what the free zones are?

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What the Free Zones are?. Free zones in Serbia are highly developed centers of infrastructure equipped land with logistic support prepared to attract production and technology investment. In Free zone areas are offered business advantages - Custom Duties and TAX releasing's. - PowerPoint PPT Presentation

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Page 1: What the Free Zones are?
Page 2: What the Free Zones are?

Free zones in Serbia are highly developed centers of infrastructure equipped land with logistic support prepared to attract production and technology investment.

In Free zone areas are offered business advantages -Custom Duties and TAX releasing's

What the Free Zones are?

Page 3: What the Free Zones are?

• GATT (general Agreement of Tariffs and Trade)

• Kyoto convention and revised Kyoto convention - 1999 year - on the simplification and harmonization of customs procedures

• Customs Community Code EU

• National Free Zone Law from 2006. year

The Free Zone regulations

Page 4: What the Free Zones are?

Incentives by the law

Business free of CUSTOM DUTIES Business free of VAT Business free of Corporate profit tax

Page 5: What the Free Zones are?

Free zones – Serbian idea?

Page 6: What the Free Zones are?

• Attract INVESTMENTS in the undeveloped regions• Increase EMPLOYMENT• Increase PRODUCTION and EXPORT • Provide to companies SAVING in business

(duty, tax, stimulate measures of economic policy)• Concentrate services in LOGISTICS CENTERS

Why do Free Zones exist?

Page 7: What the Free Zones are?

Serbia advantages

• Location on Pan-European corridor 10 represents link of Europe and Middle East.

• Unemployed, educated and professionally skilled workers• Simplified regulations on foreign trade and investments• Fast company establish procedure• Lowest corporate profit tax rate in Europe- 10% - In Free zones 0%

Page 8: What the Free Zones are?

Free trade agreements

European Union EFTA Russia Kazakhstan

CEFTA Turkey BelorussiaUSA – preff. trade

regime

Page 9: What the Free Zones are?

Free Zone benefits...

• Free of customs duties (and other import charges for goods, equipment, raw material and construction material)

• Fiscal benefits (exemptions from any tax burden for FDI, VAT, company profit tax, property tax, income tax)

• Efficient administration (one stop shop)

• Local infrastructure subsides (low price and service costs)

Page 10: What the Free Zones are?

Free zones in Serbia

Existing

In preparing Corridor X

JugNiš, Prokuplje

Pirot

Subotica

Novi SadZrenjanin

Corridor VII

SmederevoŠabac

Kragujevac

UžiceKruševac

Svilajnac

• Pancevo

Page 11: What the Free Zones are?

New incentives provided by the state

In Free Zones Corporate Income Tax = 0

Exemption from VAT on energy sources for production activities in the zone (Gas, Electric energy, Mazout, Coal)

Announced new incentives from the state Exemption from the corresponding part of the salary tax Exemption from VAT on goods and services trade within the

free zone

Page 12: What the Free Zones are?

Export increase for 32 % Companies in Free zones increase 17% Turnover increase 77 % Workers up for 60 % Investments up 275%

Free zone effects 2010/2011

Page 13: What the Free Zones are?

Export from Free zones in Serbia 2010

51%

20%

2%

12%

6%0%

9%

SZ „Pirot”

SZ „Subotica”

SZ „Zrenjanin”

SZ „Novi Sad”

SZ „FAS” iz Kragujevca

SZ „Šabac”

SZ „Užice”

Page 14: What the Free Zones are?

211 companies in Free zones in Serbia

Corridor X

JugNiš, Prokuplje

Pirot

Subotica

Novi SadZrenjanin

Corridor VII

SmederevoŠabac

Kragujevac

UžiceKruševac

Svilajnac

Sevojno

• Pancevo

Page 15: What the Free Zones are?

The Subotica Free Zone is located in the northern part of Serbia - border with Hungary and the EU

The E-75 international highway with rail line The Subotica Free Zone was founded in 1996 15 hectares of land 13.000 square meters of production space 26.000 square meters of closed storage space 313 square meters of office space City water supply, Two transformer sub-stations with 2x630 KW Telephone lines Projected connection to local gas lines

Free zone Subotica

Page 16: What the Free Zones are?

Free zone position 25km from the highway E70, 30 km from the Bosnian border, 70km from border with Croatia

The main economic potential are River Sava and Drina Total area of the zone is 3,991m², and will be extended this year. Greenfield area is around 2,3 ha Outdoor storage space 6,700m² Indoor storage space is 5,000m². Free zone is fully equipped with infrastructure with wide range of logistic services.

Free zone Šabac

Page 17: What the Free Zones are?

Zrenjanin Is the city in Vojvodina with most water flows in its area ( The Danube , The Tisa , The Begej, The Tamis, also the river canal network Danube-Tisa-Danube) which puts him among the most attractive cities for investing in Serbia, according to USAID, SIEPA and American Chamber of Commerce.

The Free zone covers an area of 6 hectares 400m² is for office space, 6000m² for warehouses and 5000m² for open storage space.

Free Zone Zrenjanin

Page 18: What the Free Zones are?

Free zone Kragujevac was founded on the 5th of November 2009, by the City of Kragujevac and FIAT automobile.

Basically, this zone is founded to endorse the development of the automotive industry in Serbia.

Free zone has around 157ha of land and includes total area of the automobile factory .

There are 200 parcels intended for FIAT subcontractor companies

Free Zone Kragujevac

Page 19: What the Free Zones are?

Free zone Užice is founded by the City of Užice, Copper mill AD. Sevojno and Impol-Seval Aluminum mills a.d. Sevojno

This is the 5th free zone founded in Serbia with many business benefits for all investors.

The main economic potential is metal and metal processing industry.

Free Zone Užice

Page 20: What the Free Zones are?

Established in 1996 Total area 103 ha 9 production and 100 trade entities with 5.000 employees Product export oriented free zone

main users Tigar A.D. and Tigar Tyres (part of MICHELIN group) Services in free zone – forwarding service and organization of

intermodal transport Turnover within the Free zone in 2010 around 360.000.000 Eura

Free zone Pirot

AWARDED - BEST OF SERBIA 2009-2011

Page 21: What the Free Zones are?

Biggest export from Serbia

9 production plants - 8000 trucks per year9 production plants - 8000 trucks per year

Page 22: What the Free Zones are?

Construction activities – investor is exempted of: Fees for development of building land All taxes and expenses of Municipal Administration (communal fees, town planning permits, town

planning approval, building permit, etc...)

During the utilization of facility for the period of 5 years investor is exempted from: paying local communal taxes fees for using city building land 50% expenses for communal services shall be entitled to deduct the rental price of land in relation to the number of newly employed

workers

Releases 50% of Property Tax for new users of the Zone

Releases 30% of the corresponding part of the Tax on salaries of workers employed in manufacturing companies which employ 200 or more employees.

Benefits from local municipality

Page 23: What the Free Zones are?

Logistic and IntermodalityIn Serbian Free zones

Page 24: What the Free Zones are?

Law on Spatial plan of Serbia from 2010 to 2020 (Official gazette RS 88/10) http://www.rapp.gov.rs/media/zakoni/Zakon_o_prostornom_planu_RS-cir.pdf support all Free zones location for construction of intermodal terminals and recommend all free zone in view goods flow generators in article 327. Intermodal transport and logistic centers (page 272 in Law)

Strategy for development of rail, road, water, air and intermodal transport in Republic of Serbia from 2008. to 2015 (Official gazette RS 55/05, 71/05 i 101/07) http://www.putevi-srbije.rs/strategijapdf/Strategijatransport_lat.pdf in article 4.2. Guidelines for the development of intermodal transport (page 39) in accordance with EU guidelines are given for the consideration of locations (11 conditions) and define the necessary infrastructure (7 conditions) – recommend terminal location in Free zone

Free zones and Logistic in RS

Page 25: What the Free Zones are?

Use of EU Model and Grants for construction

Page 26: What the Free Zones are?

New project – Intermodal Logistic Terminal on the Corridor X – Free zone Pirot

Page 27: What the Free Zones are?

www.usz.gov.rs

Zоrаn Vučić, pоmоćnik direktora

Теl.: 011/311-73-93, [email protected]

Uprаvа zа slobodne zоnе, Оmlаdinskih brigаdа 1, 11000 Beograd

Теl.: 011/311-73-26, 011/311-73-27, Fаx. 011/311-73-88