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Funding for Startups in Serbia: Opportunities for Foreign Entrepreneurs

by Maria L. Searle
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funding for startups in serbia

Starting a business is an exciting journey, however, procuring the funds needed is no mean feat. For foreign entrepreneurs looking to launch startups in Serbia, understanding the local funding landscape is crucial. Serbia offers a range of funding opportunities that are able to aid different stages of a startup’s growth.

In this article, we will explore the different funding options available for startups in Serbia, focusing on opportunities for foreign entrepreneurs.

Government Grants and Incentives

The Serbian government is committed to fostering innovation and entrepreneurship. As part of this commitment, it offers various grants and incentives to support startups, including those founded by foreigners.

Innovation Fund

One of the primary sources of government funding is the Innovation Fund. This organization provides financial support for innovative projects through several programs:

1. Mini-Grants Program

The amount available:

  • Maximum 120,000 Euros,
  • Maximum 70% of the total approved project budget
  • 30% minimum of the total approved project budget is to be provided by the Аpplicant from other private sector sources, independently of the Innovation Fund

The funds are intended to help startups develop innovative products and services, from concept to prototype.

2. Matching Grants Program

For more mature startups, the Matching Grants Program offers:

  • Maximum 500,000 Euros,
  • Maximum 70% of the total approved project budget for micro and small enterprises,
  • or 60% for medium enterprises
  • a minimum of 30% or 40% of the total approved project budget is to be provided by the enterprise.

This program requires startups to secure co-financing from private investors, fostering a partnership between public and private funding sources.

3. Collaborative Grant Scheme

The amount available:

  • maximum of 500.000 Euros
  • or up to 70% of the total approved project budget (for projects of micro or small companies
  • or up to 60% of the total approved project budget for medium-sized companies.
  • 30% minimum of the total approved project budget for micro or small companies,
  • 40% minimum of the total approved project budget for medium-sized companies should be managed by the Аpplicant from other private sector sources independently.

This scheme encourages collaboration between Serbian companies and international partners, providing up to 300,000 Euros to support joint R&D projects.

Tax Incentives

In addition to direct grants, the Serbian government has enabled tax incentives so as to encourage investors. These include:

  • Corporate Income Tax Relief: Startups involved in innovative activities can benefit from corporate income tax relief for a period of up to 10 years.
  • R&D Tax Credits: Companies investing in R&D can claim tax credits for eligible expenses, reducing their overall tax liability.

Legal help is not only necessary but also easily accessible for all the guidance you may require.

Venture Capital and Angel Investors

Venture capital (VC) and angel investors are crucial sources of funding for startups in Serbia. These investors provide not only capital but also valuable mentorship and industry connections.

Venture Capital Funds

Several VC funds operate in Serbia, focusing on niches like consumer goods, technology, and healthcare. Notable VC funds include:

  • South Central Ventures: This fund focuses on early-stage and growth-stage companies in the Balkans, including Serbia.
  • ICT Hub Venture: Specializing in tech startups, ICT Hub Venture offers seed funding and early-stage investment. They also provide mentoring and support through their accelerator program.
  • StartLabs: StartLabs invests in early-stage tech startups, offering both funding and mentorship to help startups scale and succeed.

Angel Investors

Angel investors are key in the Serbian startup ecosystem. These high-net-worth individuals provide seed funding and early-stage capital to startups in exchange for equity. The Serbian Business Angels Network (SBAN) connects startups with potential angel investors, facilitating introductions and investment opportunities.

Crowdfunding Platforms

Crowdfunding is an ever-growing trend for startups to raise capital. Serbian startups can leverage both local and international crowdfunding platforms to reach a broad audience of potential backers.

Local Platforms

  • Ventu.rs: This is a leading crowdfunding platform in Serbia that allows startups to raise funds from local investors. The platform supports various types of crowdfunding, including equity-based and reward-based models.

International Platforms

  • Kickstarter: Although based in the United States, Kickstarter is a well-known platform that Serbian startups can use to reach a global audience. Successful campaigns can raise significant amounts of capital and gain international exposure.
  • Indiegogo: Similar to Kickstarter, Indiegogo is a global crowdfunding platform that supports various funding models. Serbian startups can use Indiegogo to attract international backers and raise funds for their projects.

Bank Loans and Microfinancing

Traditional bank loans and microfinancing options are available for startups in Serbia, although they may require more stringent eligibility criteria compared to other funding sources.

Commercial Banks

Several commercial banks in Serbia offer loans specifically tailored for startups and small businesses. These loans can be used for various purposes, including working capital, equipment purchases, and business expansion. Banks may require collateral and a solid business plan to approve loans.

Microfinance Institutions

Microfinance institutions provide small loans to startups and entrepreneurs who couldn’t manage to acquire traditional bank loans. These institutions often focus on underserved populations and areas, offering more accessible financing options. Some notable microfinance institutions in Serbia include Opportunity Bank and AgroInvest.

European Union Funding

As a potential candidate for the European Union membership, Serbia has access to various EU funding programs aimed at supporting innovation and entrepreneurship.

Horizon Europe

Horizon Europe is the EU’s key research and innovation funding program, with a budget of 95.5 billion Euros. Serbian startups can participate in Horizon Europe projects, either as coordinators or partners, and receive substantial funding for their innovative ideas. The program covers a wide range of areas, including health, digital technology, and climate change.

COSME Program

The COSME program is designed to support small and medium-sized enterprises (SMEs) by improving access to finance, markets, and business support services. Serbian startups can benefit from COSME through:

  • Loan Guarantee Facility: This facility provides guarantees to financial intermediaries, enabling them to offer loans to startups with limited collateral.
  • Equity Facility for Growth: This facility supports venture capital investments in growth-stage startups, helping them expand and scale their operations.

Accelerators and Incubators

Accelerators and incubators offer a combination of available resources, as well as funding and mentorship, so as to aid new businesses on their way to success. Serbia has a growing number of these programs, which are often supported by both public and private entities.

Notable Accelerators and Incubators

  • Startit Center: Startit Center operates several hubs across Serbia, providing co-working spaces, mentorship, and access to funding. Their programs support startups at various stages of development.
  • Impact Hub Belgrade: This global network of accelerators has a branch in Belgrade, offering support to startups focused on social impact and sustainability. Impact Hub provides access to a global community of entrepreneurs, investors, and mentors.
  • Science Technology Park Belgrade: This incubator supports tech startups by providing office space, mentorship, and access to funding. They also facilitate connections with research institutions and industry partners.

Conclusion

Serbia offers a diverse range of funding options for foreign entrepreneurs. From government grants and incentives to venture capital, angel investors, crowdfunding, and EU programs, the funding landscape in Serbia is rich with opportunities.

By leveraging these resources, foreign entrepreneurs can establish and grow successful startups in this dynamic and promising market.

Serbia’s supportive ecosystem, combined with its strategic location, skilled workforce, and competitive costs, makes it an attractive destination for startups. For foreign entrepreneurs looking to launch their next venture, understanding and tapping into the available funding opportunities is key to achieving long-term success.

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