Serbia: Government Subsidies for Direct Investments in Hotel Sector
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On 9 May 2019, the Government of the Republic of Serbia adopted a new Decree on the Criteria for Awarding Funds for Investment Projects in the Hotel Sector (“Decree”).
The aim of the Decree is to encourage investments in companies that are either starting to provide hotel services or are expanding their existing capacities. The Decree also covers the acquisition of assets directly related to a company which has ceased to operate or would have ceased to operate had it not been purchased from a third party on market terms.
The beneficiary of the funds can only be a Serbian company which is not in bankruptcy or liquidation. This does not mean that foreign investors cannot benefit from the program – they are also entitled to subsidies and can receive them through a Serbian subsidiary (existing or newly established).
An investment project for which the funds can be awarded must be worth at least EUR 2 million and must create at least 70 new jobs related to the investment.
The beneficiary of the funds must provide at least 25% of the eligible costs for the implementation of the investment project from its own funds.
The investment project and the hiring of new employees must be implemented within 3 years from the date of applying for the grants. Exceptionally, this deadline can be extended to up to 5 years.
The amount of the subsidy depends on the economic development of the municipality where the investment is taking place. The maximum amount of a subsidy per created job is EUR 7,000. This maximum amount can be awarded for projects in the least developed parts of the country.
The government body in charge of oversight of the implementation of the subsidized projects is the Ministry of the Economy.