SERBIA Business and Investment Opportunities in Southeast Europe Zoran Golubovich President, Serbian-American Chamber of Commerce Chicago, April 14th, 2010.

Basic Facts About Serbia Location: Crossroads of two Pan European corridors. Population: ~ 8 million Area: 88,000 km² Capital: Belgrade Language: Serbian State: Democratic Republic Currency: Serbian Dinar $1 = 75 RSD; € 1= 99 RSD, as of Apr.’10. Time Zone: Central EU Time r-GDP : 6% (in 2008)

% 40% Real attractivness (Nb of inward FDI projects 2007) Perceived attractiveness Turkey % Croatia 0% Serbia Romania Greece Cyprus Bulgaria Matching image and reality Outsider with a poor image but strong results Challengers with a stronger image than the reality Bosnia & Herzegovina Bosnia & Herzegovina Source: Ernst & Young Southeast Europe Attractiveness Survey international executives / E&Y European Investment Monitor 2008 Perceptions vs. Reality Image/reality

Current Investors in Serbia Investors include: Phillip Morris, US Steel, Ball Packaging, Coca Cola, Microsoft, Telenor, Banka Intesa, METRO Cash & Carry, FIAT, AB InBev, Mobilkom, etc.

Economic stability Integration with World Institutions brings economic stability!

Trade Diplomacy – Market Access Recently signed FTA with Turkey will become effective in May CEFTA (Central European Free Trade Agreement) provides duty free access to a 20 million people market. Serbia can serve as a manufacturing hub for duty-free exports to a market of almost 1 billion people (European Union, the United States of America, Russia, South East Europe, and Belarus). Doing Business in Serbia enables access to a huge marketplace.

Low Overhead Costs Labor Cost Around 50% of the level in Eastern Europe EU countries. Corporate Income Tax The second lowest corporate income tax in Europe. Current Utility Fees Electricity: Based on the consumption category and daily tariff rate € /kwh. Gas: €0.3328/m3 Water: Operated at the municipality level with water prices set by local authorities.

Investment Incentives Tax Incentives A 10-year corporate profit tax holiday for investment over €7.5 million and 100 new employees Corporate profit tax credits up to 80% of the fixed assets investment Carrying over of losses over a period of up to 10 years Accelerated depreciation of fixed assets A 5-year corporate profit tax holiday for concessions Salary tax base deduction in the fixed amount of €60 a month Salary tax exemptions for employees under 30 and over 45 years Annual income tax deductions up to 50% of the taxable income Social insurance contribution exemptions for employees under 30 and over 45 years Customs-free imports of equipment based on foreign investment Financial Incentives Manufacturing: From €2,000 up to €5,000 of state grants per new job created Services: From €2,000 up to €10,000 of state grants per new job created R&D: From €5,000 up to €10,000 of state grants per new job created

Current Investment Opportunities There are over 120 actual investment projects available in Serbia at this time! Sites include land for new development, as well as the existing facilities. Model of TransferNumber of Sites Purchase49 Privatization4 Lease22 Lease for 99 years14 Joint Venture3 Other Options Possible 33 The Most Attractive Industries for Investment Food Automotive Construction Electronics ICT Real Estate Renewable Energy Textile Wood and Furniture

THANK YOU! Primary Source of Information: Serbia Investment And Export Promotion Agency (SIEPA) SIEPA Services Include: Investment consulting Networking at all levels – from municipal to the highest Government levels Linking potential investors to opportunities, site visits, etc. Administration of financial incentives You may submit request for more info to the Serbian American Chamber of Commerce at / (SACC) / or Consulate General of the Republic of Serbia