The investment climate in Serbia has slightly improved in recent years, but challenges remain, including bureaucracy, corruption, inefficient state-owned enterprises, a large informal sector, and an inefficient judiciary. Political influence is also a concern.
Positive aspects include financial stability, fiscal discipline, and EU-supported reforms. Engagement with the IMF and prudent fiscal policy have contributed to solid macroeconomic conditions. Serbia’s debt-to-GDP ratio remains below 50%, and in October 2024, S&P upgraded Serbia’s credit rating from BB+ to BBB- with stable outlook.
American investors generally view Serbia positively due to its strategic location, skilled workforce, competitive labor costs, generous investment incentives, and free trade agreements with the EU and other markets. Equal opportunity policies are also praised.
Concerns include political influence, exemplified by the government halting a lithium extraction project after protests in 2022. EU-backed reforms continue but are sometimes slow or inconsistent. Digitalization efforts in government functions, such as construction permits and the tax administration, have yet to yield significant improvements.
The government is gradually addressing inefficient state enterprises, planning to privatize 43 more companies while reducing the public sector workforce. Corruption issues, highlighted by a canopy collapse in Novi Sad that killed 16 people, have fueled large student-led protests. The government claims ongoing protests negatively impact the economy, while critics accuse authorities of using intimidation, arrests, negative media portrayals, and deportations.
Hosting EXPO 2027 is seen as a potential opportunity for U.S. companies providing equipment and services. Serbia’s economy was initially minimally affected by Russia’s invasion of Ukraine, but inflation peaked at 16% in March 2023 before falling to 4.5% by February 2025.
The report also notes U.S. sanctions: in April, OFAC listed 30 Serbian companies and 20 individuals, and sanctions on state oil company NIS have been repeatedly delayed, most recently until October 8, 2025.
