Regulation on determining criteria for granting the incentives for attracting direct investments in automation of existing capacities and innovation  

On February 11, 2022, the Government of the Republic of Serbia issued a Regulation on determining criteria for granting the incentives for attracting direct investments in automation of existing capacities and innovation (hereinafter: The Regulation).¹

This regulation specifies the criteria, conditions, and method of attracting direct
investments in the automation² of existing capacities and innovation in high value-added industrial areas.

Maximum Allowed Asset Amount

The maximum permitted amount of funds for large⁴ companies can be determined up to 50% of eligible costs for the realization of the investment project, for medium-sized⁵ companies to 60% of eligible costs, and for small⁶ companies up to 70% of eligible costs for the realization of the investment project.⁷

The maximum permitted amount of funds that can be granted for
investments greater than EUR 50 million cannot be greater than 25% of the eligible investment costs, and for investments exceeding EUR 100 million, that
percentage cannot be greater than 17% of the investment costs and is determined as follows:

1) for eligible investment costs up to EUR 50 million – up to 50%
of those costs;

2) for a portion of the eligible investment costs exceeding EUR 50
million – up to 25% of such costs;

3) for a portion of the reasonable investment costs exceeding EUR
100 million – up to 17% of such costs.

Collaterals

The beneficiary of the funds is obliged to enclose a bank guarantee issued by a commercial bank registered in the territory of the Republic of Serbia, unconditional and payable at the first demand on behalf of the Republic of Serbia, and two registered and signed blank solo promissory notes with a signed authorization.

In case of a failure to fulfill the contractual obligations or partial fulfillment of contractual obligations, as well as in the case of failure to achieve the purpose of the investment project, the Ministry of economy, based on issued bank guarantees and blank solo promissory notes, can reimburse funds up to the amount of disbursed funds and prescribed statutory interest, may be based on issued bank guarantees and blank solo promissory notes, call on the securities up to the amount of paid funds and prescribed statutory default interest.
 

Control

The Ministry of the economy may at any time during the realization of the investment project control the amount, dynamics, and structure of the investment, as well as the purpose stipulated in the investment project, i.e. the Agreement, to control the fulfillment of the contractual obligations of the beneficiaries of the funds. 

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³ A large economic entity is an economic entity with over 250 employees and annual income over EUR 50 million or a total annual balance of over EUR 43 million

⁴ A large economic entity is an economic entity with a number of employees between 50 and 250, and annual income not exceeding EUR  50 million  or a total annual balance of EUR 43 million maximum

⁵ A small economic entity is an economic entity with fewer than 50 employees and annual income or total annual balance sheet that does not exceed EUR 10 million

⁶ When determining the amount of funds that can be granted, the cumulation with previously approved state aid is taken into consideration, in accordance with regulations governing the rules for granting state aid.