Why invest (and live) in Serbia?

As a finance professional from Serbia, I often get questions such as why to invest in Serbia, how to do business in Serbia etc.

Many investors are sceptic about Serbia. They struggle to find compelling story why to invest (and in some cases live) in Serbia. ?

They worry about bureaucracy, decreasing population (and therefore decreasing customer market), economical risks, politics and geopolitics…

If you belong to this group of worried ones, this text is for you.

In this text I will provide you with different perspective on business opportunities in Serbia.

Why some foreign investors struggle in Serbia?

Many multinational brands and franchises have already made success in Serbia, but not every story is a success story. Although all successful businesses are alike, while all unsuccessful businesses are unsuccessful in their own way, one reason for failure is dominant.

Some businesses fail to localise themselves – Serbian market is not only different comparing to developed markets in size. It is not just that Serbian GDP (as well as GDP per capita) is many times smaller than for example the Dutch, Swiss or Belgian… Serbian market is different in its qualities – the workforce and business partners are different, the customers’ mentality is different, government acts differently to businesses. ??

Many investors come to Serbia with the same approach they would have in approaching larger and more developed market. ?By doing that, they cannot achieve economies of scale, especially if they are focused only on the local market. Businesses could struggle especially if they are B2C. There was a story in the newspapers about the multinational beer producer being confused with decreasing market size – everything was the same as in Western Europe where market is increasing, but one factor. Population is decreasing.

Because of all these issues, foreign investors should consider adapting their strategies.

Different approach in investing in Serbia

We talked about difficulties in investing in Serbia, which you may have already heard of.

Let’s now see the advantages.

Serbia can be an excellent location for creating export oriented business.

Start – up costs are much lower in Serbia:?it is much cheaper to launch tangible product or software or web – site, develop a marketing campaign, hire skilled people. You can also acquire high quality resources in some industries (e.g. agriculture - distinct types of food and drinks).

The plus is you can achieve more with less. You will invest much less and investment risk is lower from that point of view.

What is the minus? If you compare Serbian company to companies from larger countries, you may lack size in terms of resources - number of employees, value of invested assets, production inputs purchased etc. It can be challenging to achieve volume, especially since domestic market is small.

But, small does not just look more romantic. As famous author Nassim Taleb says it:

‘’Small is Beautiful – but Also Less Fragile’’

Smaller systems can more easily adapt to Black Swans and other random significant events. And we were full of such events in last 3 years. Large companies can sometimes look like dinosaurures, too bureacratic and inflexible.

You can use your lack of size to your advantage. You can target regional and global market niches, specialise, and customize your offer. Make your offer exclusive and tailor – made.

Living in Serbia – Serbian dream concept

As you do business in Serbia, you could start to see benefits in your personal life. You may enjoy socialising with local business partners and employees. You may enjoy local lifestyle: food, drink, people’s hospitality, pleasant nature and historical heritage. Even if you spend time in Belgrade, Serbian capital, which has many qualities of metropolis, you will also feel the authenticity which cannot be felt in larger cities.

With some effort and luck, you can achieve Serbian dream – earn higher income from abroad, but have Serbian expenses and life style. :)

Business mindset for Serbia

To conclude, you would need to have different business mindset for Serbia. Accept that Serbian market is different than the developed one and use it as a competitive advantage.

Use Blue Ocean approach: find new market spaces, identify new demand. Think about what opportunities your competitors fail to recognize.

After you identify new market space, new market niche, be the No. 1 in it. Do not settle for less.

Doing business in Serbia requires specific mindset,?the one of Julius Caesar:

‘’I would rather be first in a village than second in Rome.’’

This is the business reason I am still here, unlike many of my compatriots. It is much more personally rewarding to aspire to become a leader, not another brick in the wall. Especially at a place you feel as your home.

How can I help you?

Me and my colleagues from WTS Serbia are able to assist you in finance matters from the start – up phase to eventual exit phase of your business.

First, we can work with you on your business plan – let’s see if your business model makes sense. We would also take a look at your possible tax and legal risks and opportunities.

In the meantime, we can organise all administration activities to formally set up your business (company establishment, opening bank account etc.).

As you develop your business, we can take care of your business books, either as a help to your accountant or we can keep them ourselves.

We can help you structure your business and your transactions so you can optimize your taxes and minimize risks.

If you require external funding, we can identify grant opportunities, value your equity and intangibles and help you in negotiation with the investors. And in the end, we can help you sell your business, if you decide to exit.

Feel free to contact me if you have any questions regarding doing business in Serbia. In addition, if you are interested, I would be more than happy to help you understand Serbia, its people and culture. :)