Serbia does not have a foreign investment screening regime comparable to European regimes shaped by the EU FDI Screening Regulation. Rather, Serbia operates a single-sector authorisation system covering the defence sector.
Legal basis
The Production and Trade of Arms and Military Equipment Act (Official Gazette of Serbia no. 36/2018).
Filing requirement
A foreign investment in the field of arms and military equipment manufacturing is defined by the Arms Act as an investment of capital by a foreign investor by way of:
- establishing a company active in the manufacturing of arms and military equipment, either independently or with another domestic or foreign natural or legal person or with the Republic of Serbia;
- recapitalisation of a company active in the manufacturing of arms and military equipment; or
- purchase of capital of a company active in the manufacturing of arms and military equipment.
In this sense, a company active in the manufacturing of arms and military equipment means a company incorporated in Serbia and holding an appropriate licence to produce these items.
All transactions falling under the above criteria need to be notified for foreign investment screening and approval.
Relevant sectors
The current foreign investment screening regime in Serbia is limited to the defence sector, specifically to foreign investments in the production of arms and military equipment.
Process and timetable
Competent authority: Ministry of Defence and the Serbian Government
Mandatory filing requirement: Yes
Filing deadline: There is no filing deadline, but the process of the change of ownership over a company active in the production of arms and military equipment cannot be initiated without prior approval.
Responsibility for filing: The foreign investor is obliged to notify a foreign investment and procure its approval.
Sanctions: The Arms Act provides for penalties if a change of ownership is initiated without the required approval. The range of penalties is approximately EUR 4,200 – 6,000 (RSD 500,000 – 750,000) for companies and EUR 420 – 600 (RSD
50,000 – 75,000) for responsible individuals.
Length of the proceedings: Upon receipt of the request (by the Ministry of Denfence), the Government must issue its decision (which will be based on a proposal of the Ministry of Defence) within 120 days from the date of receipt of the request.
By Danijel Stevanovic, Partner at Moravcevic Vojnovic i Partneri in cooperation with Schoenherr
