and money, and in many cases generate losses and have a surplus of employees in administration, as well as a lack of production. In the energy sector some companies have already completed that process, such as Transnafta and EMS. EPS has started that process, but not fast enough, while Srbijagas is late in launching any kind of reforms.

And in the Transport Department there will also be major changes in state-owned enterprises. At the end of May Serbian Railways completed the first phase of restructuring and we are now awaiting further separation of cargo freight and passenger traffic. The Government has also decided on the merger of Koridora Srbije (Corridors of Serbia) and public enterprise Putevi Srbije (Roads of Serbia).

In this way we will get a single enterprise that will be better organized and more efficient, and we will no longer have a situation where one company provides the terms of reference, the other appears as an investor, and mistakes in the management of a project means we lose a lot of money as a country. We started to introduce order to project design and have initiated the introduction of project oversight. Due to poor project design, just on jobs carried out by Corridors of Serbia, the state spent at least €70 million paying for additional works and compensation claims. As a comparison, that is the same as the cost of building an entire section on Corridor 11, specifically the Ub-Lajkovac section. In the world it is possible for the price of a project to deviate by five per cent, but not by 20 or 30 per cent. That shows either a lack of expertise, or the complete absence of responsibility and conscience. ■ ►

generali.rs 2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 17

INTERVIEW

Levelling the Playing Field OVE FREDHEIM FIC Vice President and CEO of Telenor Serbia

The FIC Vice President is confident that more needs to be done to allow Serbia’s business environment to flourish. He is calling for a level playing field, reform of the public sector and the making of a durable and transparent business framework

T

he Foreign Investors Council shares Serbian Prime Minister Aleksandar Vučić’s impatience regarding the implementation of new laws, but understands the government's view that it isn’t an easy task and that there are no quick fixes. However, it is important that the state moves more quickly, given the need for a level playing field for businesses, with clear procedures from top to bottom in public administration.

► Which areas over the previous period have recorded progress when it comes to applying the rule of law and creating a favourable business environment? And where should the government invest more effort to better comply with European business standards?

- The new government is good at establishing a new legal framework, but the legal framework alone is not enough. When it comes to implementation there are significant shortcomings. At this year’s Reality Check Conference you perhaps heard stronger language than we’ve been using before, and that is because the imple-

mentation of laws is lacking. And when we talk about implementation, we divide it into five specific areas we want to focus on. Number one is the creation of a level playing field. In this area we are, among other things, pointing to privatisation and activities involving state-owned enterprises.

From a private investor’s perspective, the level of state ownership and how things are conducted in Serbia when it comes to governance models and potential privatizations of state owned companies should be more transparent.

Therefore the government should strive to establish European-class, perhaps world-class ownership policies for entities the state chooses to retain, and conduct sale processes in other companies that should not remain under state ownership.

Secondly, when we talk about implementation, we talk about reforming the public sector, namely: pensions, healthcare and the education system. Generally

The government is good at establishing a legal framework, but that alone is not enough, the implementation of laws is lacking

18 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

SUBSIDIES

ISSUES

TELECOMMUNICATIONS

Subsidies can play an important role but are the opposite of a level playing field, and should be looked upon as such.

Collecting needed information for permits of all kinds is an issue, and the same goes for the consistency of the taxation system at both local and state levels.

The penetration of modern telecommunication services mirrors GDP growth and this is the message the FIC is trying to convey. The telecom sector contributed 4.85% to the GDP in 2013, which shows how significant a contributor to the economy it is.

access to labour and work resources is on a high level, but when it comes to having the right skills profile, we need a reformed education system. In short, every modern society needs those three institutions to properly work, and there we have an issue.

The third specific area is to create a durable and transparent framework. Again, it is a broad term and revolves around legal aspects, regulation and similar issues. Serbia is now following its EU accession path and has a great opportunity to use that process, with all the money and funding that goes with it, to absorb knowhow from the EU system and implement significant reforms.

Fourth is to increase predictability.

Again, it is to do with laws the government and parliament are now deciding upon and adopting, and having joint alignment with the state bureaucracy. But adopting one law is never enough – it is about implementation and then expert monitoring of how the entire bureaucracy is working to follow the line. Here we have a long way to go.

At the Foreign Investors Council we understand that the government does not have an easy task. It is about putting these monitoring systems in place, to have a dashboard that highlights progress. We share Mr. Vučić and the government’s impatience on this one. Fifth and finally, we have daily examples of things that are overcomplicated with unnecessary bureaucracy – it shouldn’t be that way.

- I think we tend to forget that the White Book is well recognised by all Serbian public servants whose thoughts are key to improving how we do business in Serbia and the interplay between the public sector and business. It is looked upon as a manual in which the best efforts of regulators, the public sector and companies come together to point out what kind of progress has been made and what steps should be taken next. A massive amount of knowhow and resources go into that effort that ends and concludes with the book. It is a valuable piece of work summarised in one document.

It is a huge responsibility for the Foreign Investors Council to keep the quality level up, and I think how we work to put it together does just that. It is a concerted process in which we talk with public sector representatives, regulators, everybody involved, and they recognise that their feedback has been embraced and included in the book. The White Book has become a strong brand in Serbia and the government and state administration appreciate what the Foreign Investors Council puts into the entire process.

We need to establish government ownership based on modern policies and good governance for conducting state ownership

► What

makes the White Book a reference point when it comes to assessing the progress made in implementing market reforms in Serbia?

► How

can the state strike a balance between subsidy provisions for new investors and advancing economic environment overall?

- Subsidies are the opposite of a level playing field and that is how we should look at them. However, they can play an important role for a period of time as a means of kick-starting an initiative to develop a certain sector or geographic region of Serbia. But what we need to look at is whether a level playing field is created by following

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 19

that subsidy framework. In general, we would say that we want to avoid subsidies. Instead, we want the government to establish a general economic framework in which companies and business investors can engage on equal terms.

► Chapter 32, the first EU accession chapter up for negotiation, relates indirectly to supervising the work done by public enterprises. How much will Chapter 32-related reforms help when it comes to setting equal rules for all market players?

- I think it is a very important chapter and relevant to Serbia because it has a long list of state-owned companies that are now on the for-sale list. That list includes assets that are difficult to exclude, running with negative financial performances and representing sectors that work in old-fashioned ways. The public sector is putting huge amounts of money into keeping their activities going. We need to establish government ownership based on modern policies and good governance for conducting state ownership. There is nothing wrong with state-owned companies as long as it is done in a proper way. ► How easy is it today for investors

to recognise the government’s economic policy and collect the information required to make business decisions?

- This is different from one sector to the other, but in general we still have a way to go. The bigger organisations have capacities to deal with this issue, but for smaller foreign companies it remains difficult to recognise the government’s economic policy and collect the information required to make business decisions.

If Serbia wants to progress, we need those smaller and medium-sized companies to come here and invest. Collecting needed information on permits of all kinds is an issue, and the same goes for the consistency of the taxation system at both local and state level.

The Ministry of Telecommunications and Trade has recently underlined that, apart from digitalisation, its key priority is to create a state telecommunications network as a precursor to the privatisation of Telekom Serbia. What recommendations would you make to the government in terms of regulating the telecommunications market?

- The penetration of modern telecommunication services mirrors GDP, and this is the message we are trying to convey. Telecom sector contributed with 4.85% to the GDP in 2013 which shows how significant contributor to the economy it is. Be modern, be forward-thinking and, in a way, be a little bit brave in regards to how you regulate this sector. And in that, today in Serbia we are lagging behind when we compare ourselves with other countries in the region.

Here at the Foreign Investors Council we are offering concrete recommendations on what should be done with a goal to facilitate growth of telco industry as one of pre-conditions for raising competitiveness of the country as a whole. So our message is ‘get going, get started’, and we’ll be sure to support forward-thinking regulation from our side.

►

If we are to engage investors in building infrastructure projects, it needs to be a very transparent process

What recommendations would you make to the government in terms of managing large-scale infrastructure projects?

- Unfortunately, Serbia was hit by flooding recently, but in a way this is a reminder that we need a good framework for managing infrastructure projects, because rebuilding the areas damaged by the flooding is ongoing.

The first thing we need here is transparency. If we are to engage both domestic and foreign – either European or global – entrepreneurs and investors in building bigger infrastructure projects, it needs to be a very transparent pro-

►

cess because they won’t be coming with their machinery and money if there is no clear picture – and we have couple of examples from the news in which this was the case. If there is any uncertainty, it isn’t good. So there shouldn’t be any hidden agendas, just clear straightforward procedures. ► Last year the FIC praised the adoption of the new Law on Public Procurement. How would you rate its implementation from today’s perspective?

- We were positive about that law and now we are going to give a formal assessment on how it has progressed in the next White Book. Again, the law only gives directions, and though there are some positive signs regarding its implementation, there is still a way to go.

► How

much has the implementation of e-government processes contributed to a reduction in red tape and moved Serbia closer to the processes investors experience in other countries?

- Here we have positive signs, and this process is actually progressing well. Again, there is a huge agenda and we must go forward with ambition in order to really utilise the technology to its maximum. But e-government is prospering and was well utilised by the national tax authorities, having a positive effect on both governments and private individuals. ■

20 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

INTERVIEW

Open to the Suggestions of Employers ALEKSANDAR VULIN Serbian Minister of Labour, Employment, Veterans and Social Affairs

In the next year the Ministry of Labour, Employment, Veterans and Social Affairs intends to adopt the codex of labour legislation – a series of laws though which all areas that do not belong to the sphere of work will be governed by special laws and consider the establishment of special courts functioning according to the German model

A

fter the Labour Law, which introduced order to the sphere of labour relations, the Ministry of Labour, Employment, Veterans and Social Affairs has announced the continuation of live legislative activities that directly reinforce the labour legislation. "This ministry is open to all suggestions from employers that would make their work easier and speed up employment," says Minister Aleksandar Vulin.

► What would your opinion of amendments to the Labour Law enacted in terms of regulation of labor relations?

- They have already done! Since July recorded a significant increase in official employment.

It is of course the people who are already working, and now the employers because of the work and incentives for reporting workers saw them worth report .. Labor Act showed that employers had better have registered and satisfied workers. Of course, our inspection work is very up to date, and is constantly on the field. The

message we send is that it is better to work with the state, rather than against it. We in the Ministry and employers are on the same mission and we want to help each other. Anyone who hires a man in me an ally. ► You said that employers, if you obey the law, you have the allies and interlocutors.

What does it mean?

- All employers who regularly pay their contributions, salaries and tax liabilities invite you to contact me and tell me how we can assist them, simplify procedures, introduce special officers for dealing with urgent requests. A few times I've instructed employers this appeal but did not receive adequate answers.

The Law on Civil Servants and the Law on Salary Scales will be adopted quickly and will follow the spirit of the Labuor Law

22 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

INICIATIVE

PREDICTABILITY

REPRESENTATION

We are completely open to all initiatives of employers that would ease their work, and we invite them to send us their suggestions.

Amendments to the Labour Law have introduced predictability in the domain of labour relations, which is good for both employers and trade unions.

Trade unions and employers need to bolster their organisations for them to be really representative.

► What the Government intends to take to equalize the position of private and state-owned enterprises, and public administration in the field of labor relations?

- The Law on Civil Servants and the Law on the salary scale will be very quickly bring, certainly before the end of the year. But they could not be changed before the enactment of the Labour Law, which is a framework law, and these two regulations will follow its spirit. Of course, workers in the private and public sector can not be completely equal because the collective agreements will be governed by the specificity of certain tasks, but the basis of the minimum are now clearly established.

What further actions can be expected with regard to the harmonization of labor legislation Serbia and the EU? - I think all serious business representatives extremely pleased to changes in the employment law and there will be more. We need to coordinate our activities with the European directives and it is a living process.

In this regard, I have to say this: my mistake was that I allowed myself to listen to the unions and not to speak about rental agency workers at all. But that must be done because 60,000 people work through these agencies and it is not logical for that to be unregulated.

And now there are some legal provisions that deal with these issues in part, but they have been trampled by time, and in essence that is deleted space that allows the fact that now, when you get to a petrol station, one employee is working for 20,000 dinars, while another, employed through an agency, earns 15,000 dinars. They must be equal and that’s why we will alter this regulation at the first opportunity.

The ministry addresses very serious companies that have grown accustomed to serious legislation in their own countries and cannot find their way here, where anything goes and nothing can be done. We have changed that with the Labour Law and I want to thank

►

all the employers who offered us support and gave us suggestions on how to better regulate this area.

In the next year we will adopt the codex of labour legislation. The current Labour Law has over 200 articles and only 60 or so relate to the regulation of relations in the workplace, while the other articles relate to the work of trade unions, socio-economic council, mobbing. In the the next year we want to adopt a codex of labour legislation where all those areas that do not directly belong to the sphere of work will be regulated by a special law: on trade unions, on strike action, trade union representativenes, the socio-economic council, social entrepreneurship etc., all of which should be taken from the Labour Law. Then everyone will be able to apply the labour law and if they want to take care of new mothers there will be a special law to deal with that.

► How, in your opinion, can foreign investors contribute to strengthening the rights of employees?

- Foreign investors bring experiences gained in the countries they came from. As a rule, they have better organized unions and protect workers' rights better than we do here. I spoke with the unions about that and their experience is like this: the foreign investor is typically a tougher negotiator in concluding a collective agreement, but when it is concluded they respect it, and on that side I am very satisfied. There are countries where unions do not exist, then here you have a problem to organize a union, which is our constitutional category and our ministry is working on it. Serious employers always seek to respect a union, while less serious ones bypass them.

A union is useful because it allows the employer to ensure the terms of an agreement with it are respected and that they have predictability in their work.

The cumulative effect of government incentives, new labour legislation and labour inspections has already yielded results in reducing the number of illegal workers

► What can your ministry do in its capacity to simpli-

fy the law on foreigners in the area of facilitating their employment (residence permit, work permit)?

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 23

- We're working on that right now and by the end of the year appropriate regulations will be adopted and I can say that we have adopted a number of suggestions we received regarding this.

What measures does your ministry have available concerning the accelerating of the settlement of labour disputes?

- None at all, but my idea that has been forwarded to the Ministry of Justice is to establish a court for labour relations. In the previous law we had a measure whereby all labour disputes had to be completed within six months, but none one dispute was resolved during that period.

We abolished it from this new law.

It would be meaningful to me if employers' associations supported the establishment of labour courts, according to the German model.

►

► What measures from your domain do you intend to take in the field of combating undeclared work?

- We estimate that about 30% of workers are working illegally and we are aware that this is a huge figure. A company that does not register its workers is much more competitive than those that regularly meet their obligations and that is an anomaly we must correct. The Serbian government has adopted very supportive measures for the registration of workers and as a ministry we will work on both sanctioning and preventative policies.

My instructions to the labour inspectorate was not to immediately sanction enterprises with workers employed on the black, but rather to give them a deadline to correct that.

We will not close down businesses.

We will not leave people without jobs, but workers must be registered. In addition to existing measures, we will introduce some very logical measures to combat unregistered employment, for example blocking the lease of state land to those who do not have registered employees. We will not permit that.

dialogue. I think it is necessary to reduce the work of socio-economic councils to the regions and broaden the dialogue. As you know, there was a lot of dissatisfaction among trade unions with regard to the extended application of collective agreements. In the end, we adopted the German model, which is 50 plus 1 per cent of the branch of industry, which is very logical. Foreign employers immediately recognised the positive side of that decision. And for this and any other law the most important factor is predictability, for people to know on 1st January what will happen on 31st December.

► In which ways is the Ministry collaborating with other relevant agencies on the retraining of employees and preparing them for the demands of the market?

- The ministry carries out short-term measures to encourage employment through a variety of programmes in cooperation with the National Employment Service. Moreover, we cooperate with the Ministry of Education on the European project FRAME and attempt to predict what will be required on our market in five or ten years, and consequently adapt the curriculum of our higher and secondary education.

We have completely killed the third level of education and now we don’t have people for many jobs. Give me a hunred bakers and I will employ them, give me a thousand potters and I'll employ them, and not only in Serbia, but also in the Emirates and Russia. The UAE is seeking 10,000 workers from us with third level vocational education and we do not have them, and we have allowed every third graduate in Serbia to be a manager of some sort. These are people with no occupation and no address. The market is now seeking engineers of all specialities, IT professionals, pharmacists, but we don’t have enough of them.

If we predict well what we will need in the coming period, we will no longer have these problems.

Among the 14 laws to be adopted by year’s end is also the Law on Compensation for harm in the workplace, solutions for which we will discuss with employers

► In your opinion, how can the dialogue between employers and trade unions be strengthened?

- To date we’ve had hundreds of workers who were not represented in the socio economic council through their unions and that will no longer happen. The same is true for employers. When they really are representative, then we will be able to lead much better quality

► Which instruments will the Ministry use to reduce unemployment?

- A competition was recently announced for the jail in Subotica. They sought a general practitioner and no one responded. And do you know how many doctors are waiting for national service in Subotica? Dozens.

Perhaps in cases where the state funded someone's

24 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

education we should consider introducing a requirement that such students should spend a year, two or three working where there is a need for their knowledge, regardless of where they live.

You also have this kind of example: the labour inspectorate recently warned that employers complain that workers do not want to be registered because they are receiving unemployment benefits. These are workers whose occupations are scarce and employers have no choice but to agree to their terms. ► However,

unemployment in Serbia is still very high?

- Very high. However, in the last five months we can praise ourselves for having a continuous decline in the unemployment level. In July and August, which we did not expect, we have seen increasing registration of employees as a concrete result of the Labour Law, the government's incentive measures and the engagement of the labour inspectorate.

Howeverm even all those measures for retraining and the like, which I have already mentioned, cannot solve unemployment. It can only be solved by new investments and we are primarily fighting for them.

► What are your expectations regarding the effects

of the reform of the pension system and what further steps do you intend to take?

- Solutions in the area of pension reform have been completed. This will bring significant cost reductions – in 10 years we will save 5.35% of GDP on pensions, which are serious savings and no one will lose any rights. We have significantly reduced the number of privileged jobs, equalised the status of women and men, as is the case in all European countries, and with that we have left the mechanism whereby women have certain privileges based on each child. We also corrected the anomalies - in Serbia one in three workers take early retirement. That is not normal and we had to respond to that.

By the end of the year we will simplify the procedure of the Law on Foreigners, which will ease the engagement of foreign labour

Where do you see the role of your ministry in the comprehensive reform programme announced by the Government?

- By the end of the year we will enter into the procedure with some 14 laws, the most important of which for employers is the Law on Compensation for harm in the workplace, and there I will certainly seek their opinion. This area has not been regulated to date and it is extremely important for the normal operations of a company. ■ ►

Always fresh. Always close. Always MAXI. 2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 25

INTERVIEW

No Good Law Without Proper Implementation SRĐAN LAZOVIĆ Vice President of the Foreign Investors Council, Corporate and Regulatory Affairs Director for the CEFTA region and Bulgaria at British American Tobacco SEE d.o.o.

The harmonisation of legislation with EU regulations is often not accompanied by proper enforcement.

The reason for this is an insufficiently trained administration, a lack of supporting regulations or their non-compliance with adopted laws.

Therefore, progress evident in the legislative field is negated in practice

T

he level of satisfaction of foreign investors who are already in the country is the best recommendation for the arrival of new investors. All previous Serbian governments were aware of that, as witnessed by the increasing quality of dialogue between the government and the business community. However, progress has been modest when it comes to the practical implementation of recommendations to improve the business environment, says FIC Vice President Srđan Lazović.

open to cooperation and ready to listen to the views of foreign investors regarding the business climate in the country. However, when it comes to the implementation of things agreed upon, success has been moderate. Not necessarily because of a lack of will, but rather primarily because of a failure to consider in due time the complexity of the transition process.

Here is a specific example in practice of what moderate success means. In October 2013, regulations governing the labelling of non-alcoholic beverages were harmonised with the EU's rules and this regulation envisages, among other things, an 18-month transition period. However, the Ministry of Agriculture issued its opinion that the labels on the existing products must be changed within a deadline of seven days, while the transition period applies only to new products. This proved to be problematic, due to contractual obligations and significant costs. This kind of practice automatically brought into question the initial positive normative change in the

The FIC has advocated for years for the introduction of a transparent and sustainable system of public finances

► The

FIC exists a full 12 years. To what extent has the atmosphere changed throughout this period? Are the FIC's original recommendations still relevant today?

- All previous governments of the Republic of Serbia were

26 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

REFORMS

Systemic reforms in the areas of healthcare, pensions, education and public administration are the most important for the creation of functional and sustainable business framework.

PREDICTABILITY

REGULATIONS

Serbia has great potential in agriculture and the food processing industry, but the essential precondition for its use is a better structured and a predictable framework.

law itself, in terms of harmonisation with EU regulations.

As far as the relevance of the recommendations is concerned, we are fully aware that the harmonising of legislation with the regulations applicable in the EU is a long-term process, so their repeated appearance in several editions of the White Book is a result of our desire to help solve specific problems in the long run and, more importantly, in a sustainable way.

To what extent can we say today that the overall legal framework in Serbia is coherent, and supported by appropriate regulations?

- The creating of a legal framework that will be coherent, as well as supported by applicable regulations and in compliance with the EU Acquis, is one of five identified key priorities of the Council, and one of the basic preconditions for legal certainty in Serbia. There is currently a difference between the formal framework, which has largely been harmonised with the EU, and reality, in terms of the ways in which laws are enforced. The reason this occurs is that laws are sometimes vague, the public administration has a limited capacity to implement them, as well as bureaucracy and sudden regulatory changes. The judicial system is also too slow and cumbersome to cater to the needs of a modern economy. ►

The government should make efforts to improve the transparency of regulations, strengthen institutional capacities and reduce the administrative burden, in order to provide effective protection for investors.

issue is also the increasing of predictability, by which we imply the implementation of laws that have been adopted and the monitoring of their implementation. Furthermore, it is necessary to continue to reduce red tape in order for the state administration to be more efficient and accountable. The Council advocates for the economic integration of Serbia with the European Union, because that brings predictability and transparency in the business environment and raises the competitiveness of the Serbian market. ► How do you rate the government's intention to reform pu-

blic finances, the pension system and education; do you see concrete progress and, if so, where?

- Addressing key issues of Serbia's public finances, such as managing a growing budget deficit and public debt, are crucial to ensuring the country's macroeconomic stability. Tax policy should be transparent, without the introduction of para-fiscal levies in certain areas. When we talk about reforms and the implementation of systemic reforms in the areas of healthcare, pensions, education and public administration, these certainly represent the most complex and most important steps in creating a functional and sustainable business framework.

We expect greater appreciation of our recommendations, because the FIC plays an important role in generating Serbia's GDP

► Which

segments of harmonisation with the EU would you specifically point out to the government on the eve of opening negotiations on the chapters?

- We believe the goal should primarily be the creation of a lasting, sustainable and transparent framework – to adopt and implement regulations that comply with the EU Acquis. Closely related to this

In your opinion, will the new bankruptcy law provide greater protection to creditors and enable acceleration of the process of bankruptcy for companies that have been unable to service payments for a long time?

- The FIC conducted comprehensive analysis of the Law on Bankruptcy after its adoption by the Assembly and we plan to present those results in the latest edition of the White ►

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 27

Book this autumn. At this point I can convey that the latest amendments to the Law on Bankruptcy adopted in August of this year introduced numerous positive changes. Namely, the proposed amendments seem to contribute to the transparency and efficiency of bankruptcy proceedings, and we express hope that a significant amount of problems observed in practice should hopefully be resolved by the adoption of the latest amendments of the Law. However, the actual effects of the amendments could only be evaluated after a certain period of their implementation in practice.

Can you give us some FIC comments regarding the new Law on Foreign Currency Operations?

- The position of the Council is that it is necessary to make amendments in order to avoid different interpretations of existing rules on foreign currency operations, all with the aim of further liberalisation of financial instruments and regulations on foreign exchange transactions. In this regard, the Council considers it necessary to secure the implementation of the following recommendations, which are not included in the proposed amendments to the law: enable the issuing of guarantees on non-resident accounts in transactions between two non-residents in all non-credit transactions; bylaws and practices of the National Bank of Serbia regarding subordinated loans also need to be changed and the providing of subordinated loans should be considered as a direct investment, as is regulated by the Law on Foreign Currency Operations, etc.

These are just some of the specific recommendations we have given to the competent institutions through official channels. ►

► How do you assess progress in agricul-

tion has once again emerged. The remaining problems in the agri-food industry include full lack of transparency in the implementation of border inspection procedures, in terms of cost, timeframes and mechanisms, including sampling and laboratory analysis. The quality standards of milk are not ensured and the National Reference Laboratory is still not operating.

It is essential to establish a transparent policy of subsidies to support long-term agricultural development, furthermore the registration of products for plant protection has not yet been agreed with the European Union and does not guarantee food safety. We have inconsistent application of the rules relating to livestock and so on. ► Can

we say that the level of acceptance of the recommendations and advice given by FIC members, along with their experience, is proportional to their share in the Serbian GDP? - We think there is progress, but we certainly expect a significantly higher percentage of our recommendations to be accepted because, as you noticed nicely, the Council has an important role in generating the GDP of Serbia. It is also an indisputable fact that the Council continues to strengthen, thanks to continued growth and an influx of new members, currently bringing together 130 companies that have invested a combined total of more than $20 billion, accounting for 17.5% of GDP, and its member companies are among the country’s biggest taxpayers and exporters, directly employing over 95,000 people in Serbia.

The main objective of the Council is to use specific recommendations articulated in the White Book to draw attention to areas that need to be advanced with the aim of further improving the investment climate in Serbia.

A satisfied foreign investor is the best recommendation for the arrival of new foreign investors

ture and the food industry, where there was little progress in previous years?

- Serbia has great potential in agriculture and the food processing industry, but a key prerequisite for the utilization of this potential is a better structured and predictable framework. There are two contradictory elements within the food industry and agriculture in Serbia. On the one hand, important laws, such as the Food Safety Law, are to a large extent harmonised with EU regulations. However, in practice, many important legal decisions do not apply. For example, the functioning of the reference laboratory was regulated back in 2009, but it still isn’t functioning. In addition, sometimes the bylaws are in direct conflict with the positions written in the law itself. For example, the Regulation on labelling contradicted the Law on Food Safety for four years, until it was changed last year.

Some positive changes have been noticed in the past eight months, such as harmonisation of the regulations on labelling with European Union rules, but the problem of implementa-

► You

just mentioned the White Book. To what extent is the White Book required reading for investors who are just arriving in Serbia?

- The White Book is a unique brand in its own right and the key publication of the Council, which provides a picture of the business climate in Serbia and offers tangible suggestions for improving the business environment. The purpose of the White Book is to serve as a platform for an active dialogue between the Council and the Government, and we believe that it serves this purpose. Moreover, key players in Serbia and beyond recognise the White Book as a sort of manual or set of recommendations for creating simpler and better conditions for doing business. Not infrequently, especially in recent times, we have witnessed our publication being quoted in public and we have seen it cited by government officials and ambassadors of foreign countries. ■

28 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 29

INTERVIEW

We’re Aware of the Challenges JORGOVANKA TABAKOVIĆ Governor of the National Bank of Serbia

It is correct that there are challenges in the fiscal sphere, but the National Bank of Serbia believes in the decisiveness of the Government to deal with them, which would contribute to reducing internal and external imbalances, and thereby also lasting stability of the foreign exchange market

J

orgovanka Tabaković, Governor of the National Bank of Serbia, believes the government will be committed in the implementation of fiscal consolidation and structural reforms and that these efforts will result in the concluding of a precautionary arrangement with the International Monetary Fund. The NBS is ready to contribute to creating conditions for improving the market environment through the ensuring of the stability of prices and the financial system.

How would you assess the macroeconomic situation in Serbia and the probability of entering into a precautionary arrangement with the IMF this year?

- The year-on-year inflation rate in June totalled 1.3 per cent, with which it reached a new historic, 50-year low.

Inflationary pressures have been very low in the last year and a half, which is a result of monetary policy measures that also contribute to the stability of the exchange rate and inflation expectations, as well as the result of low aggregate demand and falling prices of primary agricultural products. We expect that in the second half of the year inflation

►

will return within the limits of the target, or four plus/minus 1.5 per cent.

On the other hand, following the floods that primarily impacted on energy, mining and agriculture, the growth prospects for GDP have deteriorated. Flood damage will almost certainly have a negative impact on the budget, which will demand additional fiscal policy efforts in the coming period in order to ensure the sustainability of public finances, while to a certain extent the trade balance will also worsen, due to the expected higher imports of energy, as well as materials and equipment for repairing damage.

ment will be signed that will be an additional guarantee to investors that Serbia is leading a responsible and sustainable economic policy.

Where do you see the NBS’s role in supporting the government’s implementation of comprehensive reforms?

- The Government and the NBS have a shared task of ensuring policies enable the advancement of the business environment in the country and, as a consequence, higher economic growth and employment. An essential condition for conducting reforms is macroeconomic stability, and in order to achieve that it is necessary for the Government to ensure the stability and sustainability of public finances, while for its part the NBS ensures the stability of prices and the financial system.

►

The course represents one of the most important factors influencing price and overall financial stability

How much room is there for the NBS to maintain low inflation and the stable value of the dinar in the face of challenges coming from the fiscal sector?

- It is correct that there are challenges in the fiscal sphere, but the NBS believes in the decisiveness of the Government to deal with them, which would contribute to reducing internal and external imbalances, and thereby also la►

We estimate, however, that the effects of the flooding are one-off and limited, and that the outlook for 2015 is more favourable, primarily due to the expected increase in investments to repair the damage.

We expect that the new round of negotiations with the IMF will follow in the autumn and that afterwards a precautionary arrange-

30 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

RESPONSIBLE

REFORMS

LAWS

A precautionary arrangement with the IMF would be an additional guarantee to investors that Serbia is leading a responsible and sustainable economic policy.

Lasting results in resolving the issue of non-performing loans are not possible without stronger economic recovery and structural reforms.

The legal framework must no longer be a limiting factor in the development of innovations on the payment services market.

sting stability of the foreign exchange market.

As you know, Serbia’s regime of managing-fluctuating the exchange rate and the NBS does not have the aim of maintaining the exchange rate of the dinar towards the euro at a predetermined level. However, the fact is that – as in other small, exposed economies – The course represents one of the most important factors influencing price and overall financial stability.

In addition to that, given the degree of Euroization of the domestic economy, movements in the exchange rate are also important from the standpoint of financial stability, the maintenance of which represents the second task of the National Bank. If the NBS allowed the foreign exchange market, which is very shallow

and has low traffic, to fluctuate as a result of short-term external shocks, we would be irresponsible with regard to the population and the economy.

issues that have accumulated over the years, and the same also applies to the issue of non-performing loans (NPL).

In the previous period the NBS brought a number of regulatory changes in an effort to solve this problem, which were aimed at relaxing provisions relating to the transfer of receivables sought from banks by other legal entities, in order to allow banks to thereby clean their portfolios, and the NBS is still working actively on finding additional regulatory solutions to this problem.

One of the possible measures for resolving the problem of NPLs is also the creation of a separate company in the form of an investment fund that that would buy up troubled loans from banks. This would allow

The measures that the Government intends to implement are essential and urgent because the environment that citizens and businesses should live and do business in depends on them Which solutions from the domain of the NBS are being considered when it comes to non-performing loans?

- There are no quick fixes in the resolving of

►

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2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 31 facebook.com\Hypoalpeadriasrbija

banks to use the sale of troubled receivables to other entities in order to relieve their balance sheets and utilise the resulting funds for new lending to support healthy projects.

However, the lasting results in solving the problem of NPLs are not possible without a stronger economic recovery and structural reforms, while central banks can provide their biggest contribution by supporting macroeconomic stability, in which the NBS has visible results. ► At the beginning of this year you announ-

ced interest in a strategic investment and a number of investors interested in individual banks in Serbia. What could realistically be achieved from these investments by the end of this year?

- In mid-August the Executive Board of the National Bank of Serbia gavepreliminary approval to the establishing of a bank to be part of the international conglomerate known as the Royal Group, which has its headquarters and founder in Abu Dhabi (UAE). The bank will operate under the name "Mirabank, joint stock company, Beograd". With this, the first stage in the establishment of this bank has been completed. It is the first greenfield investment in the banking sector in Serbia since 2008.

The next stage is the licensing of the bank.

The NBS, in accordance with its responsibilities and on the basis of the submitted applications of potential investors for the acquisition of direct ownership that would enable more than 50 per cent of the voting rights of Čačanska Bank, passed an appropriate act that has been forwarded to the Deposit Insurance Agency, which is in charge of the process of leading and finalising the sale of this bank.

Individual companies from China and Turkey have also expressed interest in investing in the financial sector in Serbia, but to date they have not submitted official requests.

protection for the users of insurance services.

The NBS, as the proponent of this law, sought to use the introduction of a number of novelties to increase the quality of dealing with insurance and enable the further harmonisation of insurance services with the standards of developed market economies and with the EU acquis in the field of insurance.

The draft law on payment services will, for the first time and in a comprehensive and detailed manner, bring order to the payment services market in our country.

Its adoption will improve the business environment by creating legal requirements

ple we followed is ensuring the safety and reliability of payment transactions.

The NBS has also prepared a Draft law on amendments and additions to the Foreign Exchange Act with the aim of complying with the provisions of the new Law on Payment Services, as well as in order to eliminate confusion in the application of certain provisions of the applicable Law on Foreign Exchange Operations.

► What does the NBS intend to do in its do-

main in terms of promoting e-commerce?

- One of the main goals of the new law on payment services is to promote e-commerce, and to do so primarily through the legal introduction of institutes of electronic money and enabling electronic money payments in dinars and foreign currency, both in the country and abroad, as well as creating a legal framework for the establishment and operations of domestic institutions for electronic money.

We expect them to be a more favourable alternative than banks when it comes to the cost of companies wanting to sell their products and services online to customers in the country or to engage in the global internet trading system.

We estimate that the outlook for 2015 is more favourable, primarily due to the expected increase in investments to repair the flood damage

The NBS has prepared a draft law on insurance, payment services and amendment and additions to the Foreign Exchange Act. What will these laws mean in terms of regulating the economic environment?

- The draft law on insurance should establish a regulatory framework that will enable the further development and improvement of the insurance business and a higher level of ►

In which areas should the Law on the Protection of Financial Services improve this domain?

- The basic goals of this law are for it to be harmonised with the new law on payment services, improving the ways of realising the rights and interests of users of financial services, additionally protecting those users, as well as resolving specific practical problems and dilemmas that arise in its implementation. ►

for new, contemporary forms of payment, as well as for the establishing of institutions that have not previously existed on the market – institutions for electronic money and payment institutions.

There are three basic principles that we were led by during its compilation. First is that the legal framework must no longer be a limiting factor in the development of innovations on the payment services market. Second, we want to secure conditions for the shortest possible deadline for the execution of payment transactions, alongside the highest possible share of electronic payments. The third princi-

32 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

In your opinion, how much will the measures taken by the Government and the NBS impact on the creation of a more equitable business environment for all participants?

- This government is determined to implement essential reforms, and to remove obstacles hindering the establishment of a favourable business environment. Those measures are not always the easiest to apply but, as they have been delayed for years, they are now essential and urgent because the environment that citizens and businesses should live and do business in depends on them. ■ ►

INTERVIEW

Fiscal Consolidation is More Important than Ever TONY VERHEIJEN World Bank Country Manager for Serbia

Gradual fiscal consolidation rarely delivers the needed effect, and this is a lesson we hope the government will take to heart as it takes critical decisions in the coming months

T

he floods that occurred at the time when se manner because, other than notional outlines, the government was just being formed, we do not currently know the government’s exact took the prime minister and his cabinet a reform course. The indications given by Minister lot of time, first on the immediate post-floVujović in the interview he gave to Bloomberg on od efforts, and then on the Recovery Needs Asse14th July are of a gradual approach to fiscal conssment, at the time when implementation of the solidation, and the problem of the companies in fiscal consolidation measures the process of restructuring. are urgently needed. However, Whether this is a consequenWe believe that the Labour Law fiscal consolidation is probably ce of the floods, and an effort changes are a step in the right even more important than beto cushion the double blow to fore, in order to free up fiscal direction that hopefully will pay off in Serbia’s citizens, or the reflespace to support the flood recoction of an approach that was an improved investment climate very efforts, says Tony Verheipresent all along, is hard to jen, World Bank Country Manaestablish without a counterfager for Serbia. ctual. Unfortunately, the experience of other middle income countries globally shows that gradual fiscal consolidation rarely delivers the needed ► You've warned the Serbian government that effect, and this is a lesson we hope the governthe flood relief issue should not distract them ment will take to heart as it takes critical decisifrom the reform course. Was your advice heeded? ons in the coming months.

- It is difficult to answer your question in a preci34 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

BUDGET

PREDICTABILITY

DETERMINATION

Preparation of the 2015 budget and the 2015-2017 fiscal strategy will become a pivotal process that will determine whether Serbia can meet its targeted deficit stabilisation and reduction objectives.

A lot remains to be done, especially regarding the consistent and predictable implementation of laws and regulations, the creation of a level playing field and ending unfair advantages enjoyed by SOEs.

The new Law on privatisation itself will not change things much if there is no determined implementation and a strong political commitment to finally resolve the companies in restructuring.

whether Serbia can meet its targeted deficit stabilization and ► The Government has announced a revised budget for reduction objectives. this autumn, to be followed by negotiations with the IMF. Is the timing and sequence of steps right to ensure macroeconomic stability in the coming period? ► Economy Minister has announced that the privatisati- The supplemental budget comes very late in the year, whion of state-owned and socially-owned companies will be ch means that whatever measures are included will carry an completed by December 2016. Do you think this is a new effect mostly for the 4th quarter. delay tactic or a realistic plan? this a step towards levelling Considering the pattern we’ve We are concerned that several new Is the playing field? witnessed since the beginning of projects that were approved by the - We haven’t seen the full plan the year (of an expanding fiscal deficit), it will be hard for the Bank in the last 18 months have yet for resolving the 161 enterprises in restructuring, nor for the government to remain even wito see the start of implementation other remaining enterprises in thin the not very ambitious defithe portfolio of the Privatisaticit target originally set for 2014. on Agency. We expressed some concerns over the approach This means that basically Serbia will have lost another year that Minister Vujović outlined at the FIC Forum in june, as that it will need to make up for in the 2015-2017 period if to us it raises the risk of strong political pressures on behalf macro-fiscal fundamentals are to improve. In this respect, of the (mostly defunct) SOEs, further delaying the process. the preparation of the 2015 budget and the 2015-2017 fiscal We have provided comments to this effect and the Mistrategy will become a pivotal process that will determine

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 35

nistry of Economy is considering these… The adoption of the new Privatisation Law could be a good opportunity to regain momentum that was lost over the previous 18 months. However, a new law itself will not change things much if there is no determined implementation and a strong political commitment to finally resolve these companies.

► You've said that "the core of the state administration - health, education and social welfare - is too large." Do you see reform progress in these areas?

- We have been working closely with the team established by Deputy Prime Minister Udovički to find ways of achieving some early fiscal gains from the public administration reform process, while at the same time focusing on improving system performance. It is clear that expenditure on wages and salaries in the Serbian public sector is large, that performance in service delivery is poor, and that expenditure on wages has increased rather than declined during the last five years, contrary to the trend across EU member states.

I believe the phased approach being developed by the Government is credible and the only realistic way forward, as it combines some upfront savings with a clear process of fundamental revision of public sector employment numbers, while focusing on the quality and performance of the system along with its cost.

of implementation. This is damaging, in particular for the Deposit Insurance Agency (DIA) support project, which was meant to rapidly provide resources to the government, but was approved only in August, and the Road Rehabilitation project, which took 16 months to be ratified. Frequent changes in the government and the need for cumbersome re-approval processes are mostly to blame for this… The most serious problem we are facing remains the Bor Regional Development Project, where the Government signed a contract for the construction of the Veliki Krivelj collector (which is critical to prevent a serious environmental incident in the Bor area) in January 2013, but for reasons unclear to us no works have started so far.

► Has the environment for doing business in Serbia improved?

- Judging from the tone of the FIC It is clear that expenditure president’s address to the FIC on wages and salaries in the conference in june, a lot remains to be done, especially regarding Serbian public sector is large consistent and predictable and that performance in service the implementation of laws and redelivery is poor gulations, the creation of a level playing field and ending unfair advantages enjoyed by SOEs. There are some positive developments – for example, we believe that the Labour Law changes are a step in the right direction that hopefully will pay off in an improved investment climate. Resolving the SOEs in restructuring and the remaining SOEs in the portfolio of the Pri► Is this government faster than vatisation Agency should also the previous administration help, along with the continuing when it comes to withdrawing process of tax administration credits from the World Bank? reform. We also note the efforts - We have seen improvements in to harmonise and streamline inproject implementation over the spections, initiated by Deputy last 12 months, in particular on Prime Minister Udovicki. The Corridor X, which is our largest government undertook a number of moves in investment in Serbia. We have also successfully the right direction, but achieving a real effect closed the Irrigation and Drainage project, on the economy will require adopting a coorwhich achieved most of its objectives, as well dinated approach to accelerating reforms that as the Energy Efficiency project, which also has so far been lagging or implemented in piehad good results. However, we are concerned cemeal manner, and establishing clear accounthat several new projects that were approved tability for delivering results. ■ in the last 18 months have yet to see the start

36 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 37

INTERVIEW

Better Legislation, More Investors MIKE FALKE Head of GIZ Legal and Judicial Reform Programme in Serbia

Even though GIZ and the FIC have very different mandates, both share similar goals and aspire to increase transparency and the efficiency of, and stakeholder participation in, the law making process

O

nly a sound and predictable legal and institutional framework will provide the right environment to attract foreign investments: investments which are greatly needed in Serbia. It is crucial that investors claim that from the Serbian authorities, but also help them define that system. The Legal and Judicial Reform Programme of GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH), has contributed intensively to improving the legislative process in Serbia, says Mike Falke, Head of GIZ Legal and Judicial Reform Programme in Serbia. ► What major achievements in terms of the business environment’s legal predictability has the Serbian Government made in the previous year with the help of GIZ, and what are the most urgent tasks in the period ahead?

- The Legal and Judicial Reform Programme of GIZ has contributed intensively to improving the legislative process in Serbia. For example, public consultations are now mandatory for every new law – even though many laws have been adopted recently under urgent procedures without sufficient stakeholder participation. A great number of civil servants took

part in specific training programmes, focusing on major elements and skills of law drafting.

But even if you have good laws, they might not always be implemented by the public administration or judiciary.

One of the reasons for that is simply a lack of knowledge and skills. This programme helps in overcoming the so-called implementation gap. Furthermore, the introduction of “private” Enforcement Agents and Public Notaries has already increased predictability in those areas today.

Our focus in the upcoming period will be on the negotiations of chapters 23 and 24 of the acquis communautaire, building the capacities of the Serbian public administration, strengthening and consolidating already initiated reforms and ensuring efficiency in the work of newly established legal professions, such as public notaries, enforcement agents and insolvency administrators.

Urgent procedures without public hearings should be the absolute exception. Unfortunately, that has not been the case in the last few months

38 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

► Which aspects of regulatory reform do GIZ and the Foreign Investors Council cooperate on the most?

- Even though our Programme and the FIC have very different mandates, both share similar goals and aspire to increase transparency and the efficiency of, and stakeholder participation in, the law making process. The insight of the FIC and its members, especially when it comes to specific and practical questions, means it is again important for us to engage in reform policy. I would consider this symbiosis as the basis of our cooperation.

What are your main messages to the Serbian Government when it comes to the quality of public debate on legislation and incorporating suggestions into the final texts of laws?

- It is very important that all respective stakeholders are involved and informed in the very early stages of the legislative process.

Urgent procedures without public hearings should be the absolute exception. Unfortunately, that has not been the case in the last few months. Inputs, concerns and proposals from stakeholders should be evaluated and processed in a transparent manner. The reasoning for provisions in the final text should be comprehensible and documented. The intensity, and also the technical solutions to support public consultations, should be adjusted to the specific type of legislation. Where there is great interest from a wider audience, more accessible public consultation should be offered. Finally, competences and insights of professional associations, such as the FIC, should be used to increase the efficiency and quality of law making.

Our programme came out with these and other recommendations in June 2012, when we published a comprehensive Survey on the Improvement of the Legislative Process in the Republic of Serbia. The Survey can be accessed via our web page www.legalreform.rs (www.pravnareforma.rs).

►

mentation of laws. Unfortunately, this practice has still not improved sufficiently.

► What does the introduction of the institution of public notaries mean for overall progress on judicial system reform and will it bring shorter procedures to business dealings?

- Just a few days ago we have witnessed the establishment of the Serbian Chamber of Notaries. Public notaries are judicial professionals who will certainly contribute to increasing the predictability of the Serbian legal system. That will be also important for foreign investors: notarial certified business transactions will make risk calculation easier.

One of the expected advantages of public notaries is that the judiciary will be unburdened of tasks that public notaries will take over. That will increase the efficiency of the work of courts. On the other hand, public notaries’ deeds present enforcement certificates, thereby enabling direct enforcement without requiring civil proceedings for its enforcement.

► GIZ is also helping the government raise the quality of private enforcement agents and bankruptcy trustees, as well as the training of judges who deal with bankruptcy proceedings. How would you assess progress to date in this area?

- We have been providing a lot of capacity development training for Serbian insolvency administrators and judges dealing with insolvency matters. One could say that the system of insolvency administrators is functioning rather well, based on a modern insolvency law.

The reform of the system of enforcing civil claims in Serbia is also something that our programme has been dedicated to for many years.

From September 2013 GIZ was also entrusted with the implementation of the Rule of Law and Enforcement Project, funded by the EU under IPA 2012. Through the valuable support of our partner, the EU Delegation to Serbia, we will continue supporting the development of an efficient, reliable enforcement system. The enforcement of civil claims in Serbia is crucial not only for a sustainable Serbian economy and improved quality of public services provided to citizens, but also because it will be an important guarantee for investors who can engage a legal professional, i.e. enforcement agent, to enforce their dues or, vice versa, an enforcement agent to enforce the rights of employees, for example. In that respect, our programme will work intensively on the improvement of legislation, i.e. the drafting of new provisions of the Law on Enforcement and Security. ■

Public notaries are judicial officials who will be important for foreign investors: notarial certified business transactions will make risk calculation easier

► How would you rate activities undertaken by the new government in terms of adopting appropriate bylaws that were previously either missing or not coherent with the spirit of the laws, thereby hindering the enforcement of those laws?

- It is recognised as a negative practice in Serbia to have a law prepared, drafted and adopted while the adoption of relevant bylaws legs behind, sometimes for several years. We strongly recommend simultaneous preparation of bylaws and laws (pre-draft), which would overcome many inconsistencies and later enable the feasible imple-

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 39

INTERVIEW

Too Long Waiting for Permits Makes Investment Pointless DEJAN JEREMIĆ Executive Vice President of Operations at Delta Holding

The business world’s expectations of the public administration are not great and are very simple - it has to be as effective and cheap as possible, and enable all investors to operate under the same conditions

D

elta will almost certainly be the leading investor in the Serbian economy again this year, despite the lack of government measures to increase economic activity and the complicated administrative procedures that this company, like many other investors in Serbia, faces every day. ► How important is macroeconomic stability to the planning of Delta Holding, and in that context how would you evaluate the overall economic environment?

- Without stable parameters there is no planning in business. In that sense, a stable exchange rate for the dinar is that which is being sought by a large part of the economy.

However, there are other things in our environment that are not conducive to the development of business and many of them are not issues of major investments or European integration, but rather only good will and an honest desire for the conditions for

doing business to change. Just look at the treatment that business people receive, and that certainly isn’t stimulating for investment. Changing the climate in public does not cost anything, and contributes significantly to the development of business. An investor is an investor and the rules should be the same for all. ► The

Government of Serbia has vowed to improve the business environment and make it more attractive for companies. Where do you see progress, and in which areas do obstacles to doing business remain high?

- Progress can be seen in the level of cooperation of public administrations and local governments with investors. Likewise, the new Labour Law is stimulating for employers, including for the hiring of new workers.

However, bureaucracy still makes it difficult to surmount obstacles to investment, while a special problem is the inadequate credit policy. It is led as though the Serbian economy is "overheated" and should be slowed, while the reality is actually the opposite: economic activity is almost nonexistent and launching the economy, especially manufacturing, is practically the first and most important economic measure required for the recovery of Serbia.

An investor is an investor and the rules should be the same for all

40 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

As a major real estate investor, what do you see as the main problems in this area?

- The problems in the real estate sector have been the same for years, and that explains the fact that the real estate sector, and along with it the construction industry, have virtually frozen. When it comes to obsacles, in the first place is complicated bureaucracy, with enormous discretion on the part of the state and local governments. The efficiency of issuing the necessary permits is often such that some projects are rendered senseless. It is unacceptable to wait years for permits for projects whose value is not only in the hundreds of millions of euros, but which will also create thousands of jobs, such as, for example, the case with our Delta Planet shopping centre.

Of course, if we're talking about recent graduates, it is clear that their education does not include enough practical experience and that they only learn the real job by joining a company or some other institution. Primarily, closer cooperation between educational institutions and the economy would be beneficial for all, because it is true that universities educate the youth, but it is the economy that has to employ them in the end.

►

► With its approach to the EU, Serbia will have to improve the competitiveness of the food production and processing sector. What are the most important elements in terms of establishing an institutional framework to ensure that?

- I am afraid that we have not taken this issue seriously enough and began addressing it on time. We say that agriculture and food production are our opportunity and our strategic branch for development, but we do for it to actually become that. Such as it is today, agriculture is in a far worse state than industry.

The first strategic prerequisite for raising competitiveness is increasing the area of irrigated land. Serbia is, to our misfortune, ranked as the last country in Europe in terms of area of irrigated land and without irrigation yield per unit area cannot be increased.

The second element we need to improve are subsidies. If we know that 40% of the EU budget goes to agricultural subsidies, then the question is how our manufacturers can compete with European ones? We cannot expect to solve the issue of subsidies overnight, but we can create conditions to reach production conditions enjoyed by other countries in the region in three to five years.

The provisions on the conversion of the usage rights in property over land are in themsevles opposed... It’s been a long time since legislative solutions have caused as much damage, not only to the economy, but also the whole of Serbia

In your opinion, how easy is it for companies to find skilled workers and what are your recommendations for improving the education system?

- I believe that good companies, with a clear business strategy and human resources policy, can still find high quality workers in Serbia.

►

As a businessman, what are your expectations of the public administration reforms?

- The expectations of the business world when it comes to public administration are not great and are very simple. Public administration should be as efficient and cheap as possible, and should be dimensioned such that the economy can finance it, and that the economy and citizens can realsie their needs through it. I will leave all other details of public administration reform to the experts in that field. ►

If you had a day to decide which legal provisions should be subjected to the regulatory guillotine, what would your priorities be?

- The provisions on the conversion of the usage rights in property over land are in themsevles opposed. The State and budgets have not brought any benefit, and have completely halted several branches of business. It’s been a long time since legislative solutions have caused as much damage, not only to the economy, but also the whole of Serbia.

This year Delta Holding is expecting better results compared to the previous year. What are the factors contributing to that?

- This year we expect results similar to those we had in 2013. Given the state of the Serbian economy and citizens’ living standards, and even the natural disasters that hit our country, we consider that would be a very good result. We are particularly pleased to be continuing the cycle of investment, and that also means the creation of new jobs. We are currently building a cold storage facility on a farm in the Podunavlje region, a logistics centre for the Delta transport system in Stara Pazova, and at the end of the year we expect to start investments in the real estate sector, so this year Delta will almost certainly defend its position as the biggest investors in our economy.

We believe that 2015 will be marked by the growth of the Serbian economy, so our plans will be even more ambitious. ■

►

SUBSIDIES In order for Serbian agriculture to be competitive, we would have to harmonise our conditions for production with those of other countries in the region in the next three to five years.

►

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 41

INTERVIEW

Accountable to Nature and Self VUJADIN ŠĆEKIĆ

general director of Jugo-Impex

Jugo-Impex continually invests in equipment and innovation, which allows it to hold a sovereign position as the leading company in the management of hazardous and non-hazardous waste

E

U membership is one of Serbia’s national objectives and this process includes harmonisation with Chapter 27, relating to the environment, which is one of the most difficult and demanding chapters, especially since it requires investment in the amount of ten billion euros in the next decade. Jugo-Impex, a leading company in the field of managing hazardous and non-hazardous waste, sees an opportunity for continued growth in this area, says company director Vujadin Šćekić. ► What

markets for this product?

- We now expect the launch of the Župa chemical industry, where our product will be the base raw material for products copper salts of the finest quality and thereby facilitate the company’s sales on the European market. In the meantime, we have registered our copper product according to the EU’s REACH regulation.

In that way we also became a supplier of a large manufacturer in England, for which we created a product defined according to their standards and reactor furnaces for the production of salt.

at this point in the whole world and is unique in Southeast Europe. Unfortunately, here awareness of the importance of these types of hazardous waste is low, but our goal is to raise it and quickly approach neighbouring countries that are several steps ahead of us and then other European countries, which are considered far more advanced in this sense.

Here awareness of the importance of these types of hazardous waste is still at a low level, but our goal is to raise it

kind of potential for development does the recycling industry in Serbia have and where do you see room for your company in this sector?

- The national strategy and corresponding EU regulations stipulate that it is necessary to collect 4kg of electronic waste per capita per year, and that figure should be reached by 2018 at the latest. Today's result is at a level of 1.5 kg per capita, which clearly indicates that there is huge potential for the development of this industry.

Jugo-Impex EER is the leading company in the management of hazardous and non-hazardous waste, with an over 50% market share in electronic waste. In 2013 it processed 10,000 tonnes of hazardous waste and this figure is expected to increase every year. Jugo-Impex directly and indirectly employs a large number of people – over 2,500, thanks to which this work has a secure existence

In June the European Society for Quality Research (ESQR), an organisation based in Geneva, presented you and another company from Serbia with the award for best practice and quality of work. How important are innovation and the introduction of best practices for the competitiveness of local companies that wish to do business on the global market?

- Innovations are probably one of the most important elements for the competitiveness of domestic enterprises on the global market.

Systems that can be taken and copied from Europe, from ordered companies, cannot be implemented fully in our country. You must always be creative and adjust all processes in the company towards your aim. The award we've received brings us great satisfaction and recognition that we are not making mistakes in the processes we use and that gives us strength to go on. It is also confirmation that our work in the field of environmental protection is recognised at the European level. ■ ►

Your recycling plant for electronic and electrical waste is the only one of its kind and the largest in the Balkans. How much is the importance of recycling this type of waste recognised in the region?

- We have a facility that combines the recycling of cooling appliances and other electronic waste in a way that is presented in this industry by BAT (best available technology)

►

In 2009 you successfully developed the expanded copper granule, a product with a wide range of applications in the chemical industry. Where are your most important ►

42 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

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FOREIGN INVESTORS COUNCIL

True to its Mission

The Foreign Investors Council (FIC) was founded in 2002 with a mission to “actively promote sustainable business environment through open dialogue with the authorities and other relevant stakeholders”, which it has been continuously fostered and documented in the annual White Book

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he Foreign Investors Council (FIC) is an independent platform which, through a dialogue with the authorities and the provision of concrete reform proposals, improves the business climate in Serbia. FIC promotes the principles of sound business ethics and modern corporate governance, both within the organization itself and in the wider environment.

The Council was founded with the help of the Organization for Economic Cooperation and Development (OECD) - the Investment Compact for SEE. According to the latest data, the number of FIC members grew from its original 14 founding members to 130 companies, which generated 17.5% of Serbia’s

GDP in 2012 and have invested over €20 billion, creating over 95,000 new jobs. The latest data will be published in the 2014 White Book.

Most FIC members hail from the European Union, with the remainder coming from other countries - ranging from the U.S. and the Russian Federation, to the People's Republic of China.

FIC members also include domestic companies with majority foreign ownership. National consultancies and companies representing foreign interests can also join, regardless of their form of establishment.

FIC formulates its position through an active debate between its members and promotes only those

Recently adopted amendments to the Labour Law included 65% of the recommendations presented in last year's White Book

44 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

reforms which benefit the wider business community and not just certain companies or business groups.

The Council advocates a stable and predictable business environment and a level playing field for everybody, as well as believing that the European integration process can aid these goals. It supports systemic reforms which have the main goal of building an efficient public sector and state ownership, which would secure long-term macroeconomic stability. On the micro-level, FIC strongly advocates better and more consistent implementation of laws and the reducing of unnecessary administrative burdens.

GOALS FIC's goals are as follows: improving the business development climate in Serbia, representing and promoting the shared opinions of its members in order to advance mutual interests and stimulate foreign direct investments, improving permanent dialogue with the Serbian administration and advancing the interests of the international business community in Serbia.

FIC is an active participant in the process of driving reforms and economic development, as well as being one of the crucial stakeholders and reliable partners of the Serbian government and international organizations.

business in three specific areas: "Pillars of Development" – comprising the infrastructure, labour, real estate & construction sectors, where reforms could lead to multiple positive effects on the business environment.

Legal framework – consisting of a critical review of company law, competition and consumer protection, commerce, tax policy, etc.

Specifically related to individual sectors – presenting the legal framework for each individual industry.

Regulatory issues are presented in separate chapters with a unique fourfold structure, namely: current situation, improvements, outstanding problems and the Council’s recommendations. They are accompanied by an easy-to-understand review of the progress made in the implementation of the recommendations stated in the White Book.

The White Book defines a joint platform for representation of the association and a constructive tool for dialogue with the government and other stakeholders in promoting the FIC agenda.

FIC strongly advocates better and more consistent implementation of legislation and the reducing of unnecessary administrative burdens

WHITE BOOK The White Book is the crowning achievement of the consultation processes that is published each year and through which FIC members compile a comprehensive review of the business climate in Serbia and provide recommendations for its further improvement.

The White Book contains a review of tangible and applicable solutions for overcoming administrative hurdles, which are publicly presented each year and are the subject of an open dialogue between FIC members and the government, in the presence of esteemed public figures, representatives of the business community and civil society.

The White Book offers a set of economic policy priorities, as identified by the foreign investors, but additionally reveals suggestions for the ease of doing

ACTIVITIES The FIC enables structured communication between its members, with the aim of formulating common positions and proposals which are actively presented to important stakeholders. FIC insists on dialogue between high officials and experts, with the goal of achieving greater and more efficient progress in improving the business climate in Serbia.

Six months after the public presentation of the White Book, the Council has a regular annual conference entitled “Reality Check”, which took place for the fourth consecutive time this year. The conference sees Serbian Government officials and FIC members discuss key issues relating to further advancement of the business environment in Serbia and the progress achieved since the White Book’s release.

Other regular FIC activities can be divided into three segments: The first relates to analyzing existing regulation and its implementation. For instance, recently adopted amendments to the Labour Law included 65% of the

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 45

recommendations presented in last year's White Book.

The second pertains to active participation in preparing new laws and launching individual advocacy initiatives. Since the publishing of the 2013 White Book, a total of 13 draft laws have been analyzed and 22 individual advocacy initiatives have been forwarded to various ministries.

The third segment relates to systemic and regular communication with all important stakeholders, through roundtable discussions, presentations and participation in relevant initiatives and forums.

In line with its mission, the FIC operates through relevant sector-based and cross functional committees, reserved only for FIC members, spelling out specific positions on respective areas of expertise with the aim of jointly analyzing the legal framework and providing proposals for overcoming relevant legal obstacles.

FIC committees usually provide commentaries on new draft laws and propose amendments to existing laws, as well as formulating specific proposals and materials. The FIC executive team provides regular administrative support to the committees and coordinates their work.

FIC committees initiate and develop a direct dialogue with relevant government authorities and important stakeholders (like the Delegation of the European Union), while promoting their stances and giving proposals for advancement of the business environment. Each FIC committee has a president and vice-president, who are elected by committee members and given a two-year mandate.

FIC currently has eight active committees – cross-sector committees like the Legal Committee, Tax Committee, Human Resources Committee and Anti-Illicit Trade Committee, as well as sector-based ones – Food & Agri-

culture Committee, Leasing & Insurance Committee, and Telecommunications & IT Committee.

Considering that liquidity is one of the burning issues in Serbia at the moment, FIC has formed a working group on the implementation of the Law on Payment Deadlines, with the aim of providing support to formulating and implementing this law.

Committees are established based on the interest of the members and in line with changes to the business environment. Active involvement in committee work is carried out on a voluntary basis, reserved exclusively to FIC members, while the establishment of sector-based committee is based on demand from the representatives of the specific industry. These committees develop a direct dialogue with relevant government authorities and stakeholders, while providing their contribution to the introduction of European norms and standards in the domestic legislative framework.

By engaging actively in FIC committees, member companies have the opportunity to propose solutions for overcoming existing obstacles to doing business, discuss regulatory issues relevant to the industry they represent, thus creating a common platform to be advocated for, and contribute to drafting the White Book.

Each FIC member can choose between the status of an active committee member or observer member status, depending on their involvement in a certain issue.

In order to ensure transparency and the more substantial involvement of FIC members in committees, their work is regulated in detail. The Board of Directors supervises the work of committees, as well as approving the decisions adopted by them and their stances on legislative issues. ■

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INTERVIEW

Banking is Field Work SVETLANA TOLMAČEVA DINGARAC President of the Executive Board of ProCredit Bank

We do not do armchair banking, but rather we strive to get to know our client as an entrepreneur and as a person, because someone's vision, enthusiasm and ability cannot only be seen through a balance sheet

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depth approach which enables us to look at ality management. What needs to be addreuided by the principles of resbusiness ideas from every possible angle. ssed additionally is the culture of long-term ponsible banking and utmost By analysing our clients’ businesses, we are planning. Also, considering the European care for clients, ProCredit Bank able to ascertain a possibility of error in integration process, Serbian legislation has endeavoured to give its full their decision making process and business needs to start complying with European support to the further development of Seroperations, and hence advise them on how laws, which will result in a better environbian entrepreneurs, businessmen and farto increase their market competitiveness – ment for investors and facilitate doing bumers since its very inception in Serbia. “Our especially considering the fact that the lesiness. One of the most important challenadvisory approach to each individual client vel of competitiveness will grow once the ges the Serbian economy will have to deal and deep understanding of their businesEU market is fully opened,” says Svetlana with once it joins the EU market is the ses and the challenges they face has made it Tolmačeva Dingarac, President of the Exemodernisation of business operations in possible for us to support them. One of the cutive Board of ProCredit Bank. terms of their environmental impact. Probest examples of our business practice lies Credit Bank is especially eager to in providing quality assessments support investments in so-called of a client’s credit worthineSmall and medium-sized enterprises 'green financing' and, by so doiss, which entails the bank first are the undeniable future and backbone ng, support the competitiveness getting to know that client’s buof the Serbian economy. siness, business model and marof the Serbian economy. Through loans ket position, followed by careful for energy efficiency we support their analysis of all financial indicators ► What do you think the future investments in more productive, and thus of the Serbian economy is goiand an assessment of the risks associated with their businesses. ng to be like? more competitive, production Based on that, the bank can ascer- Small and medium-sized entain an adequate level of credit, present the terprises are undoubtedly the future and ► Since ProCredit Bank is the only Gerclient with the risks associated with thethe backbone of the Serbian economy, as man bank operating in Serbia, could you ir business and suggest what needs to be well as the creators of new jobs. In order shed some light on how German invedone in that respect. I often say that there for that to happen, you need to modernistors view Serbian companies? is no support without understanding, whise, cut back on unit production costs and - German investors certainly see big invech is why our approach is different. We visit be mindful of energy efficiency and busistment potential in Serbia. The positive our clients in their surroundings and get to ness standardisation. That's why having features of Serbian companies are quality know them as entrepreneurs and human financial support that won't be too much workforce (professional staff), work entbeings, because their vision, drive and abiliof a burden, but would rather positively husiasm and willingness to work hard. In ty cannot be discerned from balance sheets contribute to their responsible business comparison to other countries in the realone. This is not your typical run-of-thebehaviour and quality growth, is so imgion, Serbian businesses set themselves mill cushy banking, but rather entails an inportant to them. ■ apart thanks to their high level of good, qu48 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 49

INTERVIEW

Health is Our Mission ANA GOVEDARICA CEO of Roche d.o.o. Serbia

As one of the leading pharmaceutical companies in Serbia, Roche strives to provide patients with the most advanced therapies, and participating with its knowledge and experience to the continuous improvement of the local health system

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oche is the global industry leader in innovation and the largest biotech company in the world. As one of the leading pharmaceutical companies in Serbia, Roche seeks to use its global leadership to demonstrate the effectiveness of the registration process of modern therapy and continuously contribute to the improvement and development of the health system. For many years Roche has provided patients in Serbia with cutting-edge therapies in oncology, virology, rheumatology and neurology under the shortest possible deadlines. At the same time, the company is working to improve the healthcare system and find the best long-term solutions through the transfer of knowledge and experience.

How do you assess your cooperation with health institutions in Serbia and how is this cooperation realised?

- We have very correct cooperation with all key factors in Serbian healthcare and we strive to ensure our presence is useful for patients and healthcare workers

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in Serbia. As a leader in the field of oncology, we are particularly focused on issues related to the quality of hospital care, from the organising of hospitals themselves, to the quality of treatment. In addition to this, we strive to contribute to strategic planning and improving healthcare strategies. Healthcare is a very complex area and each country has its specific problems and limitations. We are guided by the belief that the nation's health should be the top priority and with such a mission we work committedly with all the countries in which we operate, taking into account all the specificities and challenges we face.

What are the key elements of effective healthcare and what are the ways it is advanced?

- There are no universal solutions or unique and simple ways to achieve an optimally effective healthcare system, because each country is

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GLOBAL LEADER IN INNOVATION

Swiss pharmaceutical company Roche is a leading pharmaceutical company with joint strengths in diagnosis and therapy. Roche is the global industry leader in innovation and the largest biotech company in the world that offers an innovative therapeutic option in oncology, immunology, infectious diseases, ophthalmology and neurology. According to data from 2013, the Roche Group employs more than 85,000 people and annually invests 8.7 billion Swiss francs in the research of new therapeutic options, achieving a turnover of 46.8 billion Swiss francs. American company Genentech is a wholly-owned subsidiary of the Roche Group and Roche is also the majority owner of Chugai Pharmaceuticals in Japan.

50 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

a specific case. However, there are models of well organised healthcare, quality management of resources, long-term planning and nurturing the necessary level of transparency in decision-making, which can serve as experience of confirmed good practices. When a decision-making system is organised to serve the long-term health of the nation and encourages the promotion and sustainable development of health, rational and planned use of resources and training of health workers, then that task includes all relevant structures and places the profession in a position to make the maximum contribution. ► What are the key factors for

the efficient functioning of the healthcare system when it comes to the profession?

- A high level of expertise, knowledge and dedication is not enough if the profession does not have an impact on decision-making. In countries that have healthcare at a high level and a health system that thinks and plans ahead, the profession is fully respected and has transparent and dynamic dialogue with all decision making structures. There is no other way to properly manage time, which is a key factor in the successful treatment of serious diseases, and identify in advance the problems that will occur and to ensure timely preparation for them.

the global trend is that health is under significant financial pressure and that there is also a need for better treatment of the outcomes on the rise, it is the local environment that determines the business philosophy in each particular country. Therefore, in recent years Roche has become a very active member of the business community in Serbia. Starting from the association of innovative manufacturers of medicines, INOVIA, in which Roche made a significant contribution to better understanding the importance of this industry for better treatment of patients, as well as improving the general standards of treatment, and to membership in the Foreign Investors Council in Serbia. Roche seeks to identify key issues in the health and pharmaceutical industry, with the aim of efficiently overcoming and making a greater contribution to overall economic recovery.

To this end, Roche also became one of the founders of the Swiss-Serbian Chamber of Commerce.

- Establishing this chamber is an expression of confidence in the future of Serbia. We, as representatives of Swiss business in Serbia, together with local businesses, expect further expansion of economic cooperation between the two countries to contribute to increasing investment and creating new jobs in Serbia. Swiss companies are well acquainted with the Serbian market, as Switzerland is among the top ten investors in Serbia and economic relations between the two countries have huge potential for further development. I am convinced that the Swiss-Serbian Chamber of Commerce will help ensure this potential is utilised as much as possible, for the betterment and future prosperity of both sides. ■

►

We have very good cooperation with all key factors in Serbian healthcare and we strive to make our presence useful for patients and healthcare workers in Serbia

How does Roche contribute when it comes to the overall improvement of the pharmaceutical industry in Serbia?

- When it comes to the pharmaceutical industry, for pharmaceutical companies it has not been enough for a long time just to have effective medicines. Although

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PERSONALISED MEDICINE

PARTNER TO THE HEALTH SYSTEM

Roche's concept of personalised medicine is focused on providing treatment and diagnostic procedures that provide significant improvements in the health, quality of life and survival of patients. It is a concept that is based on providing treatment "tailored" to specifically defined groups of patients. In certain diseases Roche’s diagnostic tests can identify those patients who best respond to a particular therapy.

This means that doctors can accurately determine where, when and how to administer a certain drug. All new medicines that Roche develops are in correlation with diagnostic tests, which contributes significantly to the effectiveness of treatment.

Roche has contributed significantly to global health in the last 100 years. On the list of essential drugs recommended by the World Health Organisation, which includes antibiotics, antimalarial and cytostatic agents, there are 24 drugs that were developed by Roche. Roche in Serbia is working with Galenika in the area of licensed production of several of its products. Cooperation between the two companies in other forms is almost half a century long and drugs made by Roche have been available to patients in Serbia for almost 80 years.

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 51

COMMENT

We Support the Government in Fighting the Grey Eeconomy GORAN PEKEZ President of the Anti-Illicit Trade Committee of the Foreign Investors Council (Japan Tobacco International)

Curbing the grey economy would be a step forward in improving the business climate and enticing new investments, and the FIC and its Anti-Illicit Trade Committee would be ready to help the Government by sharing experiences and offering proposals

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and loopholes that enable the transferring of responsibility esponding to the burning issue of illicit trade, in from one institution to another, a lack of proper supervisi2014 the FIC formed its Anti-illicit Trade (AIT) Comon and accountability of public servants. We believe that a mittee, with the goal of supporting and assisting the long-term solution to this problem is putting in place a bugovernment in establishing, maintaining and coordisiness-friendly regulatory framework and supervising its nating an efficient system of adequate decisions and measures implementation strictly. On the other hand, we see the estato fight illicit trade and the grey economy in Serbia. blishment of an efficient market surveillance system, with The grey economy has a severe impact on the entire sothe improved work of inspections, as an immediate measuciety, the economy in general, as well as the state budget. re to be conducted in the fight Annual losses to the Serbian against the grey economy. The budget are estimated at aroufocus should be on ensuring nd €3 billion. That is why we The overlapping competencies better coordination between are convinced that this proof different inspections, unclear different inspections, with the blem should be tackled with regulations and a lack of proper purpose of responding swiftly full attention and that reduand more efficiently tackling cing the grey economy would supervision and accountability the problems faced by businecontribute to creating a more of public servants, are “feeding” sses. In that regard, we welcofavourable business climate, the grey economy. The long-term me the announced reform of which would attract further the inspections as part of the foreign investments but also solution to this problem is putting in regulatory reform for 2014, as provide domestic companies place a business-friendly regulatory well as the proposed Law. in Serbia with a chance for framework and supervising its Recent changes to the Law sustainable growth. We welon Tax Procedure and Tax Adcome the announcement of implementation strictly ministration provide additional the Serbian Government to opportunities to suppress illicit fight against illicit trade by all trade, but they need to prove their effectiveness in practice means and by doing so to “return” €100 million of revenue through strict and continuous implementation. Since the illiback to the state budget only this year, and by 2017 between cit trade in cut tobacco has caused budget losses of over €200 500 and 700 million. The FIC is ready to help in this process million since October 2012, the government’s determination by sharing experiences and offering proposals from its Anto fight this specific issue is understandable and we fully suti-Illicit Trade Committee. pport it. The next step, in our opinion, is the more consistent The grey economy survives as a result of the overlapping application of tax regulations. ■ competencies of different inspections, unclear regulations 52 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

INTERVIEW

Investing in Future Progress KAROLY ECKER Managing director Tebodin Hungary Kft. & Tebodin d.o.o. (Serbia)

Although the crisis is still present, Southeast Europe has potential and Tebodin values Serbia and the region as promising markets in which it currently works with foreign direct investors, as well as domestic clients who value its top notch engineering and consultancy services

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ebodin is here to stay says Karoly Ecker, managing director at Tebodin Hungary Kft. & Tebodin d.o.o.

(Serbia), who believes that there are many areas in which the company may grow its business in the region, either based on its own expertise or joining forces with its sister companies from the Bilfinger Group.

services of the same level as similar foreign investments. We have recently made a very significant shift into the real estate market, proving our reliability and engineering excellence as project managers on a very prominent commercial development in Belgrade: A Blok Development (Blok 67a, New Belgrade). Through our Client-focused orientation and dedication, as well as the expertise of local staff, we have been able to go above and beyond the call of duty and our results really do speak for themselves.

a lot of time and effort before they become smooth working practice.

► Could you conclude from the dynamics of your work that Southeast Europe is slowly emerging from the crisis?

- The crisis is still there in many countries of Europe. Southeast Europe in particular is suffering a lot. However, the potential to grow remains in the mid-term. It is hard to predict the political and economic effects of ► Which segments of the consulting and the recently developing conflict in Eastern construction markets is Tebodin focuEurope, not just to the SEE region but for sed on in Serbia? the entire EU. Tebodin continues to con► How much are administrative proce- Industrial developments are currently our sider Serbia (and the whole SEE region) a dures in Serbia in line with the needs of main focus. However, our involvement in promising place for our engineering and companies like yours? real estate (especially in complex consultancy business, considering – residential and office) projects is that economic recovery and EU growing. In line with Tebodin's core We have recently made a very accession is only a matter of time. services in other countries, our aim This is not just Tebodin's idea, but significant shift into the real estate is also to gain a market share in oil also the extract of several discusmarket, proving our reliability and & gas and energy related projects. sions with our global clients who represent more than 200 of the leaengineering excellence ► Are your partners exclusively ding companies all over the world. foreign companies that operate in Serbia or do domestic investors reco- We mainly establish direct contact with ► Does your commitment to focus on gnise the importance of highly professithe administration when we help our projects related to oil, gas and energy onal project management and construClients in their investment projects. We see also relate to the regional market? ction management? the signs – at least the intent – of improve- The oil, gas and petrochemicals market is - Our main clients are private foreign direment, but the actual result may significanat the core business of Tebodin worldwide. ct investors (FDI) from various industries, tly differ between authorities, within regiThe same as in the field of power generawho value both the international quality ons and local municipalities. We (hence our tion, we even have the possibility to join of our services and our local knowledge. clients) have very good and quite negative our competences with specialised sister Besides this, we are engaged by major doexperiences as well, fortunately more on companies from the Bilfinger Group. We mestic investors as well, who are interested the positive side. Implementing the recent aim to expand Tebodin’s activities to these in receiving engineering and consultancy improvements in legislation may still take business segments in the region as well. ■

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 53

COMMENT

No Competitiveness Without More Predictable Environment MILICA STEFANOVIĆ President of the Food and Agriculture Committee of the Foreign Investors Council (Coca-Cola Company-Barlan S & M Ltd.)

Although there is significant potential in agriculture and food production, Serbia lacks a predictable environment and high quality, applicable regulations. A good example of this is the Law on Food Safety, which is largely harmonised with EU standards, but its implementation is still in the early stages due to a lack of bylaws

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erbia is recognised as a country with great potential when it comes to food and agriculture, but to realise this predisposition the country lacks a predictable and stable legal environment. A good illustration of this problem is the Food Safety Law, which is largely harmonised with the relevant EU legislation, but its consistent application, as well as the development of by laws that should regulate its particular fields, is still in its early stages. We hope that in making the announced amendments to the Law, the Ministry will consider the remarks presented by industry on several occasions to date, including proposals that were formulated in the work of our committee. This would create a predictable, transparent environment that would bring certainty to the players operating in these areas.

Another very important issue in this domain is that of applying quality standards and market controls. The whole industry talks openly about this problem, but unfortunately very little movement has been seen in a positive direction since we began monitoring this issue as a committee. We hope that the establishment of a national reference laboratory in Batajnica, which would initially deal with the control of milk quality, will contribute to regulation of the market for this important food product.

At the same time, it would be good for that to serve as guidance for the executive authorities to establish this same system for other important food groups without delay, which would contribute to improving consumer protection, but also establish order on the market and among manufacturers.

For years the FIC Food and Agriculture Committee has also

been highlighting the importance of creating a predictable medium-term plan of subsidies in agriculture.

When it comes to the area of subsidies, which most directly influence the decisions of manufacturers, the Food and Agriculture Committee is primarily of the standpoint that we should establish a permanent and transparent solution that will enable manufacturers to plan their activities, through four-year strategies for large agricultural production sectors. We also consider that constant changes to the system – from a regime of direct distribution to crop farmers per unit of product per hectare, to the model of granting subsidies per hectare of registered surface area – represents an example of creating confusion among the beneficiaries of subsidies, but also a lack of predictability, which represents a key factor in the planning and implementation of activities in the agricultural sector. And finally, such a system does not encourage productivity, which will be essential to us at a time when our country becomes a member of the World Trade Organisation, when subsidies will be phased out. Therefore, without hesitation, right now we have to work on preparing the market for that modified mode of working, in order to maximise all of the advantages provided for us in the country by our nature and tradition of agricultural production.

It is clear that these are a major and important moves, but we believe that together, through close cooperation between working bodies like the FIC Food and Agriculture Committee and relevant decision-makers in the country, we can accelerate the reform of this important sector and restore the role it deserves in the economy of our country. ■

If the national reference laboratory in Batajnica finally starts to, initially, deal with quality control of milk, that should serve as guidance for the executive authorities to establish this same system for other important food groups without delay

54 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

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COMMENT

New Labour Law Will Open the Possibility for Better Employment DEJAN JEČMENICA President of the Human Resources Committee of the Foreign Investors Council (Wiener Städtische osiguranje a.d.o. Belgrade)

We believe that amendments to the Labour Law, which incorporate a large part of the recommendations of the Foreign Investors Council, will make Serbia more competitive for new investments. In order for good legal solutions to yield results in practice, care must be taken to ensure its consistent application

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changes in property relations. he Foreign Investors Council welcomes the adoption of Instead of the current dominance of natural and financial amendments to the Labour Law and is pleased to note resources, the developed countries of the world are now direthat this legislation includes 65 per cent of recommendacting their development objectives and strategies towards the tions from last year's FIC White Book. This relates to key dominance of human resources, which consequently requires recommendations, amongst which are extending the duration of changes to the current education system and the creation of a fixed-term employment contracts, calculating severance payment functional curriculum appropriate to the changing economic only for the period spent with the last employer and limited extenconditions. This kind approach is also beginning to be evident sion of the application of industry-wide collective agreements. in our country, although we are still at the very beginning Amendments to the Labour Law will enable the better and when it comes to its application. However, it is good that we more effective management of human resources, easier engagehave recognised new trends and want to accept them. ment and planning for the hiring of new employees. The FIC beIt is a fact that in the past 20 years we have done little on lieves that these changes will improve the general environment the expansion of new knowledge, skills and competencies at for doing business significantly and make Serbia more compeall levels of society. Such an approach results in overall incomtitive for new investments. However, adoption of this new, mopetence when it comes to the dernised Labour Law should be new demands of the market. accompanied by its consistent In order to overcome the problem of a The education system in Serbia application. Only in this way can the state secure equal conditions lack of human resources for strategic is adapting very slowly to the needs of companies that do bufor all market participants. leadership positions, Serbia must siness here, whether that be doThe modern Labour Law is mestic or foreign employers. just one step towards adapting address the issue of the brain drain This problem is particularly Serbia to the increasingly comand modernise the education system evident when it comes to the quplex and rapid changes on the ality of local managerial staff, of global labour market. which there are very few. That’s why foreign companies, and Changing the role and method of functioning of today's increasingly local companies too, are forced to seek professiobusiness systems, as the fundamental subjects of economic nals from abroad with new knowledge, experience and approactivity, is conditioned, among other things, by radical chanaches, in order to be as competitive as possible and maximise ges in the role and importance of those employed within those the likelihood of achieving good results. systems. This brings with it a need to provide contemporary In order to overcome the problem of a lack of human reand high-quality human resources that are able to participate sources for strategic leadership positions, Serbia must addrein achieving the goals of business and development policies, ss the issue of the brain drain and modernise the education and to do so under conditions of great economic uncertainsystem to bring it into line with the needs of the market. ■ ty, rapid technological change, dynamic transformations and 56 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

INTERVIEW

Laws Should Not Contradict Each Other DARKO SPASIĆ

Managing Partner, Partnership law society Spasic & Partners

In harmonising its legal system with that of Europe, Serbia should bear in mind that the chosen solutions need to be coherent and guarantee a stable and transparent business framework

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n incoherent legal system, which provides space for different interpretations, leaves investors uncomfortable and keeps them insecure, says Darko Spasić, managing partner at Partnership law society Spasic & Partners.

real economic and living conditions and problems may be observed. Legislative activity, primarily and secondary alike, may not be reduced to a simple transferring of the experiences and solutions of others.

The need for vigorous activity in the sense of secondary legislation is observed in the fields of civil engineering, environmental protection, protection of competition, securities, property rights, sports etc.

It should particularly be considered that the secondary legislation must have as a goal facilitating simple and clear implementation of regulations without unnecessary complications and multiplication of conditions.

two persons before the courts of law in Serbia; that the dispute will be reviewed and adjudicated by the highest professionals; that the dispute will be finalised and the judgment implemented in very short periods of time; that the process will be independent of any influence and transparent in every respect and that the organizational changes in the work of the courts will not result in any loss of time or trust in the process.

► What major challenges do foreign investors face in Serbia, in terms of legislation?

- Problems occur in the sense that the same ► To what extent are amendments to the regulations are interpreted and implemenSerbian Labour law in line with Europeted differently by different institutions; an standards? that, due to the personnel changes in ad- The labour law must seek a good balance ministration, there is a slowdown in between the legitimate needs of emthe work and an interruption in the ployers for efficiency and respect of Legislative activity cannot be implementation of obligations towareconomic criteria with the social cirds foreign investors; that the intercumstances. It must be kept in mind reduced to a simple transfer of the pretations of the administration most a labour law that does not take experiences and solutions of others that often to not provide a clear answer, into consideration the interests of debut rather only quote the regulations; veloping companies (employers) inethat interpretations are given that are often vitably leads to the decrease and absence of ► How important is reform of the judicontradictory to others and really depart investments, which only increases unemcial system for the creation of a better from the letter and spirit of the regulations. ployment and multiplies social problems business environment in Serbia?

This raises discomfort among investors long-term.

- A completely independent, professional, with regard to the transparency and stabiAt the EU level, the commission adopts efficient, morally clear and stable and well lity of conditions of operations. minimal standards below which the natioorganized judicial system of the highest lenal standards may not go. The most recent vel of quality is indispensable for the good amendments to the Labour Law are not quality of the business environment in any ► Where is the lack of bylaws and the contrary to the minimal standards. If comcountry. adequate procedures most pronounced pared with the national regulations of EU The business environment must be when it comes to business operations? countries, those are not far from the stansuch that no investor may objectively have - In the process of adjusting bylaws, one dards set under such legislations, but it also doubts that his potential dispute with any may notice delays, even solutions, that comay be concluded that employers are plaperson will be treated in the same and equal uld be treated as a consequence of insufced in better positions in some aspects. ■ way as any other dispute between any other ficient analyses and understanding of the

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 57

COMMENT

Leasing Could Fuel Agriculture Growth CHRISTOPH LEITNER President of the Leasing and Insurance Committee of the Foreign Investors Council (VB Leasing d.o.o. Beograd)

In 2013 the leasing of agricultural vehicles and machines grew by 40%, to â‚Ź25 million. The FIC is advocating for the initiation of amendments to the Law on the Stimulation of Investments in Agriculture and Rural Development, with the aim of including the financing of leasing within this stimulus package for agriculture

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atural disasters caused by increasingly volatile climate changes are one of the biggest challenges to the insurance industry. It is an additional obligation to reconsider the existing regulatory environment on the market, to set fair and level playing field conditions, but also to create some future products to respond to such accidents.

During the recent floods in Serbia we witnessed human tragedies with irrecoverable losses. Many people lost their property, while many entrepreneurs saw their fixed assets devastated.

This more than ever demonstrates the necessity of higher insurance penetration of the Serbian market, in order to insure the property of private households, as well as the property of business and insurance for business interruption.

We believe that securing a level playing field would be an important stimulant for market growth. The Government should undertake reform of insurance regulations via integration of the insurance companies that practice life and non-life business separately, via transition to underwriting a model from the tariff system, via changes in MTLP (regulations related to motor vehicle insurance).

A positive change in the insurance domain in the last few months is liberalisation through the enabling of group private health insurance. On the other hand, no significant progress was achieved in the last year and the main reason behind that, according to our view, was the delay in publishing and adopting the new insurance law, which was finally presented to the public at the end of May this year.

Positive developments in leasing are clarification of the taxation rules for financial and operational leasing, as well as more favourable VAT treatment in real estate leasing.

Furthermore, due to regulations in the CIT law, the acquisition of fixed assets under a financial lease contract was a less appealing

alternative than, for example, financing asset acquisition through a lending arrangement. For years leasing companies advocated for the elimination of this discrimination, proposing changes to the CIT Law in a way that would allow utilisation of tax credits, regardless of the method of financing. However, without any public discussion, the tax credit provided by article 48 of the CIT Law was abolished as of 1st January 2014. After the abolition of this tax credit, leasing companies can now offer their services on the same level playing field as other sources of financing, with regarding to the aforementioned topic, while a tax credit for all investments, regardless of the method of financing, would have been the preferred solution for the leasing industry.

There is a significant difference between the development of the leasing industry in Europe and in Serbia. The data speak for itself: according to research conducted by the European Central Bank (ECB), 32% of SMEs in Europe have used leasing, rental and factoring, as well as 59% of major companies, which is significantly more than any other form of financing. In Serbia, according to the data issued in a publication as part of a USAID project for better business conditions, only 1% of SMEs are using leasing as a financing option. In order to improve this situation, the legal and taxation framework for the regulation of operative leasing and the VAT treatment of interest have to be changed.

One positive example of the Serbian economy being supported through leasing is the field of agriculture. In 2013 the leasing industry had growth of nearly 40% in agricultural vehicles and machines, amounting to â‚Ź25 million. In order to increase leasing in agriculture development, the FIC supports the adopting of amendments to the Law on the Stimulation of Investments in Agriculture and Rural Development, in order for financial leasing to be included within this stimulus package for agriculture. â–

The recent floods showed the necessity for higher insurance penetration on the Serbian market

58 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

INTERVIEW

In Crisis Quality is Recognised NEBOJŠA JANIĆIJEVIĆ CEO and President of the Executive Board of Intesa Leasing Belgrade

In the transport sector, which is growing day by day, leasing has become an important form of financing, which opens up room for the further growth of placements

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traditional sectors of equipment leasing and commercial vehicles, and in the fast-growing sectors of agriculture and energy efficiency?

- In the transport sector, which is developing day by day, leasing is recognised as an important form of financing, which opens up space for the further growth investments. In this segment Intesa Leasing is one of the most represented financiers of the procurement of new commercial vehicles, with around €12.8 million invested in the last year, and we are all increasingly present in providing support for the purchase of tourist and city transport buses. In this regard I also believe that the project to revive production at Ikarbus will impact on growth in demand and thus further incre-

but I believe that the situation will change significantly in the years ahead.

► To what extent have our country’s lawmakers and the market recognised the benefits of financing real estate through leasing, compared to traditional mortgage loans?

- The latest amendments to the law on VAT created all the conditions for real estate financing through leasing, which Intesa Leasing remains the only company to offer on the market. However, the difficult situation in the housing market prevents the expansion of leases in this segment and the achieving of ► In your opinion, what factors determiindicators of developed markets, where the ned such results? purchase of real estate via leasing comprises - We supported many lessees in the earliest 50% of total investments in the sector. Nonetstages of their business, together heless, in collaboration with the Busharing the burden of the altered ilding Directorate of Serbia, we have Our focus on small and medium-sized economic environment, endeavomanaged to implement the financing uring to show understanding for enterprises, which make up 70% of our of parking spaces in the Belgrade suthe difficulties in servicing obligaburb of Stepa Stepanović. clients, has enabled us to be a leader tions, seeking with them solutions to the problems. We were also the► In the EU leasing is an imporin the financing of manufacturing re for them when they faced the tant driver of economic growth. equipment, primarily for family consequences of the recent floods How much is this possibility utibusinesses focused on exports and offered them incentives to help lised in Serbia? overcome this difficult situation. I - Statistics at the European level believe that it is precisely this kind of recent ase the investments of Intesa Leasing. Our show that up to 20% of all purchases of partnership model of cooperation with our focus on small and medium-sized enterequipment in the SME segment are conclients, as well as great attention to every seprises, which make up 70% of our clients, ducted through leasing, while in Serbia the gment of the business, that were key factors has enabled us to be a leader for many yeproportion is only 2-3%, which clearly inthat led us to the position we now hold. ars in the financing of manufacturing equdicates the great potential for the developipment, primarily for family businesses ment of the leasing market in the country. I focused on exports. When it comes to agri► How, on the basis of examples from expect that our continued approach to the culture and energy efficiency, investments your own operations, would you assess EU will lead to more intensive following of are unfortunately below our expectations, the potential growth of leasing in the European trends in this area. ■

reat dedication, hard work and a focus on continuously improving offers, especially in the area of service quality, come to the fore fully precisely during economic downturns, when the volume of demand for leasing services is narrowed, says Nebojsa Janićijević, CEO and President of the Executive Board of Intesa Leasing Belgrade, one of the country’s few leasing companies operating successfully.

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 59

COMMENT

Laws Should be Accompanied

by High-quality Bylaws RASTKO MALIŠIĆ President of the Legal Committee of the Foreign Investors Council (Marić, Malisić & Dostanić o.a.d.)

Although we fully understand the need for quick and effective reforms in a great number of areas, we consider that without a high quality debate and the possibility for all parties to give their suggestions and comments, we cannot reach lasting and applicable legal solutions.

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he role and influence of the Foreign Investors Council, and particularly its Legal Committee, continually grow and strengthen. This is the consequence of three parallel processes and influences: the first is reflected in the growing number of new FIC members; the second is linked to the fact that legislative activity is increasing from year to year, in accordance with Serbia's EU and European integration; and the third relates to the attitude of the government and state authorities, which increasingly recognise the FIC as a reliable partner tasked not only with protecting the interests of foreign investors, but rather also highlighting the possibilities in different segments of improving the legal framework in Serbia for the benefit of all, including the public sector and the government, as well as the private sector.

During this year the FIC Legal Committee has taken an active role in commenting on draft laws and other regulations and in proposing new solutions related to regulations under the jurisdiction of the committee. However, despite the undisputed good will and intentions of the government to listen to our proposals and suggestions, in certain cases the deadlines by which the FIC was expected to present its views on systemic laws were too short, which prevented the formulation of an adequate stance. Although we fully understand the need for quick and effective reforms in a great number of areas, our position is that for all laws, and primarily systemic laws, enough time must be set aside for a public debate and the submission of quality comments and suggestions from all relevant stakeholders. Such an approach would contribute to laws being fully and efficiently implemented from the first day of their adoption. Likewise, it is very important, during the adoption of new laws or significant amendments to existing regulations, that the sustainability and urgency of deadlines provided for the adoption of bylaws

is taken into account, and that the work of all agencies and institutions that need to adopt these regulations is coordinated. This is particularly because in the previous period there were situations in which important laws were adopted that, practically could not be applied because accompanying bylaws were even non-existent or not adopted on time.

With most regulations that were adopted recently or are awaiting adoption soon, significant progress is evident in terms of the legislature adopting the recommendations and opinions of the FIC Legal Committee. On the other hand, we must also draw attention to the existence of important pieces of legislation that have not changed or have changed only slightly, despite the fact that the Legal Committee has emphasised the necessity of changing them over an extended period of time. One such document is the Law on Foreign Exchange Operations, which is not only in the focus of the FIC and the Legal Committee, but also the entire private sector in Serbia, for many years.

Despite some minor changes made to the law and some others planned for this year, we consider that it is necessary to exert further efforts and allow further liberalisation of foreign exchange operations for the mutual benefit of all market participants. Moreover, problems have been identified in practice, related to different interpretations of the articles of this law by various government agencies, and thus it is also necessary to work on consistent and uniform application of this law at all levels of government. Finally, we would like to underline that the Legal Committee plans to additionally step up its work in the following period and participate in proposing and commenting on the new regulations, as well as exercising a proactive approach in order to initiate regulatory changes with the aim of providing comprehensive protection for all investors, and, thus, provide its contribution to establishing a good business climate for all market players in Serbia. ■

The state authorities increasingly recognise the FIC as a reliable partner tasked not only with protecting the interests of foreign investors, but rather also highlighting possibilities in different segments of improving the legal framework in Serbia for the benefit of all

60 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

INTERVIEW

Reliable Partner to Exporters DEJAN VUKOTIĆ Director of the Agency for the Insuring and Financing of Exports (AOFI)

Serbian exporting companies are increasingly recognising the role and importance of AOFI in fostering the growth and development of export

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ince it was established in 2005, the Agency for Insuring and Financing Export (AOFI) has become a recognisable institution among Serbian exporters as an institution that recognises the needs of exporters, responding swiftly and operationally to their requests and proactively participating in solving the problems that exporters face in their operations, according to the model of similar institutions in the EU and the environment, says AOFI director Dejan Vukotić.

the importance of insurance claims and therefore payments for losses per insured business. The agency diversifies its risk for insured claims through reinsurance with reputable reinsurance companies such as Atradius re and Nationale Borg.

Do you intend to lower the threshold for the annual volume of exports, which prevented smaller companies from using the cheap loans you offer?

- Recognising the importance of AOFI to growth and development, especially of exporting SMEs, the decision was brought to reduce the threshold of exports

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additional capital?

- The AOFI used credit lines previously, thus it is now negotiating with the relevant international financial institutions on the obtaining of lines of credit, which would allow an increase in the business activities of the agency, given the growing interest in our products. Contracting credit lines would allow the agency to follow the market conditions imposed on us by banking competition and respond to the needs of an increasingly dynamic market.

► You are one of the few organisations that is not a budget user, while you conHow many clients does AOFI have totribute significantly to the budget. day in the credit segment, insuranAccording to your estimate, how ce and factoring, and how many Contracting new credit lines would much will the AOFI contribute to Serbian companies today recognise allow the agency to follow market the state budget this year? the benefits of working with AOFI? - In the credit segment the agency cuconditions that are imposed on it by - Just on the basis of the obligation of companies founded by the Republic rrently has a portfolio of 156 clients banking competition of Serbia to transfer at least 50% of with whom around €57 million have profit to the budget of the Republic been invested. In the area of factoring of Serbia, up to 2014 the agency has paid services, the agency uses 50 clients who to €100,000, with exporters who had no the amount of RSD400 million. If we look have purchased receivables in the amount exports in previous years able to apply proonly at 2014, for the first six months, on all of €31 million. According to the insurance of vided they have achieved corresponding bases, the agency paid into the budget the insuring exporters, the agency has 53 clients proportionate amount in the current year amount of RSD87 million and in the name with secured turnover of €86 million. In the by the date of the application. of profit distribution an additional amount segment of guarantees, there are 10 active of RSD30 million will be paid. As the agency guarantees in total exports of €80 million. ► In what way does the AOFI provide has achieved a net profit of around RSD214 Serbian exporters increasingly reconew lines of credit and how much have million at just the six-month level, it is clegnise the role and importance of AOFI in they moved away from earlier announar that in 2014 the agency will contirubte a fostering the growth and development of ced negotiations with international fisignificant amount to the Serbian budget. ■ exports. Exporters have also recognised nancial institutions on the collection of

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2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 61

COMMENT

Better a Tested Solution Than a Hasty One NEBOJŠA NEŠOVANOVIĆ President of the Real Estate Committee of the Foreign Investors Council (Jones Lang LaSalle d.o.o. Belgrade)

If the swift adoption of legislation becomes the norm rather than the exception, it may happen that we adopt proposals that are not only second best, but also not conductive. In the case of solving complex issues, it would be better to carry out the simulation process and avoid shortcomings before it is too late

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he general recommendation of the FIC is that, when it comes to the conversion of rights to use into the right of ownership over construction land, the proposed solutions should take into account previous decisions of the Constitutional Court and must be technically applicable. We have provided representatives of the Ministry with numerous concrete proposals on how to improve the existing draft and we are pleased to say that a good part of our recommendations have been accepted. I believe our constructive approach has been recognised and that, as a result, we have excellent communication with the relevant ministry.

However, it is with regret that I note that the government did not have the political courage to make a bigger step forward with proposed solutions in the Law on Planning and Construction. Here I am primarily referring to retaining the institute of conversion with fees, which in recent years has caused great damage to the construction industry and has caused considerable social turbulence. The FIC proposal, as well as other business associations, is to withdraw from this institute. The potential benefits to the state are too small compared to the complexity of the process and potential risks. On the other hand, the benefits of an easy and quick solution to this problem would be multiple.

It is often the case that laws are adopted through emergency procedures. This approach carries the risk that some of the proposed solutions are not the best, or are not implementable. During the public hearing one could hear very dissonant tones about the proposed solution for the process of granting construction permits. With the regulating of complex areas, the focus should be on the quality of the solution, rather than the timing, regardless of the very real urgency.

Prior to adoption, simulations of the envisaged process should be carried and perceived deficiencies eliminated. If we do not do that now, we will be dealing with these issues indefinitely, which is precisely what's happening with the Law on Planning and Construction.

An implementable conversion process and efficient granting of construction permits are essential, but they are not sufficient conditions to launch progress on the real estate market and the overall construction industry in Serbia. A series of other laws should be promoted, such as the laws on mortgages, agricultural land and agricultural cooperatives, to name just a few. In addition to eliminating the existing problems and carrying out their normal functions, the state should adopt stimulating laws to help the real estate market, and thus the construction industry. Here I am primarily thinking of the Law on Real Estate Funds (Real Estate Investment Trust - REIT).

This law, along with the state’s additional activities, should resolve problems caused by an undeveloped real estate market. In addition to the Law on Real Estate Funds, which would regulate this field and eliminate the problem of double taxation, the state should implement further steps in order to bring real estate funds to life in our country. The main goal of real estate funds is to increase the liquidity and transparency of the market, which would result in attracting new, institutional capital, overcoming the demanded rate of return, increasing construction activities, reducing the rates of rents and increasing the general level of economic activity. On behalf of the Foreign Investors Council, I would like to say that we will remain dedicated to advancing the business climate in Serbia, and add that the Serbian Government can count on the FIC as a reliable partner in this endeavour. ■

It is with regret that I must note that the government did not have the political courage to abolish the institute of conversions with fees, which in recent years has caused great damage to the construction industry and has caused considerable social turbulence

62 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

INTERVIEW

We Need True Cooperatives RONAN CONROY General Director BPI d.o.o., Agri Business Partner d.o.o

We believe the government through enactment of legislation and the development of national policy to encourage true cooperative operations can act as a catalyst to support local agriculture

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In which aspects is Serbia competitive and what more should the state do in order to enable domestic companies to better compete in the region and beyond?

- A welcome focus by all whom have an interest in the success of Serbian business, to include the state, would be to ensure that national policy centres on the advancement and promotion of existing national competitive advantages and those of businesses; whereby we may then see new inimitable forms of com-

sector, we believe that the government must enact the legislation in relation to the Law on Cooperatives. As a Company with operations in other countries, and particularly relevant in Ireland, we have witnessed first-hand the benefits that a cooperative, in its true form, can offer.

Such benefits are not alone for the agriculture sector but also the local and national economy. Present abuses of the existing legislation governing cooperatives represent fundamental abuses of the concept of cooperatives. Some present ► How can Serbia reconcile its objectives operations which function under of liberalising the domestic marthe guise of cooperatives represent ket within the EU integration, whiPresent abuses of the existing opportunism by few instead of le simultaneously strengthening legislation governing cooperatives offering an opportunity for many. its local businesses?

We believe the government throu- Objectives regarding liberalising represent fundamental abuses of gh enactment of legislation and the market places largely seek to enthe concept of cooperatives development of national policy to sure competition of markets wiencourage true cooperative opethin a country, and specific to the EU within its boundaries which we all petitive advantage arising. Furthermore, rations and which is applied strictly at aspire to include Serbia. Liberalisations the government and other interested bo- national, regional and local level; can act of markets bring benefits for both busi- dies should continue to participate hea- as a catalyst to support local agriculture. nesses and consumers with the introdu- vily in the creation of a viable, strong and In doing-so and as we have witnessed in ction of opportunities for consumption credible brand for Serbia for promotion Ireland, many producers whom experience the implicit volatilities of the agriand supply. Furthermore, this aspect of internationally. cultural sector can seek to develop their EU integration should be associated with awareness that EU integration affirms ► How would you evaluate changes to operations within the confines of a focucompetence on Serbia itself for national the legislation related to agriculture; sed group of like-minded producers and economic policy. Such policy by the sta- how could the Serbian government whom may then further pursue an ever present opportunity in Serbian agriculte must seize opportunities arising from help this sector be more competitive? processes such as liberalization.

- Specifically relevant for the agriculture ture, value added production. ■ In the sectors in which BPI is active, agriculture and real estate, we view Serbia’s competitive advantages to be geographical location, quality of labour-force and quality of natural resources. These national competitive advantages we seek to be build-on in order to establish business specific competitive advantages, says Ronan Conroy, General Director BPI d.o.o., Agri Business Partner d.o.o.

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2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 63

COMMENT

Ensuring the Predictability of the Business Environment is Necessary BILJANA BUJIĆ Vice President and Acting President of the Taxation Committee of the Foreign Investors Council (KPMG d.o.o.)

In the recent past a step forward was taken in the formulation of tax laws, but the lack of public debate and the absence of participation of the economy in their formulation cast a shadow over the efforts of the legislator. In addition, some changes to the laws came into effect overnight, indicating a low level of predictability of the business environment

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rom 2012 until today Serbia has changed all tax regulations. These major changes that followed several years of inactivity have in most cases be awaited eagerly by the economy and the general conclusion is that a positive step has been taken in this domain.

However, a shadow is cast over this work, which essentially represents a step forward, by the fact that amendments to the laws were mostly passed without public consultation or the participation of the economy. Moreover, the deadline for their application was inappropriately short, often only a day after publication in the Official Gazette. If we consider that the public could not know in which direction the law would be changed, or that they had very limited and often only unofficial information, such hasty implementation of the law led to companies not being able to adjust their operations in such a short time – particularly because adaptation entails a change in business processes in order for companies to operate in accordance with the new rules, but also adjusting business plans and budgets.

To give an example, the abolition of tax incentives for investments in fixed assets without notice, and less than a month after the adoption of a fiscal strategy envisaging their abolition only in 2015, sent a negative signal to all investors.

The conclusion would be that the absence of a public debate, the failure to involve the economy in making amendments to the laws, as well as adopting changes in the short term, leads to legal uncertainty and unpredictability of the business environment, which undermines the beneficial side of the adopted amendments.

One example of a good regulation, for which it is now necessary to provide good implementation, are the amendments to the Law on Corporate Income Tax in the part on transfer pricing,

where huge progress has been made. The best practice has been adopted based on OECD guidelines, while a number of inconsistencies have been eliminated. What now awaits is the training of taxpayers and, perhaps more importantly, the training of the tax administration in order to prevent inappropriate and inconsistent treatment in practice, which has an impact on legal security and the business environment.

Moreover, the Ministry of Finance should consider whether the prescribed mandatory submission of a study on transfer pricing to the tax administration is the optimal solution for taxpayers. Namely, this commitment represents a major burden for companies who should prepare the study under a short deadline. Here the legislator should especially bear in mind that many companies do not have adequate internal resources for such a complex and voluminous task. Likewise, the adequacy of limits should be examined in terms of the value of transactions for which preparation of a study is not required and where instead it is sufficient to submit a report in a condensed form.

When it comes to the application of the regulations, in practice one observes a major discrepancy, because there is no unified interpretation of the Ministry of Finance and the Tax Administration, as well as no unified interpretation of the regulations within the framework of the tax administration. It can be concluded that the level of coordination with respect to uniform and consistent application of regulation is low, both within the auspices of the tax administration and when one considers the Ministry and the Tax Administration. And cases based on complaints within the context of tax administration still last much longer than is required by law, often longer than a year, even though the legal deadline is 60 days. â–

Abolishing tax incentives for investments in fixed assets without notice sent a negative signal to all investors

64 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

INTERVIEW

Successful, Despite Everything RITA LOZINSKY CEO and director general of ALUMIL YU INDUSTRY AD

We highly value the commitment of the Government on reform steps so far. We expect that, in tandem with the stabilisation of the economy in Serbia, we further advance our operations and investing in Serbia trade agreements that Serbia has with certain countries very attractive.

on planning and construction, because the biggest problem for greenfield investments is precisely in this area.

As for attracting foreign investors to Serbia, I think the benefits that were abolished a few years ago were very attractive, such as the corporate gains tax rate of 10% and tax credit on the basis of investments in certain industrial activities.

► Do you think Serbia has progressed e have never regretted that in building its business environment we invested in Serbia, says for foreign investors, compared to the Rita Lozinsky, CEO of ALU- time when you started the first greenMIL YU INDUSTRY AD, part field investment in 2002? of the multinational company ALUMIL - Frankly, I do not see serious improveMILONAS, which launched a greenfield ments in practice. The biggest problems investment in Stara Pazova in 2002 I see are in very extensive administra- ► Did you fulfil your ambitions to and has doubled its production in the tive procedures, primarily in obtaining expand the number of markets to whimidst of the economic crisis. Although construction and other permits, as well ch ALUMIL YU INDUSTRY AD exports the company had a good cooperation as the abolition of the tax benefits in the and how much do the specific trade with the state, provincial and local au- industry. At the same time, I have to say agreements Serbia has with some cothorities, Lozinsky says that in the last that in this framework we had good co- untries help in that regard?

12 years of operating in Serbia little has operation with the local authorities in - The fact that in the midst of the econochanged in practice when it comic crisis ALUMIL doubled its mes to the work of the adminiproduction, investing an additiI see the biggest problems in very stration and the tax system. onal six million euros in a new line, indicates that we are satisextensive administrative procedures, fied with our results. ALUMIL ► What determined your deprimarily in obtaining construction and expands its operations every cision to continually invest and expand your facilities in other permits, as well as in the abolition day in Europe, Asia and Africa.

As for the trade agreements Serbia? of the tax incentives for industry Serbia has with some countries, - ALUMIL MILONAS is a comthat is certainly a positive fact. pany that has its own subsidiaries in nearly 30 countries worl- Stara Pazova, as well as the provincial However, I must say that in the implementation of these agreements there are some dwide and, in addition to Greece, it and national administration. limitations and there are many practical has complete production in Albania, Romania and Bosnia-Herzegovina. For ► Which areas of the legislative field difficulties. I hope that these problems us the Serbian market was interesting and the work of public administration will be overcome in the coming period.

However, despite all the difficulties, for several reasons, primarily because should be improved when it comes to we have never regretted investing in Serof the presence of our products on this attracting foreign investment? market since the early ‘90s, but most - We highly value the commitment of bia. We expect that, in tandem with the importantly because of the serious eco- the Government on reform steps so far, stabilisation of the economy in Serbia, nomic environment and well-trained especially in the field of labour legisla- we will further advance our operations human resources. We also found the tion. We impatiently await the new law and investing in Serbia. ■

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2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 65

COMMENT

E-government Key to Reforming Serbia's State Administration ZDRAVKO DRČELIĆ President of the Telecommunications and IT Committee of the Foreign Investors Council (Hewlett Packard d.o.o.)

Regulating technological neutrality at existing frequency bands is a step forward, but until these solutions are implemented in practice, the expected effects of the changes to the law – new investments in mobile broadband and GDP growth on that basis – will not be achieved

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ith the introduction of number portability in fixed networks (FNP) as of 1st April, visible progress was achieved in the field of telecommunications, but the actual process of transferring a number could be faster and more efficient. In addition to this, the adoption of amendments to the Law on Electronic Communications represents a positive shift, introducing technological neutrality in existing frequency bands. Unfortunately, the law has not yet experienced its application in practice, which prevents the rapid development of the market, new investment and faster internet and better coverage for users. We consider that only fast and effective implementation would lead to new investments in the development of mobile broadband, which directly and indirectly contributes to the growth of GDP. Accordingly, we have three recommendations. First, it is necessary to implement technological neutrality for the existing spectrum bands in accordance with EU recommendations, or allow licenses to expire at no extra cost. Secondly, the Government of Serbia should bring a decision on the allocation of the Army in the range of 900 MHZ. And, third, we believe that plans should be announced for the upcoming auction of spectrum, in order for operators to prepare relevant offers in a timely manner.

We also welcome the decision of the Constitutional Court of the Republic of Serbia to repeal, on the grounds of it being an unconstitutional act, the para-fiscal levy introduced by the Law on Cinematography, according to which RATEL was obliged to allocate 10% of annual revenues to the fund for cinematography.

When it comes to the field of ICT, as a generator 6% of the revenue budget of the Republic of Serbia it is one of the country’s most

vital industries. In recent years there have been several positive developments in the Serbian IT sector. Noteworthy examples are the adoption of the Strategy for the Development of Information Society in Serbia until 2020, followed by the introduction of e-government programmes in various state institutions, such as the courts, police and municipal administration, the introduction of the possibility of subscription and payment of VAT via the internet, and Serbia’s membership in the Open Government Partnership (which implies the fulfilling of numerous conditions, such as improving the transparency of public finances, providing adequate data protection, as well as free access to information, etc.). In addition to that, IT regulations received significant new rules with the goal of liberalisation and competitiveness within the sector.

As a result of these developments, in the past year there has been an increase in the number of e-services available to end users.

The E-Government Portal now includes a range of services, while the Tax Administration has taken decisive steps in the implementation and expansion of their IT infrastructure, opening the possibility for electronic tax returns.

As such, it can be concluded that there are many improvements.

The key elements we need to work on are: networking state institutions at the level of IT infrastructure, as well as considering the option of public-private partnerships in the field of IT services, for example in the provision of Cloud services.

Continuous dialogue between all relevant parties (the Ministry, RATEL, RRA, FIC etc.), will certainly help speed up the process of harmonising Serbian legislation with that of the EU, which is one of the most highly placed objectives of the Government of the Republic of Serbia. ■

E-governance is the key to the reform of Serbia’s state administration. It will make the administration more efficient, which in turn will attract more foreign investment

66 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 67

INTERVIEW

Better Quality Dialogue Means Better Legal Solutions ANA FIRTEL Executive Director of the Foreign Investors Council

The quality of dialogue between the state and the FIC developed in parallel with the increase in the number of members and their economic power, as well as their efforts to provide political leaders with suggestions based on their years of experience of working in Serbia and other parts of the world

T

oday it is more of a practice than an exception that, at the initiative of the state, the Foreign Investors Council participates in the dialogue, relays experiences and offers suggestions on legal solutions in the early stages of their development. "Experience shows that, when you have a substantial and lengthy public debate, which includes all relevant stakeholders, the quality of legislation is better and legal enforcement has greater effects, which is the goal of any regulation," says Ana Firtel, Executive Director of the Foreign Investors Council.

► How much does the growing economic power of members and their cumulative experience impact on appreciation for the FIC’s recommendations to the country’s political leadership?

- Economic power of member companies, on the one hand, and their involvement in the FIC and cumulative experience, on the other, have a dominant influence on the weight of the opinions we represent and their acknowledgement.

The data is clear: when it was established, the Council had 14 founding members, while today there are 130. Their share in generating gross domestic product for 2012 was 17.5%, while in 2013 it was even greater, the precise details of which we will publish in the latest White Book we are currently preparing. This gives strength and credibility of our association in talks with the government.

What makes the analysis and recommendations of the FIC specific and relevant in relation to other organisations and institutions that also analyse the investment climate in Serbia?

- There are several things that are, in my opinion, crucial: first, these are recommendations coming from the private sector. Much of the analysis we have done helped, and continues to help, the government in taking steps forward during the formulating of policies. Secondly, we are a business association that brings together companies from all over the world. Blending experience gained here and on other markets helps us, in a situation where Serbia is aspiring to join the EU, to provide some practical suggestions for overcoming the problems faced in the process.

Third, have worked a lot on strengthening the decision-making procedures to ensure that all the views we present reflect the majority view and are not in conflict with the position of any member of the Council. When you have 130 members from various sectors, and competitors within sectors, it is a challenging process that requires you to have a transparent and inclusive decision-making method within the organisation. When we formulate our recommendations we take into account not only the interests of certain companies, but rather the interests of the wider market and the overall economy, because how individual companies operate on the market depends on how the economy operates.

►

We think that an active dialogue between the state and the private sector should become not only the practice, which is the case today, but also an obligation

68 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

EXPERIENCE

INTEREST

PREDICTABILITY

Blending experience gained here and on other markets helps us, in a situation where Serbia is aspiring to join the EU, by providing practical suggestions for overcoming the problems faced in the process.

When we formulate our recommendations we take into account not only the interests of certain companies, but rather the interests of the wider market and the overall economy.

We hope that in future dialogue between the state and the private sector will be stronger, because, unfortunately, even today legal solutions sometimes change overnight, which negatively affects the predictability of doing business.

► In what ways have the priorities and recommendations of the Council changed with regard to changes in Serbia’s overall economic environment and the EU accession process in the previous period?

- When the Council was created in 2002, Serbia was the beginning of the transition and our proposals were focused on building the pillars of a market economy. From 2004 onwards, despite changes of government, a large number of laws were adopted in order to catch up with other countries in the region that were closer to the EU. That was good, but the flip side of that coin was a problem in the application of those laws. Since then we have spent years dealing with the fact that the main problem when it comes to the regulatory framework is law enforcement, lack of capacity and lack of clear procedures, all of which leads to unequal conditions for doing business. If you look at the first and last editions of the White Book, you will see that the most recent edition is twice as thick, because our recommendations have become much more specific and concrete, indicating clearly defined problems in some laws or the way they are applied.

What are the most important changes in the quality of the dialogue between the private sector and the state, and how do you assess the contribution of the FIC in this process?

- Communication and dialogue always existed, but at first it was sporadic, and often initiated by the private sector indicating existing problems. In recent years there have been major changes and now, instead of post factum, when the laws are passed, we have a priori cooperation where the government also initiates the dialogue. We actively participate in the formulation of legislation and are often participants in the working groups established by the state for the formulation of specific legislation or have access to early drafts and give specific comments and suggestions. We hope that in the future that dialogue between the state and the private sector will be even more powerful because, unfortunately, even today some legal solutions change overnight without any consultation, which negatively impacts on the predictability of doing business. We think that an active dialogue between the state

►

and the private sector should become not only the practice, which is the case today, but also an obligation.

► In which ways have the internal organisational structure and functioning of the Council adapted to the needs of new members?

- Internal adjustment of the Council was necessary because the membership expanded, but the principles we stand for as an association – a predictable and sustainable business environment and level playing field for all – have not changed. Over time, in addition to the Assembly and Board of Directors, we gained a larger number of committees dealing with specific problems at an expert level.

When I started working at the FIC in 2007 there were three active committees, while today we have eight, plus an ad hoc working body that has already spent two years dealing with regularity of payments and we are constantly opening new themes.

In addition to the growing number of members, for years we have worked on deepening the involvement of middle management of companies in the Council's work. The practical knowledge of people who work on specific problems, such as taxes, the application of labour regulations, solving problems of illicit trade and other issues we deal with as an association, helps members to have meaningful dialogue and provide the state with the most concrete proposals.

When you don’t have enough time and opportunity to carefully analyse specific legal solutions and give recommendations, that reduces the input you give, which would be of benefit to lawmakers

► In your opinion, how much has the cooperation developed by the FIC with international organisations and other business associations influenced the quality of public debate on improving the business en-

vironment in Serbia?

- It has certainly had an influence because it has improved the flow of information. The mission of the Council is based on a dialogue with the authorities and all relevant stakeholders, thus it is extremely significant that we collaborate with the World Bank, the IMF, the diplomatic corps, the delegation of the European Union, development agencies such as USAID and GIZ and other relevant factors.

In addition, we speak with other business associations, with whom we organise joint initiatives when there is a mutual interest. ■

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 69

KEY MESSAGES

ZORANA MIHAJLOVIĆ

ALEKSANDAR VULIN

JORGOVANKA TABAKOVIĆ

”With the amendments to the Law on Planning and Construction, the construction industry will be fundamentally reformed. I believe that building permits will no longer be among the first remarks mentioned in every conversation with foreign investors.”

„In order to seriously address unemployment we need new investments and we are primarily fighting for them. This ministry is open to all proposals of employers that would make their work easier and accelerate employment.”

„I believe the government will be decisive in the implementation of fiscal consolidation and structural reforms. The NBS is ready to contribute to creating conditions for advancing the market environment by ensuring the stability of prices and the financial system.”

Chairwoman of the FIC Food and Agriculture Committee

Chairman of the FIC Real Estate and Construction Committee

Ph.D., Deputy Prime Minister and Minister of Construction, Transport and Infrastructure

Minister for Labour, Employment, Veterans and Social Issues

FREDERIC COIN

MILICA STEFANOVIĆ

”The Foreign Investors Council fully supports the new measures of the government, but would also like to stress that success in any new reforms depends on how successful the government will be in ensuring implementation from the highest to the lowest instances”.

OVE FREDHEIM

„The Food and Agriculture Committee considers that, through the four-year strategy of subsidies for larger sectors of agricultural production, a permanent and transparent solution should be established that will enable manufacturers to plan their activities”.

”From the standpoint of private investors, it is extremely important that the state takes care of the models of corporate governance in state-owned firms, and ensures transparency in the process of privatising public enterprises. This would contribute to the creation of equal conditions for all market players”.

”The adoption of the new Labour Law should be followed by its consistent application. Only in that way can the state provide a level playing field for all market participants. The FIC believes the changes to this law will make Serbia more competitive for new investments”.

President of the Foreign Investors Council

Vice President of the Foreign Investors Council

SRĐAN LAZOVIĆ

Vice President of the Foreign Investors Council

”The adoption and implementation of regulations that are harmonised with the EU acquis would be a step in the right direction in the creation of a lasting, sustainable and transparent legal framework.

Also closely related to this issue is the enforcement of laws that have been adopted and oversight of their implementation”.

GORAN PEKEZ

Chairman of the FIC Committee for Combating Illicit Trade

”Reducing the grey economy would contribute to the creation of a more favourable business climate, which would consequently attract more foreign investment and give local companies the opportunity for sustainable growth”.

DEJAN JEČMENICA

Chairman of the FIC Human Resources Committee

CRISTOPH LEITNER

Chairman of the FIC Leasing and Insurance Committee

”In order to encourage the participation of leasing in the development of agricultural, the FIC supports the adoption of the amendment to the Law on Incentives in Agriculture and Rural Development, in order for financial leasing to be included in the system of incentives for agriculture”.

RASTKO MALIŠIĆ

Chairman of the FIC Legal Committee

”It is very important when adopting new laws or making major changes to existing regulations to consider the sustainability and urgency of deadlines foreseen for the adoption of bylaws and to coordinate the work of all agencies and institutions that should adopt these regulations”.

70 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

Governor of the National Bank of Serbia

NEBOJŠA NEŠOVANOVIĆ

”The Foreign Investors Council, as well as other business associations, remains adamant that they should abandon the retention of the Institute of conversion fees, which caused serious damage to the construction industry in the previous period”.

BILJANA BUJIĆ

FIC Vice President and Acting Chair of the FIC Tax Committee

”An example of good regulations, which it is now necessary to secure and apply well, are the amendments to the Law on Corporate Gains in the area covering transfer pricing. What now lies ahead is the training of the tax administration, in order to prevent any inappropriate and inconsistent approach in practice”.

ZDRAVKO DRČELIĆ

Chairman of the FIC Telecommunications and Information Technology Committee

„The key elements that should be addressed in the field of e-services are: networking state institutions at the level of IT infrastructure, as well as considering public-private partnership in the field of IT services, for example in providing Cloud services”.

ANA FIRTEL

Executive director of the Foreign Investors Council

”Experience shows that when you have a rich and lengthy public debate that includes various stakeholders, the quality of legislation is better, while enforcement of the law also has greater effects, which is the goal of any regulation.”

D I R E C T O R Y

FOREIGN INVESTORS COUNCIL in Serbia 2014/15

BOARD OF DIRECTORS President of the Board: FREDERIC COIN, Societe Generale Banka Srbija a.d.

Vice President of the Board: OVE FREDHEIM, Telenor d.o.o.

Vice President of the Board: SRĐAN LAZOVIĆ, British American Tobacco SEE d.o.o. Beograd Member of the Board: GABOR BEKEFI, Carlsberg Srbija d.o.o.

Member of the Board: JOHN KYRITSIS, Delhaize Serbia d.o.o.

Member of the Board: SILVIA VERNETTI-BLINA, Fiat automobili Srbija d.o.o.

Member of the Board: DIMITRIJE KNJEGINJIĆ, Lafarge Srbija d.o.o.

Member of the Board: ANSGAR BORNEMANN, Nestlé Adriatic S d.o.o.

Member of the Board: MICHALIS ORFANOUDAKIS, PepsiCo West Balkans

COMMITTEES Anti-Illicit Trade Committee President: GORAN PEKEZ, JT International a.d. Senta Vice President: IRENA SMILJANIĆ, Mondelez d.o.o. Beograd Food & Agriculture Committee President: MILICA STEFANOVIĆ, The Coca-Cola Company (Barlan S&M d.o.o.)

Vice President: DEJAN SIMIĆ, Mondelez d.o.o. Beograd Human Resources Committee President: DEJAN JEČMENICA, Wiener Staedtische osiguranje a.d.o. Beograd Vice President: MIRKO KOVAČ, Karanović & Nikolić Leasing & Insurance Committee President: CHRISTOPH LEITNER, VB Leasing d.o.o. Beograd Vice President: LJUBIŠA VELJKOVIĆ, Wiener Staedtische osiguranje a.d.o. Beograd

Legal Committee President: RASTKO MALIŠIĆ, Marić, Mališić, Dostanić o.a.d.

- correspondent law firm of Gide Loyrette Nouel Vice President: VLADISLAV MARJANOVIĆ, Baklaja & Igric Law Office Real-Estate Committee President: NEBOJŠA NEŠOVANOVIĆ, Jones Lang LaSalle d.o.o.

Vice President: IVAN PETROVIĆ, Janković, Popović & Mitić o.d.

Taxation Committee Vice President and ad interim President: BILJANA BUJIĆ, KPMG d.o.o.

Telecommunications & IT Committee President: ZDRAVKO DRČELIĆ, Hewlett Packard d.o.o.

Vice President: JASMINA VIGNJEVIĆ, Telenor d.o.o.

EXECUTIVE OFFICE ANA FIRTEL, Executive Director; firtela@fic.org.rs MILICA ĐORĐEVIĆ, Communication Officer; milica.djordjevic@fic.org.rs JELENA LAZAREVIĆ, Regulatory Officer; jelena.lazarevic@fic.org.rs Foreign Investors Council, Gospodar Jevremova 47, IV Floor, 11000 Belgrade, Serbia; Phone: 011 3281 958/965; Web: www.fic.org.rs; E-mail: office@fic.org.rs

AIR SERBIA A.D. Bulevar umetnosti 16a, 11070 Beograd Tel: 011 2010 204; Fax: 011 2137 756 E-mail: maja.gedosev@airserbia.com Web: www.airserbia.com Enrolment date: 2014

ATTORNEYS AT LAW SPASIC AND PARTNERS O.D. BELGRADE

AIRPORT CITY BELGRADE Omladinskih brigada 88, 11070 Beograd Tel: 011 3189 516 E-mail: office@airportcitybelgrade.com Web: www.airportcitybelgrade.com Enrolment date: 2005

AXA OSIGURANJE Bulevar Mihajla Pupina 6, 11070 Beograd Tel: 011 2200 400; Fax: 011 2200 401 E-mail: contact@axa.rs Web: www.axa.rs Enrolment date: 2011

ALCATEL LUCENT SERBIA - OGRANAK BEOGRAD Omladinskih brigada 88A, 11070 Beograd Tel: 011 2286 781; Fax: 011 2288 298 E-mail: alu.belgrade@alcatel-lucent.com Web: www.alcatel-lucent.com Enrolment date: 2010

BAKLAJA & IGRIC LAW OFFICE Terazije 8, 11000 Beograd Tel: 011 3038 822; 011 3812 140; Fax: 011 3038 309 E-mail: advokati@baklaja-igric.com Web: www.baklaja-igric.com Enrolment date: 2004

Gospodar Jovanova 73, 11000 Beograd Tel: 011 2633 872; Fax: 011 3283 677 E-mail: office@spasicpartners.com Web: www.spasicpartners.com Enrolment date: 2013

law office Zaštitne boje logotipa Pantone 491 C

Crna 100%

ALPHA BANK SRBIJA A.D. Kralja Milana 11, 11000 Beograd Tel: 0800 250 250; Fax: 011 3243 516 E-mail: gm-office@alphabankserbia.com Web: www.alphabankserbia.com Enrolment date: 2006 72 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

BALL PACKAGING EUROPE BELGRADE LTD. Batajnički drum 21A, 11080 Zemun - Beograd Tel: 011 3770 600 Fax: 011 3770 752 Web: www.ball-europe.com Enrolment date: 2004

BANCA INTESA A.D. BEOGRAD Milentija Popovića 7b, 11070 Beograd Tel: 011 3108 888 E-mail: kabinet@bancaintesa.rs Web: www.bancaintesa.rs Enrolment date: 2004

DANUBE FOODS D.O.O. Batajnički drum 10 deo 1b, 11000 Beograd Tel.: 011 2222 500 Fax: 011 2222 533 E-mail: office@salford.rs Enrolment date: 2011

BASF SRBIJA D.O.O. Omladinskih brigada 90B, 11070 Beograd Tel: 011 3093 403 Fax: 011 3093 423 Web: www.basf.rs Enrolment date: 2009

DDOR NOVI SAD A.D.O Bulevar Mihajla Pupina 8, 21000 Novi Sad Tel: 021 4886 141; Fax: 021 4720 675 E-mail: kabinet@ddor.co.rs Web: www.ddor.co.rs Enrolment date: 2012

BAYER D.O.O. Omladinskih brigada 88b, 11070 Beograd Tel: 011 2070 251 Fax: 011 2070 261 Web: www.bayer.rs Enrolment date: 2009

DELHAIZE SERBIA D.O.O. Jurija Gagarina 14, 11070 Novi Beograd Tel: 011 7153 400; Fax: 011 7153 900 E-mail: office@delhaize.rs Web: www.maxi.rs; www.delhaizegroup.com Enrolment date: 2011

BDK ADVOKATI/ATTORNEYS AT LAW Dobračina 38, 11000 Beograd Tel.: 011 3284 212; Fax: 011 3284 213 E-mail: office@bdklegal.com Web: www.bdklegal.com Enrolment date: 2011

DELOITTE D.O.O. Terazije 8, 11000 Beograd Tel: 011 3812 100; Fax : 011 3812 112 E-mail: ceyuinfo@deloittece.com Web: www.deloitte.com/rs Enrolment date: 2003

BOJOVIC & PARTNERS A.O.D. BEOGRAD Čika Ljubina 16/II, 11000 Beograd Tel: 011 7850 336; Fax: 011 7850 337 E-mail: office@bojovicpartners.com Web: www.bojovicpartners.com Enrolment date: 2013

DELTA HOLDING Milentija Popovića 7b, 11070 Beograd Tel: 011 2011 144; Fax: 011 2011 111 E-Mail: office@deltaholding.rs Web: www.deltaholding.rs Enrolment date: 2014

BPI D.O.O. Imotska 1, 11000 Beograd Venac Radomira Putnika 1, 25000 Sombor Tel: 025 451 800; Fax: 025 451 800 Web: www.bpi-holding.com Enrolment date: 2010

DEUTSCH-SERBISCHE WIRTSCHAFTSVEREINIGUNG (DSW) Topličin venac 19-21, 11000 Beograd Tel: 011 2028 010; Fax: 011 3034 780 E-mail: dsw@ahk.rs Web: www.serbien.ahk.de/rs; www.serbien.ahk.de Enrolment date: 2014

BRITISH AMERICAN TOBACCO SOUTH-EAST EUROPE D.O.O. BEOGRAD Bulevar Mihajla Pupina 165g, 11070 Beograd Tel: 011 3108 700 Web: www.bat.com Enrolment date: 2002, Founder

DHL INTERNATIONAL BEOGRAD D.O.O. Jurija Gagarina 36 V, 11070 Beograd Tel: 011 3105 500 E-mail: info-rs@dhl.com Web: www.dhl.rs Enrolment date: 2002

CARLSBERG SRBIJA D.O.O. Proleterska 17, 21413 Čelarevo Tel: 021 7550 600; Fax: 021 7550 658 E-mail: info@carlsberg.rs Web: www.carlsbergsrbija.rs Enrolment date: 2005

DIRECT GROUP DOO BEOGRAD Autoput za Novi Sad 96, 11080 Beograd Tel: 011 3532 900; Fax: 011 3532 908 E-mail: office@direct-group.com Web: www.direct-group.com Enrolment date: 2013

COCA-COLA HBC - SRBIJA D.O.O. Batajnički drum 14-16, 11080 Beograd Tel: 011 3073 100 Fax: 011 3073 199 Web: www.coca-colahellenic.com Enrolment date: 2002

DUPONT SRB D.O.O. Omladinskih brigada 88, 11070 Beograd Tel: 011 2090 580 Fax: 011 2090 598 Web: www.rs.ag.dupont.com Enrolment date: 2009

CREDIT AGRICOLE SRBIJA A.D. NOVI SAD Braće Ribnikar 4-6, 21000 Novi Sad Tel: 021 4876 876; Fax: 021 4876 976 E-mail: info@creditagricole.rs Web: www.creditagricole.rs Enrolment date: 2006

ECOLAB HYGIENE D.O.O. Milana Tankosića 8, 11000 Beograd Tel: 011 2076 800; Fax: 011 2076 802 E-mail: office.belgrade@ecolab.com Web: www.ecolab.rs Enrolment date: 2008

CROWE HORWATH BDM DOO Terazije 5/4, 11000 Beograd Tel: 011 6558 500; Fax: 011 6558 501 E-mail: office@crowehorwath.rs Web: www.crowehorwath.rs Enrolment date: 2012

EKO SERBIA A.D. Member of Hellenic Petroleum group Tošin bunar 274a, 11070 Novi Beograd Tel: 011 2061 500; Fax: 011 2061 555 E-mail: administracija@hellenic-petroleum.rs Web: www.ekoserbia.com Enrolment date: 2004

2014/15 FOREIGN INVESTORS COUNCIL IN SERBIA 73

ERNST & YOUNG D.O.O. BEOGRAD Španskih boraca 3, "Blue Center", 11070 Beograd Tel: 011 2095 800 E-mail: ey.office@rs.ey.com Web: www.ey.com/rs Enrolment date: 2004

GTC INTERNATIONAL DEVELOPMENTS ILC BELGRADE Bulevar Zorana Đinđića 64a, 11070 Beograd Tel: 011 3130 751; Fax: 011 3130 752 E-mail: office@gtcserbia.com Web: www.gtcserbia.com; www.gtc.com.pl Enrolment date: 2014

ERSTE BANK A.D. NOVI SAD Bulevar oslobođenja 5, 21000 Novi Sad Tel: 0800 201 201; 060 7979 000; E-mail: info@erstebank.rs Erste Poslovni centar - Milutina Milankovića 11b 11000 Beograd, Tel: 0800 201 201; 060 7979 000 Web: www.erstebank.rs; Enrolment date: 2005

HARRISONS Bulevar Mihajla Pupina 6, PC Ušće, 11070 Beograd Tel: 011 3129 825; Fax: 011 3129 823 E-mail: office@harrison-solicitors.com Web: www.harrison-solicitors.com Enrolment date: 2004

ERSTE GROUP IMMORENT SERBIA D.O.O. Milutina Milankovića 11a, 11070 Beograd Tel: 011 2287 480; Fax: 011 2287 482 E-mail: office.rs@immorent.com Web: www.erstegroupimmorent.rs Enrolment date: 2008

HAUZMAJSTOR D.O.O. Dunavska 57a, 11000 Beograd Tel: 011 3034 034; Fax: 011 2070 995 E-mail: office@hauzmajstor.rs Web: www.hauzmajstor.rs Enrolment date: 2008

EUROBANK A.D. BEOGRAD Vuka Karadžića 10, 11000 Beograd Tel: 011 3082 860; Fax: 011 3376 807 E-mail: office@eurobank.rs Web: www.eurobank.rs Enrolment date: 2003

HEINEKEN SRBIJA DOO Omladinskih brigada 90b, 11070 Beograd Tel: 011 3538 600; Fax: 011 3538 691 E-mail: info.serbia@heineken.com Web: www.heinekeninternational.com Enrolment date: 2003

FIAT AUTOMOBILI SRBIJA D.O.O. Kosovska 4, 34000 Kragujevac Tel: 034 502 622; 011 3030 906 Fax: 034 323 000; 011 3030 914 Web: www.fiatsrbija.rs; www.fiat.com Enrolment date: 2011

HEMOFARM A.D. Beogradski put bb, 26300 Vršac Tel: 013 803 500; Fax: 013 831 503 E-mail: svakodobro@hemofarm.com Web: www.hemofarm.rs Enrolment date: 2013

FINDOMESTIC BNP PARIBAS GROUP Bulevar Mihajla Pupina 115a, 11000 Beograd Tel: 011 3331 733; Fax: 011 3331 766 E-mail: office@findomestic.rs Web: www.findomestic.rs Enrolment date: 2012

HENKEL SRBIJA D.O.O. Bulevar oslobođenja 383, 11040 Beograd Tel: 011 2072 200 Fax: 011 2072 294 Web: www.henkel.rs Enrolment date: 2004

FRESENIUS MEDICAL CARE SRBIJA D.O.O. Beogradski put bb, 26300 Vršac Tel: 011 3951 000; Fax: 011 3951 090 E-mail: vera.trunic@fmc-ag.com Web: www.fmc-ag.com Enrolment date: 2013

HEWLETT PACKARD D.O.O. Omladinskih brigada 90B, 11070 Beograd Tel: 011 2055 800 Fax: 011 2055 936 Web: www.hp.rs Enrolment date: 2005

G4S SECURE SOLUTIONS D.O.O. Viline Vode 6, 11000 Beograd Tel: 011 2097 900; Fax: 011 2097 914 E-mail: direkcija@rs.g4s.com Web: www.g4s.rs Enrolment date: 2009

HINTTECH D.O.O. Mornarska 7, 21000 Novi Sad Tel: 021 6301 548; Fax: 021 6392 826 E-mail: serbia@hinttech.com Web: www.hinttech.com Enrolment date: 2010

GEBRÜDER WEISS TRANSPORT AND LOGISTICS D.O.O. Beogradska bb, 11272 Dobanovci Tel: 011 3715 200; Fax: 011 3715 201 E-mail: office.beograd@gw-world.com Web: www.gw-world.rs; www.gw-world.com Enrolment date: 2014

HUAWEI TECHNOLOGIES D.O.O. Vladimira Popovića 38/V, 11070 Beograd Tel: 011 2209 607; Fax: 011 2209 607 E-mail: office.serbia@huawei.com Web: www.huawei.com Enrolment date: 2010

GRAND CASINO BEOGRAD Bulevar Nikole Tesle 3, 11080 Beograd Tel: 011 2202 800; Fax: 011 2202 810 E-mail: info@grandcasinobeograd.com Web: www.grandcasinobeograd.com Enrolment date: 2008

HYATT REGENCY BELGRADE Milentija Popovića 5, PO Box 07,11070 Beograd Tel: 011 3011 234; Fax: 011 3112 330 E-mail: belgrade.regency@hyatt.com Web: www.belgrade.regency.hyatt.com Enrolment date: 2002, Founder

GRUNDFOS SRBIJA D.O.O. Obilazni put Sever 21, 22320 Inđija Tel: 022 367 300 Fax: 022 367 302 Web: www.grundfos.rs; www.grundfos.com Enrolment date: 2013

HYPO ALPE-ADRIA-BANK A.D. BEOGRAD Bulevar Mihajla Pupina 6, 11070 Beograd Tel: 011 2226 000; Fax: 011 2226 555 E-mail: office@hypo-alpe-adria.rs Web: www.hypo-alpe-adria.rs Enrolment date: 2002

74 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

HYPO ALPE-ADRIA-LEASING D.O.O. BEOGRAD Bulevar Mihajla Pupina 115g 11070 Beograd; Tel: 011 2227 000; Fax: 011 2227 099 E-mail: leasing.belgrade@hypo-alpe-adria.rs Web: www.hypo-alpe-adria.rs Enrolment date: 2003

KOMERCIJALNA BANKA A.D. Svetog Save 14, 11000 Beograd Tel: 011 3080 100; Fax: 011 3440 033 E-mail: posta@kombank.com Web: www.kombank.com Enrolment date: 2008

IB INTERBILANZ CONSULTING D.O.O. Bulevar Milutina Milankovića 136a, 11070 Beograd Tel: 011 6557 043; Fax: 011 6693 999 E-Mail: office@ibgroup.rs Web: www.ibgroup.at Enrolment date: 2014

KPMG D.O.O. Kraljice Natalije 11, 11000 Beograd Tel: 011 2050 500; Fax: 011 2050 550 E-mail: info@kpmg.rs Web: www.kpmg.rs Enrolment date: 2002

IKEA SRBIJA D.O.O. Autoput 22 11070 Beograd Tel: 011 2098 802 Web: www.ikea.com Enrolment date: 2008

LAFARGE BFC D.O.O. Trg BFC 1, 21300 Beočin Tel: 021 874 102; 011 6556 120; Fax: 021 874 143 E-mail: lbfc.office@bfc.lafarge.com Web: www.lafarge.rs; www.lafarge.com Enrolment date: 2002

INTERALLIS CHEMICALS Neznanog junaka 27a, 11040 Beograd Tel: 011 3679 230; Fax: 011 3679 231 E-mail: serbia@interallis.com Web: www.interallis.com Enrolment date: 2005

LES LABORATOIRES SERVIER Bulevar Mihajla Pupina 165v, 11070 Beograd Tel: 011 2225 060; Fax: 011 2225 067 E-mail: info@rs.mailgrs.com Web: www.servier.rs Enrolment date: 2014

INTESA LEASING D.O.O. BEOGRAD Cara Uroša 54, 11000 Beograd Tel: 011 2025 400; Fax: 011 2025 433 E-mail: ilbhead@intesaleasing.rs Web: www.intesaleasing.rs Enrolment date: 2010

LUKOIL SRBIJA AD Bulevar Mihajla Pupina 165d, 11070 Beograd Tel: 011 2220 200 Fax: 011 2220 294 Web: www.lukoil.rs Enrolment date: 2009

JANKOVIĆ, POPOVIĆ & MITIĆ O.D. Vladimira Popovića 6, NBGP Apt. 11070 Beograd Tel: 011 2076 850; Fax: 011 2076 899 E-mail: office@jpm.rs Web: www.jpm.rs Enrolment date: 2009

L‘ORÉAL BALKAN D.O.O. Bulevar Zorana Đinđića 64a, 11070 Beograd Tel: 011 2205 900 Fax: 011 2205 901 Web: www.loreal.com Enrolment date: 2004

JONES LANG LASALLE D.O.O. Danube Business Center, Bulevar Mihajla Pupina 10 L 11070 Beograd; Tel: 011 7850 600; Fax: 011 7850 597 E-mail: belgrade@eu.jll.com Web: www.joneslanglasalle.rs Enrolment date: 2008

MACE D.O.O. Bulevar Mihajla Pupina 6, 11070 Beograd Tel: 011 2200 250; Fax: 011 2200 265 E-mail: serbia.office@macegroup.com Web: www.mace.co.rs; www.macegroup.com Enrolment date: 2010

JT INTERNATIONAL A.D. SENTA Subotički drum 17, 24400 Senta Tel: 011 2050 300 Fax: 011 2050 301 Web: www.jti.com Enrolment date: 2003

MARBO PRODUCT D.O.O, A COMPANY OF PEPSICO

KAPSCH D.O.O. Sava Business Center, Milentija Popovića 5B, 11070 Beograd Tel: 060 0730 303; Fax: 011 2282 679 E-mail: kapsch.srb@kapsch.net Web: www.kapsch.net; www.kapsch.rs Enrolment date: 2009

MARIC, MALISIC & DOSTANIC O.A.D. CORRESPONDENT LAW FIRM OF GIDE LOYRETTE NOUEL Resavska 32/4, 11000 Beograd; Tel: 011 3024 900; Fax: 011 3024 910; E-mail: office@mmd-associates.com Web: www.gide.com; www.mmd-associates.com Enrolment date: 2005

KARANOVIC & NIKOLIC Resavska 23, 11000 Beograd Tel: 011 3094 200; Fax: 011 3094 223 E-mail: knserbia@karanovic-nikolic.com Web: www.karanovic-nikolic.com Enrolment date: 2003

MERCK D.O.O. Omladinskih brigada 90v, 11070 Beograd Tel: 011 2175 761; Fax: 011 2176 781 E-mail: merck@merck.rs Web: www.merck.rs; www.merck.de Enrolment date: 2014

KNAUF INSULATION D.O.O. Batajnički drum 16b, 11080 Beograd Tel: 011 3310 800; Fax: 011 3310 801 E-mail: office.belgrade@knaufinsulation.com Web: www.knaufinsulation.rs; www.knaufinsulation.com Enrolment date: 2011

MERKUR OSIGURANJE A.D.O Bulevar Mihajla Pupina 6/22, 11070 Beograd Tel: 011 2201 250; Fax: 011 2201 251 E-mail: office@merkur.rs Web: www.merkur.rs Enrolment date: 2011

Đorđa Stanojevića 14, 11070 Beograd; Tel: 011 3637 000; Fax: 011 3637 069; E-mail: belgrade.office@pepsico.com Web: www.pepsico.com www.facebook.com/PepsiCoSrbijaOfficial; twitter.com/PepsiCoSrbija Enrolment date: 2009

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MESSER TEHNOGAS KRAFT FOODS D.O.O.A.D. Banjički put 62, 1100088b/III, Beograd Omladinskih brigada 11070 Beograd Tel: 011 200;800 Fax: 011 3537 291 +3813537 11 3530 E-mail: postoffice@messer.rs Fax: +381 11 3133 788 Web: www.messer.rs www.kraftfoodscompany.com Enrolment date: 2002, 2010 Founder

PERNOD RICARD SERBIA Bulevar oslobođenja 211, 11000 Beograd Tel: 011 3975 246 Fax: 011 3974 380 Web: www.pernodricard.com Enrolment date: 2003

METRO CASH & CARRY Autoput za Novi Sad 120, 11080 Beograd Tel: 011 3777 208; Fax: 011 3777 539 E-mail: pr@metro.rs Web: www.metro.rs Enrolment date: 2003

PETRIKIĆ & PARTNERI AOD IN COOPERATION WITH CMS REICH-ROHRWIG HEINZ Cincar Jankova 3, 11000 Beograd Tel: 011 3208 900; Fax: 011 3038 930 E-mail: belgrade@cms-rrh.com; Web: www.cms-rrh.com Enrolment date: 2004

METROPOL PALACE D.O.O. Bulevar Kralja Aleksandra 69, 11000 Beograd Tel: 011 3333 100; Fax: 011 3333 300 E-mail: office@metropolpalace.com Web: www.metropolpalace.com Enrolment date: 2012

PHILIP MORRIS SERVICES D.O.O. BEOGRAD Bulevar Zorana Đinđića 64a, 11070 Beograd Tel: 011 2010 800 Fax: 011 2010 824 Web: www.philipmorrisinternational.com Enrolment date: 2004

MINI PANI D.O.O. Hipodromska bb, 24107 Subotica Tel: 024 621 521; Fax: 024 621 522 E-mail: kontakt@minipani.com Web: www.minipani.com Enrolment date: 2012

PIRAEUS BANK A.D. BEOGRAD Milentija Popovića 5b, 11070 Beograd Tel: 011 3024 000; Fax: 011 3024 400 E-mail: banka@piraeusbank.rs Web: www.piraeusbank.rs Enrolment date: 2006

MONDELEZ D.O.O. BEOGRAD Omladinskih brigada 88b/III, 11070 Beograd Tel: 011 3530 800 Fax: 011 3133 788 Web: www.mondelezinternational.com Enrolment date: 2010

PIRAEUS LEASING D.O.O. Milentija Popovića 5b, 11170 Beograd Tel: 011 2228 600; Fax: 011 2228 601 E-mail: office@piraeusleasing.rs Web: www.piraeusleasing.rs Enrolment date: 2010

NBG LEASING D.O.O. Airport City, Omladinskih brigada 88, 11070 Beograd Tel: 011 2287 982; 2288 071; 2288 074; 2288 079; Fax: 011 2287 984; E-mail: office@nbgleasing.co.rs Web: www.nbgleasing.rs Enrolment date: 2004

PRICEWATERHOUSECOOPERS D.O.O. Airport City Belgrade, Omladinskih brigada 88a 11070 Beograd Tel: 011 3302 100; Fax: 011 3302 101 Web: www.pwc.rs Enrolment date: 2002, Founder

NESTLÉ ADRIATIC S D.O.O. Železnička 131, 11271 Beograd-Surčin Tel: 011 2019 301; Fax: 011 3132 022 E-mail: info@rs.nestle.com Web: www.nestle.rs Enrolment date: 2002, Founder

PRISTOP Bulevar Milutina Milankovića 136, ulaz A / I 11070 Beograd Tel: 011 7151 764; Fax: 011 7151 740 E-mail: office@pristop.rs; Web: www.pristop.rs Enrolment date: 2010

NIS A.D. NOVI SAD (NAFTNA INDUSTRIJA SRBIJE) Narodnog fronta 12, 21000 Novi Sad Tel.: 021 4811 111; Fax: 021 4813 037 E-mail: office@nis.eu Web: www.nis.rs Enrolment date: 2011

PROCREDIT BANK Milutina Milankovića 17, 11000 Beograd Tel: 011 2077 906; Fax: 011 2077 905 E-mail: info@procreditbank.rs Web: www.procreditbank.rs Enrolment date: 2004

NOKIA SOLUTIONS AND NETWORKS SERBIA D.O.O. BEOGRAD Đorđa Stanojevića 14, 11070 Beograd Belgrade Office Park, Building II, Gallery Floor Tel: 011 3070 123; 3070 111; Fax: 011 3070 167 Web: www.nsn.com; Enrolment date: 2009

RAIFFEISEN BANKA A.D. BEOGRAD Đorđa Stanojevića 16, 11070 Beograd Tel: 011 3202 100 E-mail: info@raiffeisenbank.rs Web: www.raiffeisenbank.rs Enrolment date: 2002

ORION TELEKOM D.O.O. Gandijeva 76a, 11070 Beograd Tel: 011 2228 333; Fax: 011 2228 336 E-mail: office@oriontelekom.rs Web: www.oriontelekom.rs Enrolment date: 2010

RAIFFEISEN LEASING D.O.O. Đorđa Stanojevića 16, 11070 Beograd Tel: 011 2207 400; Fax: 011 2289 007 E-mail: info.leasing@raiffeisen-leasing.rs Web: www.raiffeisen-leasing.rs Enrolment date: 2003

PATRIMONS D.O.O. Sterijina 7, 11000 Beograd Tel: 011 2772 729; Fax: 011 2781 829 E-mail: office@patrimons.com Web: www.patrimons.rs Enrolment date: 2008

RAUCH SERBIA D.O.O. Baja Pivljanina 13, 11000 Beograd Tel: 011 2652 225; Fax: 011 2652 298 E-mail: office.serbia@rauch.cc Web: www.rauch.cc Enrolment date: 2011

76 FOREIGN INVESTORS COUNCIL IN SERBIA 2014/15

RINGIER AXEL SPRINGER D.O.O. Žorža Klemansoa 19, 11000 Beograd Tel: 011 3334 701; Fax: 011 3334 703 E-mail: komunikacije@ringieraxelspringer.rs Web: www.ringieraxelspringer.rs www.ringieraxelspringer.com; Enrolment date: 2014

SOCIETE GENERALE BANKA SRBIJA A.D. BEOGRAD, CLOSED JOINT STOCK COMPANY

RIO TINTO RIO SAVA EXPLORATION D.O.O. Takovska 45/IV, 11000 Beograd Tel: 011 2761 477; Fax: 011 2752 376 Web: www.riotinto.com; www.riotintoserbia.com Enrolment date: 2004

SOGELEASE SRBIJA D.O.O. Bulevar Zorana Đinđića 48B, 11070 Beograd Tel: 011 2221 369; Fax: 011 2221 388 E-mail: sogelease.srbija@socgen.com Web: www.sogelease.rs Enrolment date: 2011

ROBNE KUĆE BEOGRAD D.O.O. Makenzijeva 57, 11000 Beograd Tel: 011 3206 540; Fax: 011 3206 550 E-mail: office@rkbeograd.rs Web: www.rkbeograd.rs Enrolment date: 2010

STAR IMPORT D.O.O. Omladinskih brigada 33, 11070 Beograd Tel: 011 3019 001; Fax: 011 3019 036 E-mail: informacije@starimport.rs Web: www.mercedes-benz.rs Enrolment date: 2002, Founder

ROCHE D.O.O. Milutina Milankovića 11a, 11070 Beograd Tel: 011 2022 803; Fax: 011 2022 808 E-mail: serbia.office@roche.com Web: www.rochesrbija.rs; www.roche.com Enrolment date: 2013

STMG CONSULTANCY D.O.O. BEOGRAD Bulevar Zorana Đinđića 144v, 11070 Beograd Tel: 011 3535 400; Fax: 011 3535 401 E-mail: sasa.trajkovic@stmgconsultancy.com Web: www.stmgconsultancy.com Enrolment date: 2006

S & T SERBIA D.O.O. Đorđa Stanojevića 14/III, 11070 Beograd Tel: 011 3116 221; Fax: 011 3117 665 E-mail: info@snt.rs Web: www.snt.rs Enrolment date: 2003

STRAUSS ADRIATIC D.O.O. Miloša Obilića 41, 22310 Šimanovci Tel: 022 408 000; Fax: 022 408 067 E-mail: info@strauss-group.rs Web: www.strauss-group.rs; www.strauss-group.com Enrolment date: 2013

S-LEASING D.O.O. Bulevar Milutina Milankovića 11a/IV, 11070 Beograd Tel: 011 2010 700; 2010 701; Fax: 011 2010 702 E-mail: office@s-leasing.rs Web: www.s-leasing.rs Enrolment date: 2003

SYNGENTA AGRO D.O.O. Sava Business Center Milentija Popovića 5a, 11070 Beograd Tel: 011 3129 981; 3129 982; Fax: 011 3129 980 Web: www.syngenta.rs; www.syngenta.com Enrolment date: 2009

SBB SERBIAN BROADBAND Bulevar Zorana Đinđića 8a, 11000 Beograd Tel: 011 3305 252 E-mail: info@sbb.co.rs Web: www.sbb.rs Enrolment date: 2004

TELEKOM SRBIJA A.D. Takovska 2, 11000 Beograd Tel: 011 3337 171; Mob: 064 789 E-mail: prsektor@telekom.rs Web: www.telekom.rs Enrolment date: 2007

SBERBANK SRBIJA A.D. BEOGRAD Bulevar Mihajla Pupina 165g, 11070 Beograd Tel: 0700 700 800; 011 2257 498; Fax: 011 2013 270 E-mail: info@sberbank.rs Web: www.sberbank.rs Enrolment date: 2004

TELENOR D.O.O. Omladinskih brigada 90 11070 Beograd Mob: 063 9000 Web: www.telenor.rs Enrolment date: 2006

SCHNEIDER ELECTRIC SRBIJA D.O.O Vladimira Popovića 38-40, 11070 Beograd Tel: 011 3773 100 E-mail: podrska.klijentima@schneider-electric.com Web: www.schneider-electric.com Enrolment date: 2012

TETRA PAK PRODUCTION Milutina Milankovića 11b, 11070 Beograd Tel: 011 2017 361 Fax: 011 2017 380 Web: www.tetrapak.rs Enrolment date: 2002,Founder

SIEMENS D.O.O. BEOGRAD Omladinskih brigada 21, 11070 Beograd Tel: 011 2096 305; Fax: 011 2096 061 E-mail: office.rs@siemens.com Web: www.siemens.rs Enrolment date: 2002, Founder

THE COCA-COLA COMPANY (BARLAN S&M D.O.O.) Batajnički drum 14-16, 11080 Beograd Tel: 011 3081 100; Fax: 011 3081 166 E-mail: obelgrade@eur.ko.com Web: www.thecoca-colacompany.com Enrolment date: 2002

SLADARA MALTINEX D.O.O. Industrijska zona b.b., 21400 Bačka Palanka Tel: 021 752 910 Fax: 021 6042 399 Web: www.soufflet.com Enrolment date: 2004

THE INTERNATIONAL SCHOOL OF BELGRADE Temišvarska 19, 11000 Beograd Tel: 011 2069 999; Fax: 011 2069 944 E-Mail: isb@isb.rs Web: www.isb.rs Enrolment date: 2014

Bulevar Zorana Đinđića 50 a/b, 11070 Beograd; Tel: 011 3011 400; 011 2221 200; Fax: 011 3132 885; E-mail: Retail banking - stanovnistvo. sgs@socgen.com; Corporate clients - privreda.sgs@socgen.com; Web: www.societegenerale.rs; Enrolment date: 2002, Founder

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TIGAR TYRES D.O.O. PIROT PREDUZECE ZA PROIZVODNJU GUMA Nikola Pašić 213, 18300 Pirot Tel: 010 2157 000; Fax: 010 2157 010 Web: www.michelin.rs Enrolment date: 2009

VIP MOBILE D.O.O. Omladinskih brigada 21, 11070 Beograd Tel: 060 1234; Fax: 011 2253 334 E-mail: komunikacije@vipmobile.rs Web: www.vipmobile.rs Enrolment date: 2007

TITAN CEMENTARA KOSJERIĆ D.O.O. Živojina Mišića b.b., 31260 Kosjerić Tel: 031 590 300 Fax: 031 590 398 Web: www.titan.rs Enrolment date: 2004

VOJVOĐANSKA BANKA A.D. NOVI SAD Member of NBG Group Trg Slobode 5-7, 21000 Novi Sad Tel: 021 4886 600; Fax: 021 6624 859 E-mail: kabinet@voban.groupnbg.com Web: www.voban.co.rs; Enrolment date: 2003

UNICREDIT BANK SERBIA JSC Rajićeva 27-29, 11000 Beograd Tel: 011 3777 888; Fax: 011 3342 200 E-mail: office@unicreditgroup.rs Web: www.unicreditbank.rs Enrolment date: 2013

WIENER RE AKCIONARSKO DRUŠTVO ZA REOSIGURANJE BEOGRAD Trešnjinog cveta 1, 11070 Beograd Tel: 011 2209 960; Fax: 011 2251 711 E-Mail: wienerre@wiener.co.rs; Web: www.wienerre.rs www.vig-re.com; Enrolment date: 2014

UNIQA NEŽIVOTNO OSIGURANJE ADO Milutina Milankovića 134G, 11070 Beograd Tel: 011 2024 100 E-mail: info@uniqa.rs Web: www.uniqa.rs Enrolment date: 2006

WIENER STAEDTISCHE OSIGURANJE A.D.O. BEOGRAD Trešnjinog cveta 1, 11070 Beograd Tel: 011 2209 901;Fax: 011 2209 900 E-mail: office@wiener.co.rs; Web: www.wiener.co.rs Enrolment date: 2003

VB LEASING D.O.O. BEOGRAD Đorđa Stanojevića 12, 11070 Beograd Tel: 011 2016 500; Fax: 011 2016 567 E-mail: office@vbleasing.rs Web: www.vbleasing.rs Enrolment date: 2011

WOLF THEISS IN COOPERATION WITH LAW OFFICE MIROSLAV STOJANOVIC Poslovni centar Ušće, Bulevar Mihajla Pupina 6 11070 Beograd; Tel: 011 3302 900; Fax: 011 3302 925 E-mail: beograd@wolftheiss.com Web: www.wolftheiss.com; Enrolment date: 2003

VICTORIA GROUP A.D. Bulevar Mihajla Pupina 115b, 11070 Beograd Tel: 011 3532 700; Fax: 011 3532 728 E-mail: office@victoriagroup.rs Web: www.victoriagroup.rs Enrolment date: 2013

ZIVKOVIC SAMARDZIC A.O.D. BEOGRAD Makedonska 30, 11000 Beograd Tel: 011 2636 636; Fax: 011 2635 555 E-mail: office@zslaw.rs Web: www.zslaw.rs Enrolment date: 2011

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