THE IMPORTANCE OF CONCESSION ARRANGEMENTS FOR FOREIGN INVESTMENT IN THE REPUBLIC OF SERBIA

Favourable conditions for cooperation between Serbia and other countries have been provided by passing the vast array of laws, emphasizing the interest in economic exchange and foreign investment. Concession arrangements, as a form of foreign investment, are of great importance for Serbian development including both domestic private investment and the foreign ones. The Concession Law in Serbia enables foreign concessionaires to take part in auctions and thus provide the inflow of foreign private capital into concession activities. For Serbia it is beneficial to attract foreign investment through concession arrangements, but  simultaneously protecting the interests of domestic economy and national mining reserves and non-renewable resources. Concessions as the involvement of private sector in financing and provision of traffic infrastructure and other infrastructure (water supply, telecommunications, railway), enable budget funds to be used for other purposes. Positive effects of concession arrangements are the inflow of capital, development of particular  economic branches, further employment and the transfer of new technologies. Domestic legislation provides favourable investment conditions for foreign investment, but it has to be upgraded by laws and regulations regarding public-private partnership, currently non-existing, in order to fully employ this method of financing and attract foreign investment.

JEL Classification: K22, K23