Micro and small companies earned less but employed more
In Serbia, 14,309 small enterprises and 93,573 micro-sized companies submitted financial reports to the Serbian Business Registers Agency in 2023. While small enterprises saw a 6.6% annual growth, the number of micro companies actually decreased by 2.6%.
In the total number of business entities in the country, small enterprises account for about 12.5%, while micro-enterprises contribute approximately 82%.
It is important to note that small enterprises significantly contribute to employment in the country, as a total of 332,928 people worked in them in 2023. This represents 14.1% of the total workforce as of December last year, according to official data from the Republic Statistical Office. However, this is also 2% less than in 2022, a concerning statistic.
Problems Solvable, but Slow
Small and micro enterprises are quite widespread in Serbia – both in number and in operation across various regions of the country – but the level of protection and support available to them is not always on par with that in the European Union.
Although these businesses often form the backbone of the local economy and contribute to employment and economic development, the legislative and regulatory frameworks in Serbia are not always sufficiently tailored to the needs of small businesses. Compared to the EU, where there are specialized programs and policies for supporting small and medium-sized enterprises (SMEs), businesses in Serbia often face more complex administrative procedures and limited support resources.
Despite some support programs existing, they are not always as developed or widely available as in the EU. Perhaps the biggest obstacle to business stability and potential growth is the tax policy, which many perceive as particularly restrictive for the development of small and micro companies.
This issue was specifically addressed this year by the Foreign Investors Council in its White Book and the National Alliance for Local Economic Development (NALED) in its Grey Book. They presented recommendations to the Ministry of Finance for changes in the tax system to remove administrative barriers and improve the business environment in Serbia, especially for businesses of this size.
For example, NALED proposed reducing the burden on the lowest wages and regulating the control of value-added tax (VAT), including prescribing a shorter period for VAT refunds to non-exporters from the current 45 days to a maximum of 25 days.
Business Performance of Small Enterprises
In 2023, domestic small enterprises had assets valued at 4,073,178,913,000 dinars, with an annual growth of 5.1%. Their total revenue amounted to 3,961,256,399,000 dinars, reflecting a year-on-year decline of 1.3%, although this was slower than the decline in expenses, which fell by 2% to 3,725,403,227,000 dinars.
The Best Among the Most Successful
The traditional annual ranking of the 99 most successful small enterprises in Serbia by the Biznis.rs portal this time has a new champion – the Belgrade-based company MCM 965, which, according to its description, is engaged in retail trade outside stores, stalls, and markets. This further highlights the evident success of trading companies last year, which was already visible in the rankings of the best large and medium-sized companies.
MCM also recorded the highest total revenue among all ranked companies – 5,499,182,000 dinars.
Last year’s top-ranked company, Zlatara Gold, now holds eighth place.
The biggest winner is the Zemun-based company Link Group d.o.o., which deals with renting and managing owned or leased real estate, with 912,324,000 dinars at the end of 2023. It also ranked second overall.
The top 99 most successful small enterprises in Serbia in 2023 generated 146.18 billion dinars in revenue, with 11.69 billion dinars in profit and 1,965 employees.
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