Just Results

Report: Serbia

Report

How Serbia made a 20-agency procedure one of the fastest in the world

Communism, two wars in the 1990s, and the late adaption of liberal economic reforms were compounded by the 2008 global financial crisis, leaving Serbia struggling economically. Serbia’s notoriously difficult investment climate didn’t help as the country tried to recover from the recession. Only since 2014 has an aggressive reform agenda begun to yield results.

 

Source: World Bank

Source: World Bank

 

Serbia's Doing Business ranking increased dramatically over a three-year period 2015-2017


Serbia’s first major improvement in investment climate was with starting a business.

In 2005, there was no unified registry of all business entities in a single place, with courts handling the registration of companies and municipalities handling the registration of sole proprietors. This fragmented system made it impossible to ensure multiple companies did not register with the same name and there was a general lack of consistency in how procedures were enforced. One lawyer reported, “I had to file the same form to the same court in 15 different ways depending on what judge handled my registration.”¹

Reforms creating an online business registry and streamlining the procedure were implemented and by the next year the time it took to start a business dropped from 51 days in 2004 to 15 days in 2005 and business registrations skyrocketed 70%.² In 2009, further reforms created a streamlined one stop shop for business registration, registering for tax, and registering for social security. In 2013, Serbia eliminated the paid-in minimum capital requirement.

 
¹ Miriam Bruhn, et. al. “Courts and Business Registration Evidence from Serbia,” Policy Research Working Paper 8611, October 2018. View
² Miriam Bruhn, et. al. “Courts and Business Registration Evidence from Serbia,” Policy Research Working Paper 8611, October 2018. View

Even more stunning than the improvements in the business registration procedures, has been the rapid improvement in dealing with construction permits.

Source: World Bank, Khan (2017)

In 2011, 78% of Serbian businesses identified dealing with construction permits as one of biggest obstacles to doing businesses in the country.³

 As recently as 2014, Serbia was ranked 186 of 190 for the Doing Business dealing with construction permits indicator, with businesses needing to deal with up to 20 different agencies over a 289-day period.⁴ 

Rapid reforms implementing 170 one-stop shops in local governments (2015) and a mandatory e-Construction Permitting System that connects user information with all involved agencies through a single window (2016), led to dramatic improvements.⁵

By 2016, the number of days required dropped by more than half and the construction permit score for Doing Business dropped from 186 to 36. By 2018, it improved further, making Serbia 10th globally for dealing with construction permits.

³ Sherry Khan. “Building a Better Business Environment in Serbia through CLA,” 2017. View
⁴ Dusan Vasiljevic. “eConstructionPermitting System in Serbia: A Reform Taken by Storm”
⁵ Dusan Vasiljevic. “eConstructionPermitting System in Serbia: A Reform Taken by Storm”