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Outsourcing in Serbia and its potential

Why outsource to Serbia?

Serbia is one of the most attractive outsourcing destinations in Eastern Europe.

The country is not big, but still has much to offer to customers abroad, for more than a decent price (Serbia is not a member of the European Union) .

More powerful countries are using this and moving their operations to Serbia.

n  Key drivers to outsource to Serbia

Key drivers to outsource to Serbia:

n  location convenience,

n  transport infrastructure,

n  low production cost

n  experienced (relatively cheap) workforce, (high technical, mathematical and language skills)

n  cultural affinities

Serbia’s relatively low employment costs, strong links with Western economies and increasing number of university graduates make it a worth while market to invest in

(US-British consultancy PMR Consulting)

n  Low Overhead Costs

Operating business costs are lower than in other CEE countries.

n  Tax system is highly favorable to investment - one of lowest corporate profit tax rates of 10%

n  Labour cost in Serbia is less than half the level of East European EU member-states.

n  Low utility costs, additional strong factor in achieving high profit margins.

n  Lower costs for educated and skilled reliable staff.

n  Strategic Geographic Location

n  Close distance to major European centres gives Serbian outsourcing staff a significant mobility.

n  Strategic transport corridors No. 10 and No. 7, connect the country with the rest of Europe and with the Middle East.

n  As part of the CET time zone (GMT+1), Serbian outsourcing companies usually do not experience well-known problems with difference in working hours. Clients from the USA also appreciate 4h overlap of working hours with the East Coast.

n  Human Resources

n  Serbian workers have a long history of cooperation with foreign companies, especially from the western world.

n  An educational system generates fast-learning, multilingual, IT-literate people.

n  GfK Research survey (2007) shows that 48% of the population at least understands English; 31% are able to hold a conversation,

n  IT sector is one of the fastest growing segments of Serbian market mainly due to the quality of staff and considerably lower rates per hour.

n  Cultural affinity

n  The people of Serbia have a strong understanding of the other cultures, both on a personal and business level. It makes the communication a much more pleasurable.

n  Serbia is part of the European cultural heritage, thus it share the common cultural space with the Western Europe, UK, USA, Australia or Canada.

n  Attractive Investment Incentives

Foreign investors can benefit from a number of investment incentives offered for opening new jobs.

n  a package of tax incentives and breaks to encourage high profit rates and easy start-up.

n  Services in Serbia are not subject to all-European VAT due to country’s absence from the EU membership.

n  Booming Market Potential

n  Since 2001 Serbia hosted the largest Greenfield Investments in SEE Region as awarded by OECD.

n  Overall duty-free exporting potential is over  1 billion consumers.

n  Serbia is the only country, apart from the Commonwealth of Independent States members, which has Tax-Free Trade Agreement with Russian Federation.