Serbian delegation discusses business opportunities

BUSINESS investment opportunities in Serbia- Montenegro were yesterday the focus of a seminar organised by the Cyprus Chamber of Commerce and Industry (Keve) as part of a delegation from the country's contacts in Cyprus.

The delegation - on a two-day visit, which continues today - is headed by Dr. Predrag Ivanovic, Minister for International Economic Relations of Serbia-Montenegro, Predrag Bubalo, Minister for International Economic Relations, Velimir Ilic, Minister of Capital Investments, Bojan Dimitrijev, Minister of Trade Tourism and Services, the Director of the Investments and Export Promotion Agency, chamber officials and company representatives.

Speaking at the seminar Commerce Minister Yiorgos Lillikas said: "Events like this, are extremely useful for achieving our common goal, to develop further our relations in the economic, trade and other business and social fields."

Established

Noting that Cyprus was established as an international commercial, financial and services centre, Lillikas said: "A large number of non-resident individuals and corporation have been quick to spot and exploit business opportunities offered in Cyprus.

He continued: "I would like to assure the participants in this event that the governments of Cyprus, Serbia and Montenegro are firmly committed towards assisting and encouraging mutually beneficial activities and projects."

Lillikas also called on the countries' chambers of commerce and industry and professional associations to intensify and coordinate their efforts in bringing the two business communities closer together.

In his address, Ivanovic said that Cyprus had demonstrated the importance it attaches to the intensification of economic cooperation with his country by organising the conference.

He said that an exchange of views the two countries' trade, economic, industrial and other relations "will, inevitably, broaden existing links and open the way to further development of our overall economic cooperation."

Importance

Ivanovic noted the importance of free trade agreements in the region of Southeastern Europe and Serbia-Montenegro's joining in the process as part of efforts to join the World Trade Organisation (WTO) and EU.

He said that these agreements led to the liberalisation of agricultural and, particularly, industrial products: "Depending on the structure of trade with the country in question, 50-80% of tariff positions are covered by the free trade regime." Other, more sensitive, products, he said, would be liberalised more gradually but over a period of no more than six years.

Ivanovic said that Serbia-Montenegro's total trade had declined for five years in a row by 2003 but that there was particular potential in the field of investments in development projects in Cyprus, financial and banking cooperation and cooperation in the sectors of tourism, science and technology.

"Our companies show interest in being included in development projects in Cyprus," he said, adding that great interest was attached to the attraction of Cypriot capital towards the reconstruction of his country's' infrastructure and economy.

Sanctions



"Our economy, due to sanctions and war, has been brought down to the lowest level of competitiveness. However, our qualified human resources, geographical position and rather long history of an open market economy, present potential advantage for foreign investors," he said.

On his part, Bubalo said that this year had seen growth of 8% in Serbia and that the country was keen to attract foreign direct investment.

"How do we do that? By removing administrative and non-administrative barriers, creating an environment which will make Serbia a regional investment destination. Foreign direct investment investment is not only important for capital input and creating new jobs, but also for the transferring of know-how and professional expertise from developed market economies," he said. Bubalo also said that foreign direct investment was also the best way for economic restructure, the development of new technologies, products and brands leading to higher value added products.

"Serbia has a favourable geopolitical position," he said: "It is situated at the crossroads of two pan-European transportation corridors, Corridor 10- highways- and Corridor 7- the Danube River."

Other incentives for investment in Serbia include the country, Bubalo said: "(having) the lowest corporate profit tax rate in Europe (10%,) the implementation of VAT from January 1, 2005 with a general rate of 18% and a lower rate of 8%, a tax holiday for a ten-year period, tax relief for the hiring of new employees, tax credit of up to 40% or the investment amount of additional investing in fixed assets, the abolishment of income fund tax and the the import of in-kind equipment and raw, semi-finished and component parts being exempt from customs duties."

Valuable

He said: "Serbia is the land of valuable human capital. Human resources are highly skilled and educated with widely spoken foreign languages of English and German. In spite of this, wages are very low with an average net salary of 185 Euro."

Serbia has also adopted a Law on Concession which provides concession length of up o 30 years in a transparent and efficient procedure: "There are many areas where concession can be granted," Bubalo said.

Keve chairman Vassilis Rologis welcomed the seminar and delegation visit as part of continuing excellent relations between the countries, as the Serbia-Montenegro's Ambassador to Cyprus.

Dimitrijev, meanwhile, also made a short presentation on potential tourism-linked investment opportunities in Serbia-Montenegro, encouraging interested parties to contact him directly to find out more.