This Law on Investments regulates the general legal framework for investments in the Republic of Serbia, the bodies that support investments by providing efficient services to investors, the establishment and operation of the Council for Economic Development, and the establishment and operation of the Development Agency of Serbia.
According to the provisions of the Law on Investments investor is a legal or natural person who acquired the investment on the territory of the Republic of Serbia, in accordance with the law.
Investment in terms of the Law on Investments are:
- Direct investment i.e.investment in material and non-material assets of the company
- Indirect investment i.e. acquiring shares or stocks in the company.
Investment, in the terms of the Law on Investments, provides to investors the following rights: freedom of investment, protection of acquired rights, exception of investments from expropriation, national treatment of foreign investments, freedom of foreign payment, right to transfer profit and assets, as right on state aid.
Freedom of investment
Investors enjoy the freedom of investment, in accordance with the Constitution and the law and protection of investments executed in accordance with the law is guaranteed.
Data submitted by the investor in the process of awarding incentives are business secrets no later than the decision on approval of the allocation of incentives.
Protection of Acquired Rights
An investor shall enjoy full legal security and legal protection in respect of rights acquired by investing.
An investment shall not be subject to expropriation either directly or indirectly through measures that have a goal that is equal to expropriation.
Notwithstanding , the property and other property rights of the investor on immovable property may be seized or limited only in public interest, if such possibility is provided by the law that governs expropriation, in a non discriminatory manner, in a procedure prescribed by that law, with the payment of adequate compensation without delay.
The adequate compensation to the investor shall include a compensation for the expropriated immovable property and a compensation for decrease of value of business caused by such seizure, in accordance with the law.
The value of expropriated property prior to the moment when the intention to expropriate was made public shall be taken into account during determination of the value of compensation. The compensations for the expropriated immovable property and for decrease of value of business caused by such seizure, in accordance with the law shall be paid to the investor without delay and shall include the penalty interest in case of default, calculated from the day when the seizure was executed until the day of payment in accordance with the Law on Investments.
In case of expropriation, the investor has a right to legal remedy, to have the procedure of seizure urgently solved, and the value of the seized object assessed by a court or other competent authority, in accordance with the law.
National Treatment of Foreign Investments
Investors which are foreign legal or natural persons, in terms of their investments enjoy in all equal status and have the same rights and obligations as domestic investors, unless this or other law provides otherwise.
Investor which is foreign legal or natural person may acquire property or other property rights to movable and immovable property located on the territory of the Republic of Serbia, in accordance with the Constitution and law.
Freedom of Foreign Payment
The investor, in order to make foreign payments that are allowed by the law that regulates foreign currency transactions, may buy foreign currency on the foreign currency market in the Republic of Serbia
Right to Transfer Profit and Assets of the Investor which is Foreign Legal or Natural Person
Investor which is foreign legal or natural person is entitled, in accordance with the law, after paying all tax and other duties that belong to public revenue, to freely transfer financial and other assets related to the investment, such as:
- Revenue (dividends, fees for the use of intellectual property rights and other related rights, accrued interest, and other)
- Assets that becomes his after termination of the commercial company, or after termination of the investment contract
- Funds gained from sale of stakes or shares of the commercial company
- Funds gained from the decrease of the basic capital of the commercial company
- Funds gained from additional payments
- Expropriation compensations or compensations from some other measure with a similar effect.
Pecuniary funds may be transferred abroad in a currency that is tradable on the domestic foreign currency market, in line with the regulation that regulates what kind of foreign currency and foreign cash is buyable and sellable on the foreign currency market.
Forms of the State Aid
Investors are entitled to the following forms of state aid for investments, in accordance with the regulations that govern:
- Allocation of the incentives
- Tax incentives and tax reliefs and exemptions from paying duties
- Tariff preferences
- System of mandatory social insurance
- Lease and alienation of real estate and land in public ownership
- Other forms of state aid in the terms of the law governing the control and allocation of state aid.
Upon occasion of the allocation of state aid especially shall take into account the rule of cumulation of state aid in the terms of the law governing the control and allocation of state aid.
Public registry shall be kept about direct investments in the Republic of Serbia and allocated state aid linked to these investments. Public Register shall be regulated by a special law.