Over the past week, Serbia’s President and Minister of Finance held discussions with representatives from major American companies, including Citibank, Visa, Pfizer and Bechtel. During these meetings, they presented Serbia’s investment plans through 2027. The companies expressed interest in expanding their involvement in ongoing and upcoming large projects in the country.
These talks are the latest in a series of diplomatic exchanges that began in mid-September, following the signing of a strategic energy cooperation agreement between the USA and Serbia. The deal was intended to boost American investment in Serbia’s energy sector and strengthen the broader US-Serbia economic relationship. This raises the question: with a change in the US administration, how might American companies’ plans in Serbia evolve?
American presence in Serbia: Sectors and investments
According to the American Chamber of Commerce (AmCham), 87 US companies are currently operating in Serbia, spanning a range of sectors, including ICT, food, tobacco, energy, construction and finance. Notable companies such as Coca-Cola and Philip Morris are well-known to the Serbian public, while other American names like Ball Corporation and Bechtel are also part of the business landscape—Bechtel is notably involved in constructing Serbia’s Moravian Corridor.
In terms of overall US investments in Serbia, the US embassy notes that Serbia has become a major driver of development in the Western Balkans, attracting a total of $40 billion in foreign direct investments (FDI) over the past two decades. Of that, approximately $4 billion comes from the USA.
US investment environment in Serbia
The US Department of Commerce, through the International Trade Administration (ITA), highlights that Serbia offers a relatively favorable investment climate, with US investors being treated on par with other foreign investors. The country has several incentive programs to encourage investment, including a guarantee scheme for bank lending aimed at supporting small and medium-sized enterprises (SMEs). However, the ITA also points to some challenges, such as bureaucracy, corruption, losses in state-owned enterprises, and a large informal economy. An ineffective judicial system remains a barrier, despite the recent improvements in investment ratings for the country.
AmCham Serbia’s latest research identifies key priorities for Serbia’s long-term economic growth, including education investment, labor legislation modernization, tackling corruption and the shadow economy, improving the rule of law, and advancing digital transformation and e-government. The research also calls for the implementation of green policies.
US-Serbia business outlook post-elections
When asked about the impact of a potential return of the Trump administration on American companies’ plans in Serbia, AmCham responded that it is unrealistic to expect significant changes in the short term. They remain optimistic about continued economic cooperation, regardless of the US elections. According to AmCham, around 75% of surveyed companies anticipate growth in business and investments in Serbia next year. Although traditionally, Republican administrations are seen as more pro-business, AmCham emphasized the need for concrete policy steps from the new US government to fully assess their impact on Serbia.
Serbia’s trade with the US: Room for growth
While trade between Serbia and the US is growing, there is still significant potential for improvement. In 2023, Serbia’s software services exports to the US reached $1.6 billion, a remarkable increase, though merchandise exports are smaller, valued at $558 million according to UN-Comtrade data. Most of Serbia’s exports to the US are machines, rubber products, electrical equipment, and some weapons and ammunition.
Despite this, trade with the US remains dwarfed by Serbia’s trade with European partners, with the IT sector being the primary driver of Serbia’s exports to the US. On the other hand, American companies are looking to engage more heavily in large infrastructure projects within Serbia.
Major US infrastructure projects in Serbia
Noteworthy US companies are already involved in significant infrastructure projects. For example, the US firm Bechtel is working on the construction of the Moravian Corridor, a major highway project in Serbia. Additionally, the joint venture between the American company UGT and the South Korean firm Hyundai was awarded a $1.9 billion contract to build six self-balancing solar power plants for the state-owned energy company, EPS.
Moreover, a company linked to Jared Kushner, the son-in-law of former US President Donald Trump, has made headlines with plans to lease a site in Belgrade’s city center for 99 years, where they will invest $500 million in building a luxury hotel and apartments.
Conclusion
As Serbia continues to improve its business climate and infrastructure, American companies are becoming increasingly interested in expanding their footprint in the country. While political changes in the US may influence broader policy, the current trajectory of US investments in Serbia seems positive, with opportunities for growth in energy, infrastructure, and technology sectors. The ongoing cooperation between the two countries presents a promising future for mutual investment and economic collaboration.
