Yugoslavia - offer

CONCESSION REGULATIONS

_legislation

_{Issues concerning granting concessions are regulated by the
Law on general terms for granting concessions to foreign nationals in the Republic of
Serbia ("Sluzbeni glasnik RS", Issue No. 6/90).}

_{According to the provisions of the Federal Law on foreign
investment, the concessions granted in the member republics are just registered with the
federal ministry authorized for foreign economic relations, within thirty days from the
date of signing the contract.}

_{types of concessions}

_{Concessions can be granted to foreign nationals:}

_{to use unrestorable natural resources or public property, with
the tenure lasting no more than 30 years, not counting the time necessary for the
preparation work on the object in question. The concession is granted by law, whose
integral part is the concession contract,}
_{to use certain restorable natural resource or public property,
with the tenure lasting no more than 30 years. This issue is also regulated by law which
refers to each particular contract.}

_{The government of the Republic of Serbia can allow a foreign
national to build, manage and use for a limited period no longer than 20 years a certain
object, facility or plant as his own company or infrastructure or communication objects,
under the conditions stated in the approval. For infrastructure and communication objects,
the approval can be given for up to 30 years.}

_{A foreign national can be granted a time charter to use:}

_{arable land, for a period not longer than 20 years,}
_{municipal building site, for a period not longer than 50
years,}
_{land in a free or customs zone, not longer than 50 years,}
_{other real estate and property of public interest in the state
or public ownership, not longer than 20 years.}

_{submitting a concession offer}

_{An offer for granting a concession is to be submitted to the
government of the Republic of Serbia, and has to contain:}

_{vital statistics of the applicant,}
_{information on the property or natural resource to which the
concession offer refers,}
_{the purposes for which the property or natural resource would
be used,}
_{period for which concession is requested,}
_{ways and conditions of exploiting a certain property or
natural resource,}
_{charge for the exploitation of a public property or natural
resource,}
_{the extent of other lights and obligations of contracting
parties.}

_{restrictions in granting concessions}

_{Foreign nationals are not to be granted concessions for the
activities for which, according to the current regulations, a foreign national cannot
found his own company - in areas considered prohibited according to certain regulations;
and in cases when measures for the preservation of the environment are not undertaken.}

NEW REGULATIONS ON FREE ZONES

In late 1994 a new law on free zones was passed ("Sluzbeni list SRJ" Issue No. 81/94) which is considerably more liberal than its predecessor.

founders and users of the zone can be Yugoslav and foreign nationals

Regulations allow founding of free zones by both Yugoslav and foreign nationals and legal entities, while the zone managing company can be founded by the zone's founders and other Yugoslav and foreign nationals and legal entities. The users of the zone can be Yugoslav and foreign nationals and legal entities who do business in the zone. The property of the zone users is not subject to nationalization and expropriation.

founding of the zone

A zone can be founded in the area of a town which has a sea port, a river port or an airport open to international traffic and which lies along major thoroughfares integrated into die European road network (E). A zone can be divided into several separate areas - subzones - constituting the zone's economic and organizational whole, every part of which being separately marked and fenced off. A zone is being founded if such an undertaking is economically justified, if goods and services are being exported from the zone abroad and if the conditions regarding the zone's physical plan, constriction, power supply and technical standards are fully met, as well as environment preservation and other conditions for uninterrupted activities in the zone. The founders of the zone draw up an act on the founding of the zone which includes the title of the founder, the name of the zone and its area. The founders of the zone establish a zone managing company in which the share of C, the foreign investor may not exceed 49%. The zone managing company submits a request to the Federal Government through the Ministry of Finance, for granting the approval to found the zone/subzone, enclosing the following:

founding act for the zone/subzone,
study on the economic viability of founding the zone/subzone,
evidence that the zone managing company, that is, its founder, has the right to use the land on which a zone/subzone is to be founded,
evidence that the conditions as to the zone's physical plan, construction, power supply, organization and technical standards are fully met, as well as environment preservation and other conditions for business activities in the zone/subzone,
the act of founding the zone managing company.

The federal ministry will recommend the Federal Government that the request for opening a zone/subzone be granted if the founding of the zone is economically justified and if the submitted study shows enough evidence for the assumption that the zone will export abroad at least 30% of the annual output of goods and services rendered.

Approval is granted within thirty days from the date of the receipt of the request and is valid for two years.

business activities in the zone

The export of goods and services from the zone as well as the import of goods and services into the zone are free. Foreign goods marketed in Yugoslavia from the zone are subject to the regulations governing foreign trade. The term "foreign goods" is applied to the goods entirely manufactured abroad, as well as the goods whose value has been increased in the zone by up to 49% in the course of their production (except in cases when this added value is due to sorting, measuring, marking, assembling, disassembling, making samples and so on).

The user of the zone may temporarily transfer the goods from the zone to another part of Yugoslavia, as well as from another part of Yugoslavia to the zone, for purposes of inspecting, testing in order to issue certificates, repairing and marketing presentation.

The authorized customs office may also allow the user of the zone to temporarily take the goods abroad in order to improve them (by processing, adapting or modifying them), as well as in order to build them in, in accordance with the regulations on temporary export and import of goods.

the import of goods into the zone is duty-free

The import of the goods intended for business activities in the zone is exempt of all import duties, except the customs records charge in the amount of 0.5%. The goods marketed in Yugoslavia from the zone are subject to customs duty and other import duties, according to the usual customs procedures for the regular import of goods.

payment transactions in the zone are not restricted

Payment between the users of the zone themselves, the zone managing company and the users of the zone, and all foreign transactions are free and are made in the agreed way and in the agreed periods of time.

capital investment in the zone is not restricted

Investment of capital in the zone, transfer of profits and retransfer of investment are free of restrictions.

the right to own a foreign currency account

The user of the zone and the zone managing company can keep the foreign currency gained through business transactions in the zone on a foreign currency account, at an authorized bank in the zone, or elsewhere. They can dispose with the foreign currency without any restrictions.

bank founding in the zone

Banks can be founded in the zone, as well as other financial organizations, insurance companies, branches of foreign banks, foreign insurance companies, in keeping with the regulations governing banking and insurance.

foreign credit operations

Taking foreign loans for business operations in the zone or creating conditions for business operations in the zone, as well as giving loans to Yugoslav and foreign legal entities doing business in the zone is free.

property rights in the zone

The user of the zone retains his property rights on material goods, other rights and funds he imported into the zone and has the right to carry on business according to regulations applicable out of the zone in case the zone becomes defunct.

forbidden activities in the zone

No activities detrimental to the environment, human health, material goods and state security are allowed in the zone in accordance with the law.