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The Government of the Republic of Serbia

In the service of citizens

€ 5.22 million from NIP to encourage direct investments

Belgrade, 20 July 2007

Serbian Minister of Economy and Regional Development Mladjan Dinkic signed today contracts with 18 domestic and foreign companies on distribution of non-repayable funds to encourage direct investments in Serbia.

Dinkic told a press conference that a sum worth €5.22 million is to be set aside from the National Investment Plan (NIP) for that purpose, and pointed to the fact that the realisation of these contracts will allow total investments worth €150.6 million in 16 municipalities of Serbia, as well as the creation of 2,535 new jobs.

He explained that non-repayable funds were given with banking guarantees, which means that if one of the 18 companies is bound by the contract to employ 300 new workers, and it employs 200, then it will be required to return the balance of the funds it received.

These are incentives for greenfield investments and for construction of new factories, the Minister said and announced that the Serbian government's incentives of €1,000 per new employee will be increased to €1,200.

The Ministry's aim for the upcoming period will be to attract to Serbia renowned makers of cars, high technologies and electronic components, Dinkic said and added that construction of first production plants will begin during summer, while they should be opened next year.

He said that some of the plants have already been opened as part of the plan for the last year and that is Henkel's factory in Indjija.

The Ministry of Economy and Regional Development aims to reduce the rate of unemployment by half, explained the Minister, and said that one of the ways to do that is to attract Greenfield investments, in which regard the current year will be crucial for reducing unemployment.

He added that the companies to whom the funds have been given will employ more people if their business meets with success.

Dinkic stressed that today the competition for the fourth cycle was announced which will last until September 14, and added that by the end of the year one more competition will be held for distribution of funds, and contracts for distribution of non-repayable funds worth €30 million will be concluded.

Non-repayable funds were distributed within the framework of the third cycle of the programme for encouraging investors which is being implemented by the Serbian Investment and Export Agency (SIEPA), on the basis of the Decree on conditions and manner to attract direct investments.

The commission approved 18 applications, of nine domestic and nine foreign companies.

The contracts were signed with companies Srb from Belgrade, Rauch Serbia, Valy, Sto posto, Steel Mill, Golden garden, Izoterm-Plama, Moeller Electric, Dunav, Ponteks, Slovan progress, Gruner Serbia, Avis, Elrad Serbia, Nives, Vega-Regulus, Subeks and Fiorano.

Investments will be realised in Sremska Mitrovica, Grocka, Selenca, Lapovo, Indjija, Nova Crnja, Doljevac, Velika Plana, Koceljeva, Sombor, Coka, Valjevo, Novi Pazar, Subotica, Ruma and Vlasotince.