Serbia Plans To Set up 15 Free Economic Zones Over Next Two Years - Media

Free economic zones will be established in Uzice, Kragujevac and Sabac by the end of 2009 or the beginning of 2010 at the latest, b92 (www.b92.net) quoted State Secretary at the Finance Ministry Miodrag Dzidic as saying earlier this week.

A free zone in Tutin, in southwestern Serbia, is also under consideration as the location is of interest to Turkish investors.

During a recent visit of Chinese government officials to Belgrade the guests were assured that Serbia's capital would open a free economic zone of its own if there is interest on the part of Chinese businesses, Dzidic said.

Serbia has four free industrial zones: in Pirot, Novi Sad, Subotica and Zrenjanin.

Exempting businesses that opt to set up shop in one of the country's free economic zones from customs duties and taxes was not a strong enough incentive, b92 quoted the Director of the government's Free Economic Zones Administration, Vlada Gajic, as saying.

The draft strategy for the development of free economic zones through 2015 contains several proposals that address this issue, Gajic said.

The strategy proposes that the central government and local authorities split the cost of the infrastructure needed for the launch of a free economic zone. It is also suggests to lower profit tax for start-up businesses based in a free economic zone that export 90% of their output.

Serbia currently levies a flat profit tax of 10%.