The inflation rates are high, the interests on bank deposits are low, the stock markets are affected by the current political crises in different parts of the world, and cryptocurrencies are too volatile. Where should you invest to protect your assets from devaluation? The answer is real economy. What country offers the most attractive investment opportunities? There are several such countries, of course, but if you are considering the European continent, we suggest that you should take a look at Serbia.
Sitting in the Southeast of Europe, Serbia offers various opportunities to foreign investors. The local Government is extremely supportive because Serbia is only a developing country: its history of independence is short by history standards. The local market is open and the investment options are plentiful. Below we discuss the main business areas that may be of interest to foreign investors wishing to put money into Serbia.
Real estate in Serbia
Real estate in Serbia is an attractive investment object for foreign entrepreneurs. The demand for real property has been on the rise especially in such large Serbian cities as Belgrade, the capital or the country, and Novy Sad, a center of modern technologies and the second most popular tourist destination in the country. The price range is broad indeed. You can buy a piece of property for a few dozen thousand euros or you can invest millions. The liquidity is high and the expected profitability is 5% to 10% per year.
According to Serbian and international real estate agents, the market has been reviving at an amazingly fast rate after the pandemic. Naturally, sales dropped during the lockdown but now they have picked up again. It is important to note that prices as well as the number of purchase deals in the Serbian real estate market had also been steadily growing before the pandemic started. Therefore, it has been a long-lasting tendency with a single downfall that occurred due to force majeure circumstances.
Why purchase property in Serbia?
One of the main characteristics of any investment object is its liquidity. If you have real property in Serbia, you can sell it quickly because the demand is high. The demand is also high for rental property so if you have an apartment or two in a popular area, you can have a stable monthly income (the rent is paid monthly in Serbia). Belgrade is probably the primary city in Serbia that you should consider if you would like to invest in apartments for rent.
Buying an apartment in a house under construction is one more attractive investment opportunity. Even though some time will have to pass before the building is completed, the price of the apartment is going to be significantly higher when the construction process is over in comparison to the one that you paid when buying it.
Is a foreign national entitled to buy real estate in Serbia?
Foreign nationals are allowed to purchase real property in Serbia if the reciprocity principle is observed. This means that if Serbian citizens are allowed to buy property in a foreign country, citizens of that foreign country are allowed to buy property in Serbia.
More and more foreigners are relocating to Serbia because the balance between the cost and the quality of living in the country is highly beneficial. It’s comfortable enough and it’s inexpensive enough. Most foreign nationals choose the cities of Belgrade and Novy Sad for residence.
Apart from being a safe investment object, a house or an apartment in Serbia gives the owner legal grounds for acquiring a residence permit in the country. Having a Serbian residence permit is mandatory if you would like to apply for a work permit here.
Purchase of real estate is probably the most attractive of all investment opportunities in Serbia. At the same time, it is far from being the only such opportunity. You can also consider some other business areas where you could invest, especially in view of the fact that some of them offer a higher return. We dwell on them briefly below.
Manufacture and export
The industrial sector in Serbia is well-developed and the country exports many items. An investment into manufacture of automobiles, electronics, and food products can prove especially lucrative. Investing in manufacturing usually requires a large amount of capital but some small-scale projects are also possible in Serbia. The liquidity of the property will depend on its nature and the profitability can be from 5% to 15% a year or even more.
Serbia offers a great number of opportunities to tourists including historic sites, natural parks, resorts, and wild nature. Investing in hotels, restaurants, guided excursions, etc. can be promising. Serbia is not the most popular tourist destination in the region but the inflow of tourists is increasing as the tourist infrastructure is improving. The scale of the business can be extremely different: you need a few million euros to build a luxury hotel and you need a much smaller amount of money to start offering guided excursions. Liquidity can be high especially if the investment object is located in a popular tourist area. Profitability can be at 10% or more.
Climatic conditions are simply perfect for agricultural production in Serbia. The agricultural sector is one of the pillars of the local economy. Investments into agriculture in Serbia can bring good profits especially if you grow grains, fruits, and vegetables. A small farm does not require too much investment capital while a large agricultural enterprise does. Liquidity can be low but the profits can range between 5% and 15% a year or even more if your agricultural company is successful.
Serbia has a great potential for developing renewable energy sources, windmills and solar stations in particular. One of the Government’s policies is making Serbia less dependable on non-renewable sources of energy. For this reason, investments into ‘green’ energy can find Government support in the country. Understandably, if you want to build windmills, the required investment amount is going to be high. Liquidity is high if the power plant is efficient and profitability can range between 6% and 12% per year.
Serbia is becoming more and more popular with investors into informational technologies. A favorable business environment, the availability of qualified personnel, and comparatively low costs of company maintenance attract large IT companies and smaller investors from other countries to Serbia. Various forums, exhibitions, and other IT-related events regularly take place in the country. If you are a skilled software developer, Serbia could be a perfect option for you. The fiscal burden is low in the country, the IT community is strong so you can always ask for advice, and an IT startup does not require large investments. At the same time, your profit margin can be much higher in the IT sector in comparison to most other business areas. Your profits can be between 10% and 20% per year if you invest in successful projects.
Investing into the Serbian financial sector may also be an option to consider. The banking system is stable in the country, and the securities market is developing dynamically. You can consider the opportunity to buy shares of local banks or investment funds. One of the positive sides that this investment option has is that you can spend as much money as you wish: a small sum or a huge sum. Liquidity is high in the financial sector especially if you invest in securities. As everywhere else, you can lose money or become rich if you invest in securities in Serbia. In a normal scenario, the return on investment can be between 5% and 15% per year.
Serbia offers a great number of investment opportunities indeed. Understandably, you need to do market research and obtain professional support before you can choose the most appropriate investment object in Serbia.