Published on and written by Cyril Jarnias
Driven by steady growth, attractive taxation, and a wave of pro-business reforms, Serbia finds itself at a pivotal moment. The country is gradually shifting from a model centered on large-scale projects, massive foreign investment, and low labor costs toward an economy betting more on innovation, high-value-added exports, and local entrepreneurship. For a business founder – whether Serbian or foreign – opportunities are plentiful, but they come with very real risks and sometimes demanding entry conditions.
This article provides a comprehensive analysis of prospects for entrepreneurs in Serbia, incorporating macroeconomic data, available support schemes, the current regulatory environment, and sector-specific dynamics for the coming years.
A Broadly Favorable Macroeconomic Context, But Under Pressure
Serbia ranks among the most dynamic economies in Southeast Europe. The country has recorded several consecutive years of growth, with GDP reaching nearly 69 billion euros in 2023 and a projected trajectory toward 100 billion euros by 2027. IMF projections estimate real GDP growth of around 3 to 4% per year in the coming years, rising from 3% in 2025 to 4% in 2026, then 4.5% in 2027.
Serbia’s declining public debt-to-GDP ratio, which contributed to achieving its first ‘investment grade’ sovereign rating in 2024.
However, the trajectory is not linear. Recent years have shown the vulnerability of the Serbian economy to external shocks – slowdown in the eurozone, geopolitical tensions, energy crisis, war in Ukraine – and internal political uncertainties. Foreign Direct Investment (FDI) flows, which had reached record levels (up to 6.6 billion euros in 2024, representing about 5.6% of GDP), slowed significantly in early 2025, with a drop in net inflows of nearly 67.5% in the first five months of the year compared to the same period in 2024. Entrepreneurs must therefore operate in an environment where fundamentals remain solid, but where capital volatility and uncertainty remain high.
An Economy Structured by SMEs, Services, and Industry
The Serbian productive fabric rests primarily on micro, small, and medium-sized enterprises (MSMEs), which represent 99.7% of registered companies and account for about two-thirds of formal employment. The services sector dominates GDP, with over 50% of value added and nearly two-thirds of jobs, while the manufacturing industry accounts for just under a quarter of GDP but plays a key role in growth and exports. Agriculture, very prominent, generates around 6 to 7% of GDP, but employs far more if informal labor is included.
The sectoral structure can be summarized as follows:
| Sector | Estimated Share of GDP | Share of Employment (approx.) |
|---|---|---|
| Services | ≈ 51–52 % | ≈ 66–67 % |
| Industry (manufacturing, etc.) | ≈ 24–25 % | ≈ 27–30 % |
| Agriculture | ≈ 6–7 % | ≈ 15–16 % |
For an entrepreneur, this means the most natural opportunities lie in business services, commerce, IT, tourism, and niche manufacturing activities integrated into European value chains (automotive, components, machinery, electronics, processed food).
At the same time, large enterprises – many of which are still state-owned – account for only 0.3% of the total number of companies, but they generate about 45% of value added. State monopolies in energy, transport, or telecoms create an environment where entrepreneurial scope exists, but must carve a path between dominant players, slow regulation, and sometimes over-administration.
FDI Is No Longer Enough: Expected Rise of Domestic Capital
For more than a decade, Serbia built its growth model on the massive attraction of FDI, supported by a relatively cheap workforce, generous employment subsidies, and tax exemptions. The country has repeatedly ranked at the top of global FDI performance rankings and attracted nearly 15.9 billion euros in foreign investment between 2020 and 2024.
Overview of the geographic origins of investors and the most attractive economic sectors for Foreign Direct Investment (FDI) in Serbia.
Germany, Italy, France, Austria, and Slovenia are major sources of investment.
China (a major player in mining and infrastructure), the United States, Russia, and Japan are also significant investors.
Accounts for nearly one-third of FDI between 2012 and 2022, dominating investments.
Captures about 18% of foreign direct investment.
A dynamic sector, representing up to 25% of FDI flows in 2024.
An attractive and significant industry for foreign investors.
However, this model is showing its limits. The gradual rise in wages, energy uncertainties, regional competition, and political episodes deemed destabilizing by some investors have reduced net FDI flows. Several local economic leaders emphasize that Serbia “can no longer rely solely on FDI” and must much more strongly encourage domestic investment, including through a potential development bank and strengthening of the Development Agency.
For local entrepreneurs, this turning point is ambivalent: on one hand, a partial withdrawal of foreign players can weaken entire ecosystems (automotive, construction); on the other, it opens spaces that innovative Serbian companies can occupy, provided they access adequate financing and skills.
A Tax Environment Among the Most Attractive in Europe
On the tax front, Serbia clearly positions itself as a pro-business jurisdiction. The standard corporate tax rate is 15%, one of the lowest in the region, with, for certain projects and sectors, schemes allowing the effective rate to drop lower (e.g., via the IP Box regime or R&D super-deductions). Personal income tax is generally 10% on salaries, with progressive surtaxes above certain annual thresholds.
Percentage of revenue from intellectual property created in Serbia that is exempt from the taxable base.
Founders of innovative startups can be exempt, for three years, from social contributions and tax on their own salaries, up to 150,000 dinars per month. For researchers and highly qualified profiles, a 70% deduction on the tax and contribution base is provided for a period of five years. This is complemented by generous schemes for employing persons with disabilities, hiring long-term unemployed individuals, or large-scale investments (corporate tax exemption for up to ten years above a certain investment and job creation threshold).
Serbia has strengthened its attractiveness for exporting companies by signing over 60 double taxation avoidance treaties and numerous free trade agreements. This framework provides duty-free access to a market of over 1.3 billion consumers, including the EU, CEFTA, Russia, Turkey, EFTA, and, more recently, China. For a young exporting company, this combination of low taxation and a broad accessible market is a major competitive advantage.
A Regulatory Framework Modernizing, But Still Complex
Beyond taxation, Serbia has multiplied reforms to simplify business creation and management. Registering a limited liability company (DOO) is now done online with the Serbian Business Registers Agency, with a purely symbolic minimum capital (100 dinars, less than one euro) and an average processing time of 5 to 7 business days. Invoice issuance is fully digitized, tax obligations are declared via electronic portals, and the generalization of e-invoices was enacted in 2022.
To foster innovation and comply with European standards, Serbia has revised or adopted key laws (innovation, digital assets, alternative investment funds, e-commerce, employment of foreigners, intellectual property). Furthermore, “regulatory sandboxes” are available in the FinTech and MedTech sectors. These schemes allow testing new products, such as importing unregistered medical devices, in a controlled environment supervised by the authorities.
Nevertheless, studies and surveys among entrepreneurs point to persistent weaknesses: cumbersome procedures for certain permits, multiple para-fiscal charges, perceived instability of tax policy, judicial delays, and difficulty enforcing contracts or quickly collecting receivables, especially from large companies or public entities. The European Commission and OECD thus highlight limited progress in public enterprise governance, transparency of state aid, and administrative efficiency.
A Clear Strategy for Innovation and Startups
Serbia is not just simplifying the general framework; it has adopted a dedicated strategy for developing its startup ecosystem for the period 2021‑2025. Led by the Ministry of Education, Science and Technological Development, this roadmap sets an ambitious quantitative target: to increase the number of startups to between 800 and 1,200 and transition the ecosystem from the “activation” phase to “globalization.”
This strategy is aligned with several key structuring documents (smart specialization, AI, industrial policy, networks, education, science). Its objectives are to strengthen entrepreneurial capacity, densify support infrastructure, diversify financing, improve the business climate, and spread a culture of innovation.
Results are already visible. According to data compiled in 2020, the Belgrade‑Novi Sad ecosystem represented an estimated value of 434 million euros, potentially three times more if certain valuations are considered. Between 200 and 400 startups were active in these two cities, concentrating over 80% of the national ecosystem, and about 300 new startups were created in two years. More than 6,000 people now work in startups, a number that has nearly doubled in recent times.
A structured network of parks, incubators, and coworking spaces, reinforced by initiatives supporting entrepreneurship and technology.
Located in the cities of Belgrade, Novi Sad, Niš, and Čačak, they form the physical backbone of the innovation ecosystem.
About forty incubators and numerous coworking spaces support startup and project development.
Digital Serbia Initiative, Startit, ICT Hub, and Impact Hub offer acceleration programs, competitions, and support.
The Serbian Venture Network completes the network by facilitating connections and funding for innovative companies.
IT and Digital, the Engine of Entrepreneurship
The information technology sector is one of the engines of Serbia’s economic transformation. It represents between 6 and 10% of GDP depending on calculation methods and shows exceptional growth in its exports, rising from about 100 million dollars in 2008 to over 4 billion dollars in 2023, with an average annual growth rate exceeding 20% for over a decade. IT is now the leading export category, ahead of historic sectors like steel, automotive, or agriculture.
Belgrade and Novi Sad are the main tech hubs, but cities like Niš are developing. The ecosystem includes several thousand IT companies and between 100,000 and 115,000 digital professionals in 2024, many of whom work internationally. The presence of development centers for major groups (Microsoft, SAP, Huawei, IBM, etc.) stimulates the entire sector.
This dynamic is based on a substantial talent pool: nearly 250,000 students in STEM fields, a strong presence of computer science at all levels of the education system (coding introduction from 5th grade, training in Scratch, Python, etc.), and a very high level of English (24th worldwide according to the English Proficiency Index, Belgrade in the top 20 of major global cities). The government has increased quotas for IT students, funded infrastructure like the national Data Center in Kragujevac (hosting an NVIDIA supercomputer) and four technology parks, and launched a digital skills strategy for the population.
For entrepreneurs, Eastern Europe offers access to technical profiles (developers, designers, data scientists, engineers) at competitive costs compared to Western Europe. However, high demand for these skills, especially for senior developers and specialists in cloud, AI, and cybersecurity, creates wage pressures in these specific segments.
The Key Role of the Innovation Fund and Funding Programs
At the heart of the innovation support architecture is the Innovation Fund, created by the law on innovative activity and operational since 2011. Under the auspices of the ministry in charge of science and innovation, this fund has independent governance, international project auditing, and an expert committee including diaspora members. It benefits from significant financial support from the European Union (IPA pre-accession funds) and the World Bank.
The Fund administers a comprehensive range of programs designed to support innovative companies at every stage of their development, from creation to maturity.
Mini-grants to support the very earliest stages of innovative project development.
Matching Grants aimed at more mature companies to amplify their growth.
Innovation vouchers and a technology transfer program to facilitate access to expertise and R&D.
Katapult accelerator and Smart Start program to support startup acceleration and launch.
Serbia Ventures initiative for equity participation at an early stage.
Dedicated programs for GovTech (public technologies) and BioTech sectors.
Among these tools, the Katapult program holds a strategic place. It offers entry grants of up to 2.4 million dinars for startups in the initial phase and 6 million for those in growth, as well as co-investment grants that can reach 36 million dinars, matching qualified private capital. At least half of the funding must be directed toward the flagship areas of the smart specialization strategy: food for the future, ICT (with a focus on AI), machines and production processes of the future, creative industries.
The total funding for Katapult comes from cross-sources, including a World Bank loan, an EU grant, and the state budget.
Beyond the Innovation Fund, other public institutions directly support entrepreneurship:
| Institution / Program | Main Type of Support |
|---|---|
| Ministry of Economy | Grants for young entrepreneurs, beginners, equipment aid |
| Serbia Development Agency | Aid for SME internationalization (trade fairs, missions, export promotion) |
| Serbia Development Fund | Startup loans, investment loans, online educational portal |
| Vojvodina Guarantee Fund | Guaranteed loans for women entrepreneurs and beginners |
| National Employment Service | Self-employment grants, business management training |
| Science and Technology Parks (STP) | Offices, laboratories, incubation, shared services |
For a founder, the challenge is to know how to combine these instruments and align their project with national priorities (innovation, green, digital, export) to maximize their chances of obtaining grants or guarantees.
A Gradual Integration into European Value Chains
Serbia’s geographic position – at the crossroads of Central and Southern Europe, connected by major road and rail corridors – makes it a natural logistics hub. Massive investments in infrastructure (highways, railway modernization, pan-European corridors, future Belgrade metro, improvement of river ports on the Danube) reinforce this vocation. In foreign trade, the EU concentrates nearly 65% of Serbian exports, with Germany as the first partner, followed by neighboring countries (Bosnia‑Herzegovina, Italy, Hungary, Romania).
Serbian industry is increasingly integrating into European value chains, particularly in the automotive (Fiat/Stellantis and global suppliers), machinery, electronics, and processed food sectors. Free trade agreements and the EU accession perspective encourage companies to align their standards with community requirements, especially regarding norms, traceability, environment, and taxation.
For entrepreneurs, this opens two types of prospects. On one hand, the possibility to position as a specialized subcontractor – in forging, fine metallurgy, electronic components, plastic or metal parts, packaging – for European groups seeking competitive partners. On the other, the possibility to develop own-brand products, targeting the European market directly, leveraging local capabilities (design, engineering, IT) and European schemes (Horizon Europe, Digital Europe, Single Market SME programs, EIB/EBRD guarantees).
Serbia could generate up to 9.5 billion euros in additional exports over the period 2026-2030 across several key industrial sectors.
Promising Sectors for Entrepreneurs
Not all sectors are equal in terms of prospects. Several areas clearly appear as sources of opportunities for the coming years.
Information Technology and Digital Startups
As we have seen, IT is already a pillar of the economy. The startup ecosystem is developing rapidly within it with international successes (Nordeus and its game “Top Eleven” acquired by Take‑Two, FishingBooker in niche tourism, genomic analysis platforms, AI solutions for logistics or finance, etc.). Promising niches include video games, blockchain, cybersecurity, B2B SaaS, GovTech, HealthTech, AgriTech, and applied AI (industrial vision, energy optimization, predictive maintenance).
Foreign companies can find partners for nearshore R&D centers, software development agencies, or providers of digital marketing, UX/UI, international sales – skills sometimes still underrepresented in Serbian startups.
Energy and the Green Transition
The energy sector is both a systemic risk – dependence on lignite, fragile governance of public enterprises, exposure to price shocks – and a vast investment field. Serbia has joined the Energy Community and is gradually aligning with the European Green Deal, with a carbon neutrality target by 2050 and an integrated energy-climate plan foreseeing a 40% reduction in emissions by 2030 and a 45% share of renewables.
Investment needs are estimated at at least 32 billion euros over 25 years for the energy transition.
For entrepreneurs, this means opportunities in engineering, component manufacturing, installation and maintenance of solar panels and wind turbines, energy management solutions for industry, building thermal retrofits, carbon consulting services, agro‑voltaics, or technologies for pollution control, waste, and wastewater treatment.
Modernized Agriculture and Food Processing
With over 60% of its territory arable and a status as a major regional exporter of cereals, fruits, and vegetables, Serbia has an enormous reservoir for modernized agribusiness. Segments like red fruits (Serbia exports up to 30,000 tons of sour cherries per year), berries, apples, wine, organic products, and high-end frozen foods already have an international positioning.
Prospects for entrepreneurs cover the entire value chain: upstream (irrigation, sensors, precision agriculture platforms, processing equipment, cold chain logistics) and downstream (high-value-added food brands, digitized short supply chains, traceability, export). Structures like the BioSense Institute in Novi Sad (a European center of excellence for digital agriculture) and EU-supported projects (IPARD, Green Agenda) offer technological and financial support.
Tourism, Hospitality, and Wellness
The country is experiencing rapid growth in tourist arrivals, driven by Belgrade, Novi Sad, the mountains (Zlatibor, Kopaonik), spa towns (Vrnjačka Banja), wine regions (Fruška Gora) and, in the longer term, the prospect of EXPO 2027 in Belgrade. The International Exposition, declared a project of national importance, will mobilize nearly 17.8 billion euros in investments in transport infrastructure, public facilities, hospitality, and entire neighborhoods.
The event’s overall economic impact is estimated at 1.1 billion euros.
E‑commerce, Logistics, and Business Services
Online commerce already exceeds one billion dollars in revenue, with annual growth over 40% and a business satisfaction rate of about 3.6/5. The market remains underdeveloped compared to the EU, paving the way for new players in specialized marketplaces, urban logistics, fulfillment and warehousing, SaaS solutions for merchants, or financial and payment services (note that Serbia has joined the SEPA zone, drastically facilitating euro transfers).
The country’s central position in the Balkans, combined with a sustained infrastructure investment program, also creates fertile ground for regional logistics platforms, multimodal transport companies, distribution hub operators, and value-added service providers (cold chain logistics, returns management, customization).
Quality Human Capital, But Scarce and Highly Sought After
One of Serbia’s paradoxes lies in the coexistence of a high level of education (literacy rate of nearly 99%, recognized universities, high ranking for science and engineering graduates) and a growing skills shortage, particularly in industry, construction, ICT, transport, and technical trades.
The youth unemployment rate in Serbia remains high, ranging between 22 and 26%.
To address these challenges, Serbia has adopted an employment strategy until 2026, an economic migration strategy, a digital skills development strategy, and relaxed the framework for hosting foreign workers. A single “unified permit” for residence and work, managed online, has been introduced, the duration of temporary permits extended, and conditions for obtaining permanent residence eased. Authorities plan to issue up to 100,000 work permits in 2025, with already very high proportions of foreigners in construction.
For entrepreneurs, the message is twofold: they benefit from a highly qualified talent pool in certain fields (IT, engineering, finance, languages), but must anticipate sustained pressure on human resources, integrate internal training schemes, cooperate with universities, or even resort to international recruitment themselves.
Massive European and International Schemes
Because it is a candidate for EU accession, Serbia has access to a vast array of European programs of direct interest to micro-enterprises, SMEs, and startups: Horizon Europe for R&D (overall budget of 95.5 billion euros, with already significant Serbian participation), Digital Europe (8.1 billion euros for digital infrastructure, AI, cybersecurity, skills), the Single Market Programme for SMEs, the WBIF (Western Balkans Investment Framework) for infrastructure projects and guarantees, ESF+ for social innovation and employment.
The new Growth Plan for the Western Balkans foresees 6 billion euros in support, with 1.5 billion for Serbia, conditional on a Reform Agenda.
For an entrepreneur, the practical consequence is that many calls for projects and funding instruments – often complex but very advantageous – exist to support innovation, digitalization, decarbonization, and the upscaling of products and services. The difficulty lies less in fund availability than in the ability to prepare applications, meet criteria, and co-finance projects.
Obstacles and Vulnerabilities for Business Founders
The picture would be incomplete without an analysis of difficulties encountered on the ground. Surveys among small businesses and the self-employed reveal several recurrent barriers.
Access to finance remains problematic for many SMEs, outside the most visible tech companies. Banks often require high collateral, interest rates are considered high relative to margins, procedures are complex, and the supply of suitable financial products (venture capital, quasi-equity, long-term investment credit) remains limited, even though business angel initiatives, local funds, and public instruments are developing.
Despite simplified business creation, compliance with obligations (declarations, licenses, inspections, electronic taxation) remains burdensome, especially for micro-enterprises outside major centers. Para-fiscal charges (fees, local or sectoral contributions) are often perceived as opaque and unpredictable. Entrepreneurs call for a reduction in these levies, administrative simplification, and greater stability of rules.
The question of political predictability and the rule of law is also central. Reports from the European Commission and OECD emphasize the slow pace of judicial reforms, the persistence of corruption and clientelism, and political influence on certain major economic decisions (notably related to public enterprises and large mining or energy projects). These elements fuel a sense of uncertainty for long-term investment decisions.
The green transition represents both a necessity and a source of costs for Serbian industry, which is still very carbon-intensive. The implementation of the EU’s Carbon Border Adjustment Mechanism (CBAM) risks significantly increasing the export bill for certain sectors like metals, cement, or electricity if emissions are not reduced. To avoid a loss of competitiveness, companies must therefore invest now in energy efficiency, process modernization, and improving their environmental management.
A Future Between Upscaling and the Risk of “Incomplete Modernization”
Over the 2026‑2030 period, Serbia faces a strategic choice: either transform the momentum gained from major infrastructure projects, FDI, and macroeconomic stability into a sustainable foundation of competitiveness based on productivity, innovation, and institutional quality, or remain stuck in a model of “partial modernization,” dependent on public projects, relatively low wages, and sectoral rents.
The country benefits from an exceptional geographic position, a qualified workforce, and favorable taxation. Its infrastructure and digital ecosystem are improving significantly. It receives massive support from the EU and international financial institutions and has a dense network of entrepreneurship support organizations (clusters, incubators, chambers of commerce). The country has also demonstrated its ability to develop and fund coherent strategies in key areas like smart specialization, artificial intelligence, startups, employment, and digital.
The risks are equally real: demographic aging, brain drain, geopolitical tensions that could slow FDI, slowness of governance reforms, dependence on polluting sectors, exhaustion of the “low wages + subsidies” model, over-reliance on large public or foreign players.
To thrive in the coming years, entrepreneurs must align their project with the major axes of transformation: digital, green, export, industrial upscaling, and high-value-added services. It is crucial to leverage available tax and financial schemes to benefit from a favorable environment. Conversely, models relying solely on low labor costs or fragile regulatory niches risk rapid obsolescence.
Ultimately, the economic prospects for entrepreneurs in Serbia can be summarized by a dual movement: the gradual end of an easy development cycle, driven by projects and FDI, and the opening of a more demanding phase, where comparative advantage will rely more on ingenuity, the ability to innovate, to connect to Europe and the world, and to navigate a changing regulatory environment. For those ready to play this long-term game, Serbia remains one of the most promising entrepreneurial grounds in the Balkans.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
