Category: NEWS
Will the lack of affordable labour make foreign investors leave Serbia?
There is a tendency for foreign investors to leave Serbia in recent years.
For example, the Benetton factory in Niš will be closed by April.
Receiving significant state subsidies is a common feature among many of these foreign investors. This situation has various reasons, but the crisis in the automotive industry in Europe and in the world is certainly one of the most prominent.
Relocation to other countries with more favourable business conditions could be another reason why foreign investments are withdrawing from Serbia.
As Milorad Filipović, a professor at the Faculty of Economics in Belgrade, says, Benetton operates in a low-margin and low-profit sector. He adds that even 20 years ago all production was taking place in Asia (Pakistan, Sri Lanka, Vietnam), while in Italy, only strategic development, product design, finance, and high-level management were based, so Serbia may have been an attractive location for Benetton more than a decade ago because of the financial incentives it received and due to the low labour costs and generally low unit production costs, such as electricity and utilities. Nowadays Serbia has stopped being a country with an abundance of cheap labour. Unit production costs have increased making Serbia’s competitiveness in investment sectors such as textiles, footwear, and other unprofitable industries significantly decline.
Serbia’s heavy reliance on Western countries’ automotive industry is another reason why some investors are leaving the country.
Filipović explains that the forced “transition” to more expensive energy sources and the severing of ties with Russia are the main causes of the automotive industry crisis in Europe.
According to economist Aleksandar Stevanović, companies can fail, emerge, merge and relocate in any business. The time for investments attracted ten years ago when Serbia tried to employ poor classes has passed.
As the Mayor of Niš, Dragoslav Pavlović, has confirmed, around 900 employees will be unemployed after the closure of Benetton. A support has been promised to the affected workers by the Ministry of Economy, the Government of Serbia, the National Employment Service, and the Serbian Chamber of Commerce.
Pavlović promised that in the coming months suitable job positions in other companies will be offered to Benetton workers, as there is a demand for labour in Niš.
Pavlović stated that, as in previous years, active employment and self-employment measures will be implemented for all those who wish to start their own business, as well as for hiring individuals from hard-to-employ categories and those who are considered essential in the labour market.
The mayor promised compensation in accordance with their years of service and assistance to Benetton workers in registering with the National Employment Service.
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Read moreWill foreign investors start leaving Serbia because we no longer provide affordable labour?
Although government officials often brag about the arrival of numerous foreign companies in Serbia, it is noticeable that in recent years, foreign investors have been leaving the country in much higher numbers than usual. The Benetton factory in Niš has informed workers that production will be shut down by April, without providing any specific information […]
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Read moreSerbia issued around 79,000 work visas last year
According to Marko Đurić, Serbia’s Minister of Foreign Affairs in the caretaker government, the country issued around 79,000 work visas last year, that shows a significant facilitation of the domestic labour market.
A statement from the Ministry of Foreign Affairs reports that he presented Serbia’s economic results and investment potential at a roundtable in The Hague, where representatives of Dutch companies came together.
Serbia is a small country, but open to economic investments and business cooperation and investing heavily in the IT sector. It could maintain consistent and stable economic growth.
Serbia has free trade agreements with China, Egypt, the UAE, and many other countries, while also having access to the European market, where it conducts the largest volume of trade.
Good political and economic relations with South American and African countries and a strategic dialogue with the United States were also mentioned by the Minister.
Nevertheless, the EU is still Serbia’s most significant foreign trade partner and the primary source of foreign direct investment, with Serbia being the leading trading partner of the EU in the Western Balkans.
Residence and work permits have been digitalized.
The Office for IT and eGovernment announced in a separate statement that they had approved 41,319 applications for a Unified Permit for temporary residence and work of foreign nationals in the first year of operation of the Foreigners’ Portal in Serbia.
Dr Mihailo Jovanović, the Director of the Office for IT and eGovernment, said that they issued 3,004 unified permits in the form of a biometric document in card format in January 2025 alone. He added that the process for foreign nationals wishing to live and work in Serbia has been significantly simplified and accelerated by the establishment of the Foreigners’ Portal.
Foreign nationals or an employer on their behalf can submit an application for a unified permit exclusively online via the Foreigners’ Portal.
If the application is submitted independently by a foreign national, an account on the Electronic Identification Portal (eid.gov.rs) is necessary. An employer or a legal representative also needs a registered account on the eGovernment Portal (euprava.gov.rs) as a legal entity to submit the application.
It is also possible to submit applications for a Type C visa, which allows stays of up to 90 days and is issued for tourism, business, and other travel purposes, permitting single, double, or multiple entries into Serbia, and for a Type D visa, which allows stays from 90 to 180 days and is issued for employment, education, or family reunification purposes, on the Foreigners’ Web Portal.
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