Eurasia Press & News
Serbia ranks as the 11th worst country in the world at dealing with construction permits for business, according to a recent World Bank report.
The country’s protracted legal procedures for constructing industrial sites have become even lengthier, according to the World Bank’s 2009 ‘Doing Business’ report.
The annual comparative study found that obtaining the suitable documents and approvals for a building would take 279 days, almost ten weeks longer than the 30-week construction of a standardised average warehouse itself. This figure represents a 75 day increase over the previous year.
Regulated construction ensures high levels of public and personal safety through verification and legal procedures. However, complicated, expensive, and unnecessary regulations can either drive business away or lead to illegal construction work.
Most notably, despite a legally-determined time limit of 15 days for the processing of building permit requests from the Belgrade Construction Department, it usually takes somewhere between four and twelve times as long.
Although there have been annual reductions in the cost of finalising a construction permit since 2006, it still costs 22 times the average Serbian citizen’s income per capita, at around €75,000. This can be compared to a regional average of six times average income.
After requesting and obtaining approval from the various utility providers, including an independent verification of the project, approval must be obtained from the municipality. Land tax costs between €50 and €60/m2, which made the World Bank’s standardised 1,300m2 warehouse’s tax cost 5,379,281 dinars, or around €57,500.
The World Bank’s comparison of the number, duration and expense of permit procedures has shown Serbia to be the worst country in Europe, outside of the former Soviet Union, for dealing with construction permits.
The same report notes that for registering the purchase of business property, Serbia ranked 97th in the world, up from 117th the year before, thanks to a near halving of property transfer tax, to 2.85 per cent of property value. However, delays resulting from the slow changeover to a new registration system made the wait for a final decision from the municipality last over a hundred days.
Based on ten criteria including the difficulty of starting a business, getting credit, and trading across borders, Serbia was ranked 94th in the world for the ease of doing business in general, putting it ahead of some other countries in the region: Bosnia (119th) and Croatia (106th), but far behind others: Slovenia (54th) and Macedonia (71st).
According to figures obtained from the Serbian statistical office, in the fourth quarter of 2008, the value of new building contracts dropped to 97 per cent of 2007 levels, although the number of permits issued in 2008 was similar to the previous year.
