1. Business Survey 2013 Belgrade November 13, 2013

2. 2 Business Survey 2013

3. Methodology Realization: research was conducted in the period between 9th of September and 4th of October 2013 Target population: Private business entities in Serbia with 3 or more employees Sample frame: List of all business entities (enterprises and establishments) registered at the Serbian Business Register (2012) Sample size: 1029 business entities Stratification: according to region, economic activity of business entities and size Method of data collection: Face-to-face interviews in company offices Average duration of the interview: 50 minutes 3

4. 4 Business Survey 2013

5. ItemMeasure # Companies participating in survey / # invited1029 / 3996 Founded before / after 200049% / 51% Profitable / unprofitable 2010-12 2010: 90% / 10% 2011: 89% / 11% 2012: 89% / 11% 5 Characteristics of Surveyed Companies % of participants in survey

6. Sales by Market 6 Average for All Surveyed Companies

7. Expectations for the near future 7 General expectations Specific expectations Do you expect increase, decrease or no change in that area/aspect?

8. 8 Gender differences Employees (on average) Owners/Managers (on average) Work forceOwnership structure TotalEnterprises Entrepreneurs 69% of the businesses have only up to 5 female employees 16% of the companies have only female managers, while 61% have only male managers Significantly more “female businesses” are present among entrepreneurs comparing to enterprises

9. Business Associations Membership by year Evaluation 2013 Membership 2013

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11. Summary Significant Improvement Corruption Public procurement Business licensing Inspections Senior management time dealing with red tape Transparency and predictability for doing business Public private dialogue Some Improvement Time and money spent on regulatory issues Wage taxes and contributions Enforcement of judgments Exchange rate volatility Illiquidity constraints Duration of loan approval process No Improvement Construction permits Administrative procedures Para-fiscal charges Tax administration Inflation Interest rate volatility Access to finance Collateral requirement Worse Court procedures Labor Law procedures Customs and external trade procedures VAT rates Excise taxes Customs duties Quality and service of financial institutions

12. Negative Impacts on Businesses 12 Please assess the impact of the following elements on your business (percentage of negative ratings)

13. Time and money spent on regulatory issues 13 Money Time During the last 12 months has your company spent more or less money and time dealing with regulatory issues compared to the previous year?

14. Senior management time spent in dealing with regulatory requirements 14 201120122013 Up to 10% of work time17%12%23% From 10 to 20% of work time29%26%50% From 20 to 50% of work time42%44%20% More than 50% of work time12%16%7% What is the amount of senior management time spent in dealing with regulatory requirements?

15. Corruption in public administration 15 To what extent does corruption in public administration affect your business? Effects of corruption on business Blackmail by a public servant Have you experienced blackmailing by a public servant in an administrative procedure? Reported use of private connections Have you ever used some private connections in dealing with public administration issues?

16. Public procurement 16 Base: Those who have experience with public tenders: (2011=400, 2012=400, 2013=293) How often the following circumstances contribute to winning on public tenders? Marks from 1 to 5, 1 meaning never and 5 meaning often

17. Construction permits 17 Do you agree with the following statements?

18. Inspections 18 201120122013 Average amount of fines imposed2128 €1655 €868 € Average amount of time (in hours) spent by management 703417 Average number of visits in the year before5.56.03.1 Average number of visits in the current year4.83.82.1 Base: Those who were visited by inspections (816) Base: Those who were visited by inspections (2011=738, 2012=755, 2013=816) What was the most frequent inspection in 2012 in your company? Basic information on inspections:

19. Para-fiscal charges 19 How burdensome are the following taxes and charges for business?

20. The enforcement system 20 How would you rate the efficiency of the system for enforcement of judgments? *to achieve reliable comparability, only clearly negative and clearly positive marks were included, due to unequal number of missing values

21. Employment Contracts 21 Temporarily employed Permanently employed Out of the total number of employees in your business, how many are working on a temporary contract? Out of total number of employees in your business, how many are permanently employed?

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23. Economic factors related to competitiveness 23 Please evaluate how the following factors affect the competitiveness of your business

24. Grey economy estimates 24 According to your estimate, out of the total number of employees working in enterprises that operate in the same industry as your company, for what percentage of employees do the enterprises pay (1) full contributions on salaries, (2) only partial contributions on salaries, and (3) no contributions on salaries at all?

25. Budget cuts aimed at reducing taxes 25 Which budget cuts for government services would you support in order to lower taxes? Supported budget cuts:

26. Funding sources 26 81% of total funding comes from business owners themselves What percentage of your business’ financing comes from…

27. Types of finance used 27 Please indicate the type of finance you have used and how often Type of finance used often and all the time:

28. Suitability of the available finance 28 How suitable is the available finance to your needs?

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30. Impact of reform efforts 30 To what extent do you agree or disagree with the following statements?

31. Impact of reform efforts 31 To what extent do you agree or disagree with the following statements?