Free-Trade Zone Act

Free-Trade Zone Organization and Management in Serbia

Free-Trade Zone is a part of the territory of the Republic of Serbia, which is specially fenced-in and marked and in which business is conducted under the conditions provided by the Free-Trade Zone Act (“Off. Herald of RS”, No. 62/2006).

Free-Trade Zone Organization and Management

Management

A free-trade zone is managed by a free-trade zone management company registered for free-trade zone-management.

A free-trade zone may be managed by only one free-trade zone management company.

The free-trade zone-management company sets the organizational and technical requirements for the conduct of business in the free-trade zone by the special bylaw. The bylaw regulates the free-trade zone working hours, movement of persons and goods in the free-trade zone, zone-management company’s commitments in connection with securing the space-related, technical and organizational requirements for the use of the free-trade zone, occupational safety and environmental protection measures, free-trade zone users’ rights and duties in relation to the zone founder, etc.

The free-trade zone management company is obliged to forward the bylaw to the Free Zone Authority for consent as well as to concludes the contracts with free-trade zone users on mutual rights and duties, which contain the elements stipulated in the bylaw.

A free-trade zone-management company is obliged to submit a free-trade zone operating report to the Free-Trade Zone Authority within 90 days from the expiry of the calendar year.

A free-trade zone operating report includes the following:

  • Income earned by the free-trade zone management company
  • Number of users and their lines of business
  • Total value of the goods produced and services rendered in the free-trade zone
  • Total volume of import in and export from the free-trade zone
  • Amount of foreign investments
  • Number of employees of the free-trade zone management company and number of the users’ employees.

The minister responsible for finances prescribes the shape and contents of the free-trade zone operating reports and presents to the Government once a year the operating report covering all free-trade zones existing in Serbia, with proposal for measures.

If it finds that the business operations in the free-trade zone fail to achieve the aims laid down in the feasibility study for setting the free-trade zone’s locality, if the free-trade zone management company commits a misdemeanor defined in Article 34 of the Free-Trade Zone Act, as well as if determines that the free-trade zone management company has not taken measures to terminate the contract with a free-trade zone user who is not abiding by the free-trade zone operating conditions or who has committed a misdemeanor defined in Article 35 of the Free-Trade Zone Act or some of the misdemeanors provided by the law governing the customs system and customs procedure, the ministry responsible for finances may recommend the Government to withdraw the consent for setting of the free-trade zone’s locality.

Users

The users of a free-trade zone may be its founder, a free-trade zone management company, as well as other domestic and foreign legal and natural persons.

The users conduct their business in the free-trade zone in compliance with regulations, on the basis of a contract whereby the mutual rights and duties with the zone-management company are stipulated.

The users are obliged:

  • to keep books of account relating to their business in the free-trade zone or separate books of account relating to the part of their business conducted in the free-trade zone
  • to present to the Free-Trade Zone Authority information on their business operations at the request of it.

Organization

A free-trade zone must be fenced-in and clearly marked and labeled as a free-trade zone, at the entrances and exits from the free-trade zone, as well as on the riverside.

A free-trade zone may consist of several parts, on condition that they make up a functional entirety.

A free-trade zone or a part thereof, if it consists of several parts, must be fenced-in, marked and organized so that the circulation of goods and persons into the free-trade zone and out of it may only go through certain free-trade zone entrances or exits. The fence, entrances and exits must be set up properly, secured and illuminated at night.

The free-trade zone management company must provide work premises for the customs service. The customs surveillance and control measures are applied to the goods brought in or taken out of a free-trade zone, as well as to the goods stored in the free-trade zone, in conformity with the provisions of the law governing the customs system and customs procedure.

Free-Trade Zone Start of Operation

The minister responsible for finances determines whether the requirements for the start of free-trade zone’s operation are fulfilled, at the recommendation of a committee he forms from the ranks of representatives of the competent authorities. The committee establishes whether the requirements relating to space and power supply, environmental protection and other technical matters of importance for operation of the free-trade zone, as well as the conditions in terms of performance of customs surveillance measures, have been satisfied.

The minister responsible for finances renders a decision within 30 days from the day of receipt of the commission’s recommendation. The law governing the general administrative proceedings applies to the decision-making procedure.

The day of rendering of the decision is regarded as the day of the start of free-trade zone’s operation.

Business Operation in s Free-Trade Zone

Conducting a Business in a Free-Trade Zone

A user may, in conformity with the Free-Trade Zone Act and a contract with the free-trade zone management company, engage in production and provision of services in the free-trade zone, in accordance with regulations. The environment, health of people, material goods and national security may not be endangered by conducting a business and providing services in a free-trade zone.

Foreign trade transactions may be conducted in a free-trade zone without any restrictions, in conformity with the contract. The export of goods and services from a free-trade zone and the import of goods and services in a free-trade zone are free and without any quantitative restrictions, nor may the commercial policy measures be applicable to such import and export.

The goods prohibited from being imported, i.e. exported may not be imported in or exported from a free-trade zone.

The goods being brought in and taken out of a free-trade zone, as well as the goods stored in a free-trade zone, are to be treated as bonded goods.

A user reports to the competent customs office all of the goods brought in and taken out.

A user may move goods from the free-trade zone to another part of the territory of Serbia, i.e. bring goods in the free-trade zone from another part of the territory of Serbia, all on a temporary basis:

  • for the purpose of subjecting them to inward, i.e. outward processing
  • for reasons relating to testing, issuance of test certificate, repair and marketing promotion.

The competent customs office approves the customs-permissible treatment of the goods which are moved from the free-trade zone to another part of the territory of Serbia, i.e. bring in the free-trade zone from another part of the territory of Serbia, all on a temporary basis pursuant to the law governing the customs system and customs procedures.

The certificate showing that goods have been produced in a free-trade zone is issuable by the customs office exercising surveillance in that free-trade zone, under the prescribed regulations.

Customs duty and other import levies are not payable for the import of goods used for business operation and erection of buildings in a free-trade zone.

The goods put in circulation from the free-trade zone to the territory of Serbia are subject to customs duty and other import levies. A person who puts the goods in circulation from the free-trade zone to the market in the territory of Serbia is obliged to declare such goods to the customs office for customs clearance purposes.

The obligation to pay customs duty and other import levies on the goods which shall be put in circulation from the free-trade zone to the market in the territory of Serbia begins on the day when the goods pass from the free-trade zone to the territory of Serbia. The amount of customs duty and other import levies on the goods which shall be put in circulation from the free-trade zone to the market in the territory of Serbia is to be fixed in accordance with the state the goods are in and the regulations that are applicable on the day of the customs declaration’s acceptance.

The customs value of goods which shall be put in circulation from the free-trade zone to the market in the territory of Serbia, as well as the amount of customs debt, is fixed in conformity with the provisions of the law governing the customs system and customs procedure.

A user is obliged to enable the implementation of customs surveillance and control measures and to keep a prescribed record of the goods being imported, i.e. brought into the free-trade zone, exported from, i.e. taken out of the free-trade zone and used in the free-trade zone.

Any payment, collection, transfer, purchase and sale in foreign means of payment and in dinars in a free-trade zone is carried out in conformity with the regulations governing foreign currency operations.

Founding of banks and their operation in a free-trade zone is carried out in accordance with the regulations governing banks.

Insurance business in a free-trade zone is carried out in accordance with the regulations governing insurance.

The employment relations between employees and employers (users) in a free-trade zone are regulated by employment contract, in accordance with the act governing employment and employment relations.

The provisions of the law governing the value-added tax apply to the entry of goods into a free-trade zone and provision of services in a free-trade zone.

A user, i.e. a free-trade zone management company may enjoy tax breaks in accordance with the regulations governing corporate tax, property tax and individual income tax.

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