The National Assembly of the Republic of Serbia has adopted the Law on Investments (the "Law") on 23 October 2015, and came into force on 4 November 2015. The new legislative framework was prepared in cooperation with World Bank experts and is aimed to introduce the equivalent treatment of domestic and foreign investors in Serbia, an essential novelty in Serbian investment regulation.
The key intention of the Law is to promote a positive investment climate with new regulatory framework and to establish new institutions for support and control of investments.
The Law has been subject to numerous discussions and comments, with multiple working groups and stakeholders being involved in the drafting process.
On an institutional level, the Law introduces significant changes. Two existing authorities i.e. the Serbian Investment and Export Promotion Agency (SIEPA) and the National Agency for Regional Development will be closed, while one unique competent authority for the support and control of both domestic and foreign investments is to be established – i.e. the Development Agency.
The Law envisages the establishment of local units for economic development and support of investments with an investment counsel for each local unit. Also, establishing a special project team at a local level in the new legislative framework will enable any investor to obtain all necessary information concerning the documentation which has to be submitted for obtaining required permits and approvals within posed deadlines.
Depending on their character, the Law prescribes the separation of investments to local investments and investments of significant importance, with the latter being significant for further economic development of the Republic of Serbia and promotion of the Serbian investment environment.
The Law also finally does away with the rule found in the Law on Foreign Investments, whereby disputes which stem from foreign investments are not able to be submitted to foreign courts. Under the Article 10 of the Law, which our office was particularly engaged in providing comments, the parties will be able to choose for dispute resolution competence of any court or arbitration tribunal, domestic or foreign, in accordance with the generally applicable legislation.
Since the Law introduces a number of new concepts and definitions (including a new definition of an investment), it remains to be seen in practice how it will function.