The Minister of Economy and Entrepreneurship of the Republic of Srpska, Vojin Mitrović, said that compared to the adjacent countries, the Republic of Srpska offered investors the best conditions for doing business: EU proximity, intensive infrastructure development and tax reliefs.

Mitrović said that the institutions had to show what Srpska offered to potential investors and which areas were currently investment-worthy, namely energy, agriculture, tourism and infrastructure, with the last one raising great interest.

– Srpska is close to the EU, but without appropriate infrastructure it will not have the position it occupies. No one will come here if we have no road, rail and air traffic developed to a certain level – he pointed out.

Mitrović stated that Srpska currently had about 120 kilometers of motorways, also Corridor X, closeness to Serbia, a motorway under construction to connect Srpska with the Belgrade-Zagreb motorway /Bijeljina-Rača/ and Bijeljina with Banja Luka.

– I expect the next year to bring removal of bottlenecks, such as the access roads from the Croatian side to the new border crossing near Gradiška – he said.

SRPSKA OFFERS TAX RELIEFS TO INVESTORS

Mitrović noted that Srpska also offered investors tax reliefs – the aggregate rate of payroll taxes and contributions at 31 percent, corporate income tax of 10 percent, and no tax on dividends.

– Personal income tax is eight percent, value added tax is 17 percent. In addition, electricity price, which is one of the most significant costs for many business entities, is by far the lowest compared to adjacent countries, and Srpska has a qualified workforce – stated Mitrović.

He said that the proximity of the EU was a good opportunity that Srpska should benefit from, because large companies needing products from Srpska had the possibility of supply from relatively close locations, which meant lower costs, fast delivery and cheaper labor.

– And that is what we utilize. Foreign investors contact us, they want to come here and open their plants – added Mitrović.

According to him, the Ministry drafted three new decrees relating to incentives in the past year.

– The decree on investments of special interest for major foreign investors implies subsidies for investing up to five million BAM and employing 50 staff in underdeveloped and extremely underdeveloped areas, i.e. local communities. For medium and highly developed local communities, the requirement is about BAM 10 million investment and 100 employed staff – specified Mitrović.

He said that for potential investors, the Republic of Srpska participated with subsidies of up to 30 percent, Srpska’s participation for a BAM 10 million investment being three million BAM.

In addition to these benefits, Mitrović stated, the Republic of Srpska paid payroll taxes and contributions for two years provided that the salary is higher than the average in Srpska.

– During the year, the Ministry also adopted amendments to the decrees relating to direct investments, where we stimulated investments in new technologies, innovations, digitization and automation of the production process. This is important for the economy of Srpska to be more competitive with the EU with its products – Mitrović said.

He noted the adoption in 2023 of the Law on the Production of Weapons and Military Equipment of Srpska because it was one of the areas that had not been defined at the Entity level, and of the Company Law, which had streamlined the operation of companies, but also protected the securities market.

IN 2023 BAM 15.5 MILLION TO SUBSIDIZE SALARIES

Concerning subsidies for salary increases in Srpska, about BAM 62 million had been invested from 2019 to 2022, and BAM 15.5 million was provided in 2023.

– Concerning incentives for direct investments, about BAM 22 million had been set aside from 2019 to 2022, and they amounted to about BAM 14.5 million for 2023. This illustrates sufficiently that many business entities are interested in the incentives, which are primarily intended for improving the technological level of the production process, increasing the competitiveness and productivity of the economy – stated Mitrović.

He added that 233 business entities had received this type of incentive in 2023.

– These 233 companies annually generate a total revenue of BAM 2.3 billion. The line ministry and the Government of Srpska have incentivized projects worth BAM 100 million with BAM 14.5 million – Mitrović noted.

He further said that technological process improvement required an educated workforce, so it was very important for the Ministry of Education and Culture to adapt the educational process to the labor market, and added that there was a direct connection also with the Ministry of Economy and Entrepreneurship in that.

Concerning the state of the economy in 2023, Mitrović stated that the conflict in Ukraine had had a significant impact on economic trends both in the EU and the world, with the needs of the Union, on which Srpska relies, declining by 20 percent.

– Concerning process manufacturing, we have issues with a decline in one part of the sector, while in the metal processing industry we have greater needs that are currently difficult to meet – said Mitrović.

Source: RTRS – SRNA

Photo: Ministry of Economy and Entrepreneurship