This component provides finance for start ups, together with investors who already have a successful record of investing in IT start-ups, and wish to invest initial (seed) capital in Serbia, in micro and small enterprises with innovations or products with significant market potential.

All domestic and foreign investors and micro or small enterprises will be able to take part in public calls for financing, while decisions on allocation of the stimulus will be made by expert board, established by the Government. Financial incentives granted by the Republic of Serbia cannot exceed 50% of the total approved budget of the project and can be up to 25.000 Euros, while the investor has to provide the remaining investment.

In addition to financial support for start ups, a comprehensive program of training, mentoring, coaching and networking will be put in place, with the aim to bring together and connect IT entrepreneurs, transfer the knowledge related to start-up entrepreneurship, provide mentoring and project preparation for entering the investment program, presentation of the development teams and projects to investors, etc.

        Support for the development of business incubators for IT companies

 The aim of this component is to strengthen existing and encourage creation of new technology incubators, in order to increase their ability to support establishment and rapid development of a significant number of new companies in the field of IT, and provide training in the area of entrepreneurship.

Technology incubators will be granted funding in order to provide support to young start-up companies by lowering the costs of starting a business through a unified administration services (accounting, legal services, etc.), as well as enabling them to quickly acquire new knowledge and skills (in management, finance, marketing, products, new markets, etc.).

B. Tax incentives for software companies

        The tax credit for investments in research and development

 The objective of this component is to provide support to companies that invest in research and development.

The tax credit for investments in research and development is introduced as a general rule. This means that, in addition to capital expenditures, investments in research and development will be included in the calculation of the reduction of tax liability.

The tax liability will be reduced by 20% of the total invested value (by 40% for small companies), up to 33% of the total tax liability (up to 70% for small companies) for a given tax period, along with the right to transfer the tax credit into  subsequent tax periods.

        Exemption from the liability to pay income tax

The aim of this component is to support the companies that produce software products and solutions.

Fiscal burden (taxes + contributions) to net earnings will be reduced by 35.5% (from 67% to 43%).

Companies that earn at least 70% of total revenue by selling software will be eligible to make use of this exemption

Companies with more than 50 employees can use this exemption for 80% of employees, while companies with 50 or less employees, can use this exemption for up to 90% of employees.

 C. Support for exporters of software products and solutions

 The objective of this component of the program is to provide support to companies that export their own software products and solutions.

        Cost sharing for entering foreign markets

Grants to cover part of the costs of entering foreign markets are awarded through public call, implemented by the Serbian Investment and Export Promotion Agency (SIEPA) within the "Program to Encourage Competitiveness and Internationalize Serbian Economy".

Funds are awarded on the basis of reimbursement of 50-75% of eligible costs, up to a total approved amount, for one or more of the following activities:

    internationalization of products by strengthening their competitiveness (certification of software products and solutions, quality management system certification, product localization costs in foreign markets);
    protection of industrial property (registration of trademark and industrial design);
    participation in organized business missions, visits and B2B events in foreign markets (travel and accommodation costs, the registration fee);
    opening of representative offices in foreign markets (space rental, staff costs, running costs);
    exhibiting at international fairs (rental of exhibition space, stands construction costs, etc.);
    strengthening marketing capacity (design and production of promotional materials).

        Support in acquiring information about foreign markets

This support will be provided by economic advisers in countries that are major economic partners of Serbia. They will be given an active role in process of encouragement and support to Serbian IT industry and tasked to regularly analyze the environment and make a review of local law regulations, IT market trends, opportunities for distribution of software products and solutions. This information will be made available in Serbian language, on the website of the relevant ministry.

        Export promotion and support of domestic software products and solutions

 Agency for Export Credit and Insurance (AOFI) will be tasked with introducing new instruments for finance and export insurance, customized to specific needs of IT industry.

D. Improvement of the legal framework

The objective of this component of the program is to create a conducive legal framework for development of electronic payment services (services for e-money, mobile payments, etc.), exchange of electronic accounting documents and electronic communication between citizens and businesses with the government administration.

During the first half of the 2013, a number of regulations will be introduced and amended by the Ministry of Finance and Economy and the National Bank of Serbia:

    Law on payment services - will bring an opportunity for e-money and other intermediaries in the performance of payment transactions on the Internet;
    Law on Accounting - will bring electronic accounting documents that are valid with the identification code of the issuer (which may not necessarily be the signature), as well as the opportunities for the electronic exchange of business documents (EDI);

    Law on Audit - will prescribe  electronic format as mandatory for submission of annual financial reporting;
    Law on Republic Administrative Fees - will introduce electronic payment of administrative fees with credit cards and other e-services (POS Terminals, e-money, mobile payments, etc.).

Additionally, other regulations will be adopted this year, which will further simplify business framework for entrepreneurs and freelancers, while the Tax Administration will appoint specialized tax advisors, who will provide answers to all the doubts regarding the businesses in the field of IT.

Also, the Ministry of Finance will, in accordance with the needs of the IT industry, make a list of countries with which Serbia has not signed an agreement on avoidance of double taxation and will initiate negotiations with these countries in order to sign such agreement and lower operating costs.

E. Improvement of the education system

The objective of this component of the program is to increase the number of students enrolling and graduating from faculties that educate ICT professionals, while also creating mechanism for continuous innovation of curricula in high schools, vocational schools and universities that should enable students to gain practical and up to date IT knowledge and skills.

Education programs will be composed in accordance with the needs of IT industry, and through various institutionalized cooperation means between the system of education and the IT industry, that include internship, specialization studies, specific certificate courses and so on.

3.  What are the next steps?

The Strategy was adopted in the Government session on March 7.  The very next day it was promoted to the international audience at a dedicated info session at CeBit in Hannover.

By the end of June a number of laws, bylaws and other regulation will be drafted and adopted in order to create legal base for implementation of the strategy.

The program should be fully functional and implemented in the second half of 2013, and we expect to see first results relatively quickly - already in 2014.