The new Serbian Investment Law, passed in November 2015, introduces significant novelties for investors. One novelty is that the Investment Law extends its scope to all investors, both domestic and foreign, responding to global trends and domestic demands, says Dr Milan Parivodić, LL.M. (London), Attorney at Law, Parivodić Advokati/Lawyers, former Minister of Serbian International Economic Relations
The Law sets Aims, which should be construed as legal commitments of the Republic of Serbia: improving the investment environment in the Republic of Serbia, encouraging direct investment, equalizing treatment of domestic and foreign investors, increasing efficiency of
state service to investments, and creating a more attractive business
environment for domestic and foreign investors. Therefore, all laws and subordinate legislation need to be interpreted towards realization of the said aims.
For realization and maintenance of investments the Law grants the privilige of an expedited procedure before all authorities processing administrative matters: duty of issuance of public documents to investors in shortest possible time if an investor has filed complete documentation. Monetary fines are imposed for violation of the the above duties against the responsible person in the authority. The Investment Law divides investments into two categories to
afford them appropriate treatment:
1) investments of local significance and
2) investments of special significance for the Republic of Serbia.
New bodies of state to support investors are
1) Government Council for Economic Development,
2) Development Agency of Serbia (RAS),
3) “Unit for local economic development” in municipalities, cities, and Autonomous Province.
An investor may use the Unit for Local economic development as one-stop shop for submitting to local bodies of state all documents
and collecting all permits so as to avoid multiple contacts. An investor may request formation of a Project Team for its investment, composed of civil servants relevant to the project. I suggest that the project teams are composed of those respective heads of bodies who should sign the various permits for the investment. As need be, a Project team may be established by
1) municipality or city for investments of local significance,
2) by the Autonomous province for investments for which incentive funds are provided from the budget of the autonomous province, and
3) by the Development Agency of Serbia for investments of special significance.
The job of a Project team is to provide expert assistance, information and data and the efficient granting of permits for efficient and timely realization of investments. I suggest that if the Development Agency of Serbia establishes a Project team, it should encompass also officials from local and provincial level, to make the state team complete, coherent and their activities coordinated.
The Investment Programme should be treated as the result of planning work done with the Project Team. Its purpose is that an investor has it all on paper and signed by the state which should secure a transparent investment process, reduce corruption and increase state responsibility in dealing with investors. Upon investor’s request the Investment program is drafted and signed by
1) local self-government unit and/or
2) competent authority of the Autonomous province on the one side, and the investor on the other side.
In content, the Investment programme should determine
1) all documents and dates at which an investor needs to submit them, as well
2) all permits and the dates in which all public bodies are obliged to issue them.
I suggest that members of the Project Team, who are heads of bodies due to issue respective permits, each are to sign before laying of signature by the reperesentative of local or provincial government. This would increase accountability between all actors and the benefits are obvious. Supervision over the implementation of and Investment Program is carried out by Development Agency of Serbia. An Investor has a right, not an obligation to use these services of the state. The Development Agency of Serbia is not expressly authorized in the Law to sign Investment Programmes, but It should do so in line with its elaborate statutory duties from Article 36 to help investors in various ways and in line with best practices to date of assisting major projects. If it refused to do so, it would actually violate its duties to investors under the Law.
The new concepts in the new Investment Law (extension of scope to domestic investors, expedited administrative procedure, one-stop shop, project team, and investment program) are inspired by the Bill on Investments of 2006 and draft Law on Investment Law of 2015, both of which I inspired and drafted based on years of working with foreign investors as lawyer, consultant and minister of international economic relations. My drafts were quite more elaborate and stronger in affirming investors’ rights than this Investment Law, which reflects the current political balance of interests. Yet, we continue work on securing investors’ rights both at statutory and at project-level basis. I In any case, all novelties in the new Investment Law are practical solutions aimed at improving legal security and predictability of all investments.
Therefore I commend the new Serbia’s Investment Law and look forward to its creative applying towards realizing its ambitious aims of a sustainable Serbian economy with a strong and dynamic domestic and FDI private sector.