Free Zone Pirot presentation - Slobodna zona Pirot

FREE ZONES ZONES
IN WORLD
FREE ZONE PIROT
Dragan Kostić, Kosti , managing director
e-mail: dkostic@tigar.com

What the free zones are
Free zone is part of the territory of SR
Yugoslavia, separate
fenced and marked, where works can be
performed under
GUARANTTED SUITABLE AND FACILITY
CONDITION

THE FREE ZONE REGULATION
National Free Zone Law 1994 god
EU Law Community Customs Code
GATT (General ( General Agreement on Tariffs and Trade) Trade)
KYOTO CONVENTION and revised KYOTO CONVENTION 1999 god ON
THE SIMPLIFICATION AND HARMONISATION OF CUSTOMS
PROCEDURES
WTO AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES

Why do free zones exists ?
Enable users SAVING IN BUSINESS
(duty, tax, stimulate measures of economic policy)
Concentrate services and needs in one place -
LOGISTICS CENTRE
They are means to ATTRACT INVESTMENTS in the
service of regional development
Enable INCREASE NUMBER OF EMPLOYED
DIRECT international trade under controlled
channels

Mission of free zones
To provide the most favourable condition for
business that enable attraction investments and
making profit for the purpose of satisfaction of
interest of users of zone, economy and state.
Aim
AIM is attraction investments for the purpose of
promoting economic advancement and employment .

Activities in free zones
Production of goods, finishing, LON works, storage of
goods and raw materials, reload, packing, bank and
financial activities, insurance and reinsurance,
tourist and all other services and activities, which do
not pollute environment.

ADVANTAGES OF CONDUCTING ACTIVITIES
IMPORT OF GOODS AND SERVICES IN THE ZONE AND EXPORT OF
GOODS AND SERVICES FROM THE ZONE ARE FREE
THERE IS NO OBLIGATION TO PAY CUSTOMS DUTIES AND OTHER IMPORT
CHARGES (VAT) FOR IMPORT OF RAW MATERIALS
THERE IS NO OBLIGATION TO PAY CUSTOMS DUTIES AND OTHER
IMPORT CHARGES (VAT) FOR IMPORTED EQUIPMENT, MACHINERY
AND BUILDING MATERIALS
100 % FOREIGN INVESTMENT ALLOWED
100 % FOREIGN OWNERSHIP ON OBJECT ALLOWED
FOREIGN PERSON MAY FREELY TRANSFER HIS BASIS OF CAPITAL
AND PROFIT REPATRIATION .

THE GROWTH OF FREE ZONES WORLDWIDE
Source: ILO (2003), EU Commission (2002)
GEOGRAPHICAL AREA
Europe
North America
Transition Economies
(Central
Europe)
North Africa
and Eastern
Sub-Saharan Africa
Indian Ocean
Middle East
Asia
Central America
South America
Caribbean
Pacific
NO. OF 'ZONES'
(including EPZs)
55
713
90
23
64
3
37
749
3300 (of which 3228
maquiladoras in
Mexico)
39
87
14

JOBS CREATION OF FREE ZONES WORLDWIDE
GEOGRAPHICAL AREA
Europe
North America (excl. Canada)
Transition Economies (Central and
Eastern Europe)
North Africa
Sub-Saharan Africa
Indian Ocean
Middle East
Asia
Central America
South America
Caribbean
Pacific
TOTAL
Source: ILO (2003)
EMPLOYMENT GENERATED
(1999-2002) *
43,599
315,000
480,590
440,515
414,460
166,507
328,932
36,285,033
4,535,557
304,200
220,078
13,590
43,548,021
of which 30.000.000 in China alone
* 2002 or latest year available since 1999

FREE ZONES ALL OVER THE WORLD
5000 free zones are allocated in 102 countries.
PIROT

madeira
las palmas de
gran canaria
vigo
ringaskiddy
ronaldsway onaldsway
humberside
copenhagen
shanon
liverpool
tilbury
hamburg
bremen
sherness
bremenhaven
emden
southampton
cuxhaven
duisburg
kiel
deggendorf
cadiz
bordeaux
barcelona
prestwick
trieste
venice
thessaloniki
piraeus
lappeenranta
hangon
heraclion
SLOBODNE ZONE U EVROPSKOJ UNIJI

shanon
shanon
copenhagen
bremen
bremen
bremenhaven
bremenhaven
cuxhaven
cuxhaven
deggendorf
deggendorf
duisburg
duisburg
emden
emden
hamburg
hamburg
lappeenranta
lappeenranta
hangon
hangon
bordeaux
bordeaux
ringaskiddy
ringaskiddy
madeira
madeira
barcelona
barcelona
las
las palmas
palmas de
de
gran
gran canaria
canaria
vigo
vigo
cadiz
cadiz
trieste
trieste
venice
venice
liverpool
liverpool
ronaldsway
onaldsway
prestwick
prestwick
southampton
southampton
tilbury
tilbury
sherness
sherness
humberside
humberside
piraeus
piraeus
thessaloniki
thessaloniki
heraclion
SLOBODNE ZONE U EVROPI
SLOBODNE ZONE U EVROPI
kiel
kiel
budapest
budapest
bar
bar
pirot
pirot
kotor
kotor
novi
novi sad
sad
beograd
beograd
senta
senta
sr.
sr.mitrovica
mitrovica sombor
sombor
sabac
sabac
prahovo
prahovo
nis
nis
ISE
ISE
yumurtalik
yumurtalik
east
east anatolian
anatolian
isanbul ataturk
isanbul ataturk
istanbul
istanbul
leather
leather
mardin
mardin
mersin
mersin
samsun
samsun
trabzon
trabzon
antalya
antalya
aegean
aegean
celje
celje
gorica
gorica
gorica
gorica f.z.
f.z.
b.
b.bystrica
bystrica
yantar
yantar
sheremetievo
sheremetievo
galati
galati
sulina
sulina
braila
braila
constantza
constantza
szczecin
szczecin
zarnowiec
zarnowiec
latvia
latvia
larnaca
larnaca
osijek
osijek
rijeka
rijeka
split
split
zgb
zgb.
bourgas
bourgas 3 f.z.
3 f.z.
rousse
rousse
dragoman
dragoman
svilengrad
svilengrad
vidin
vidin
betriebsges
betriebsges
zoll
zoll-graz
graz
tirol
tirol
cadiz
cadiz
gibraltar
gibraltar
icelandic
icelandic
famagusta
famagusta
chisinau
chisinau
tvardita
tvardita
kalafrana
kalafrana

MEXICO 107 F.Z.
el wajau
mariel
berroa cienfuegos
kingston
SLOBODNE ZONE USD
airport bahamas
port bahamas
garmex
montego bay

elize
commercial
la aurora
bushiri
castilla
oranjestaad
honduras
cul-de cul de-sac sac inter continental business
costa rica
valencia-san
valencia san diegoa
la union
9 f.z.
colon
paraguana
panama
paraguana
las mercedes
zonexport
el salvador 8 f.z.
isla margarita
cuenca ind.park. ind.park.
esmeraldas ecuad. ecuad
colombia 11 f.z.
park industriel
Ilo
ZOFRI
inquiqee
franca mendozaa
punta arenas
guadelope
barcadera
el alto
nueva palmirao
santa
cruzo
yacuiba
dominican republic 28 f.z.
hato
vieux fort
de manaus. manaus
la plata
corumba
florida
boar
montevideo
comodoro rivadaviao
tierra del fuego
santa
catarina
t. otoni tocantins
rio grande
imbituba
ilheus
SLOBODNE ZONE U JUZNOJ AMERICI

cape verde
dakar
tangier’s port
liberia
port d’abidjan
togo
calabar
zarzis
lobito
tripoli
walvis bay
Alexandriaa
ismaileya
damietta
al-gaili al gaili port sudan
port said
al-ganaina al ganaina
burundi
nasr city
suez
beira
maputo
beirut
jordan 7 f.z.
sudanese
ammani
red sea
harare
djibouti
micheveni
fumba
aden
Kenya 14 f.z.
koggala
katanayake
biuagama
SLOBODNE ZONE U AFRICI
mauritius freeport
mauritius zone

likit
eilat
haifa
ashdod
chabahar
sarkhs
kish
kuwait
ahmed bin
rashid
dubai aeroport
sharjah
sirjan
queshm
jebel ali fujairah
mangistau
karachi
lisakovsk
special
noida
santa cruz
cochin
visakhapatnam
biuagama
madras
katunayake
falta
koggala
kandia
ha erbin
huhe haote 3 z.
shenyang
tiexi
yin kou
huhe haote 3 z.
dalian
tianjin 3 f.z.
wei hai
nakhodka
/russian russian f.e.z./
SLOBODNE ZONE U AZIJI
chang sha xin sha
shenyang n. railway
dalian
beijing
masan
beijling lion
wan ding
lian jungang
su zhou
shangai
zhe jang
jiujiang
12 f.z.
huang shi
7 zones
suzhou
okinawa
san xia
itoman
wan xian
jiu jiang
chanbei
nakajo
shenzhen spec.
kun ming
shenzhen
shin naha
korean
shatoujiao
taiwan 3 e.p.z.
chu xiong
dhaka
tai po
fuzhou fujian 7 f.z.
fangchen
shan tou guang 2 f.z.
chittagong
tai po
bataan
tseung kwan
vietnam
he kou
bataan
6 zona
hai kou b.z.
tabangao
victoria wave
thailand
hainan s.e.z.
10 zona
cavite
gateway
first cavite
subic bay
laguna
mactan
laguna
light
int.
baguio
industry

pilau pinang
penang 9 zona
telok panglima
pasir guandang
port klang
pt kabil
jakarta 8 zona jakarta east
calung 9 zona tanjung tanjung emas
jakarta west i
north 8 zona
trade development zone
SLOBODNE ZONE U AUSTRALIJI

DISTRIBUTION 3
FREE ZONES
IN REPUBLIC OF
SERBIA
FREE
ZONES
Subotica
Zrenjanin
PIROT

SERBIA’S ADVANTAGES
• Strategic positioning for markets in Europe, Asia and
the Middle East ( Pan European Corridors No. 10 and
No.7 and No.8)
• Duty free access to the South East Europe Free Trade Zone
• Lowest corporate profit tax rate in Europe (10%)
• Skilled labor at a reasonable cost
• Free trade agreement with the Russian Federation

Low Labour Costs per Employee
Serbia
Romania
Hungary
Czech R.
Poland
258
329
539
560
763
Croatia 798

Favourable Tax Regime
Serbia 10%
Lowest Corporate Profit Tax rate in Europe
Hungary 16%
Poland 19%
Bulgaria 19.5%
Croatia 20%
Czech Republic 28%

Favourable Tax Regime
Individual Income Tax Rates
Serbia 14-24%*
Slovenia 5-30%
Romania 18-40%
Bulgaria 17-50%
Croatia 32-56%
* 10% flat tax rate only on portion of income surpassing the tax threshold

Taxes
Value Added Tax rates - 18% and 8%
(NO in Free Zones)
Corporate Profit Tax rate - 10%
Salary Tax rate - 14%
Social Security Contributions
• pension and disability contributions – 11%
• health insurance – 6,15%
• unemployment contributions – 0,75%

Serbian Tax System
Corporate Profit Tax
• Corporate profit tax is levied at the rate of 10% on the profit
generated by the taxpayer, as reported in the annual tax returns
• Taxable profit is established on the basis of the accounting profit
reported in the annual statutory statement of income
• Dividends, share of profits, royalties, interest, capital gains and
income deriving from the leasing of real estate and/or movable
property, received by a non-resident entity from a resident entity are
taxed at the rate of 20%

Value Added Tax
Serbian Tax System
• VAT rates are 18% and 8% (for 13 groups of products)
• Tax base is the value received in return for the provision of goods and services,
and it includes all excise duties, customs duties and all public revenues except
VAT, together with the overhead expenses calculated by the provider of goods
and services
• The surplus of paid tax is to be refunded within 45 days from the end of the
deadline for submission of the tax return, except in the case of large exporters
where the timeframe for refund is 15 days from the end of the deadline for the
submission of the tax return
• VAT on imports is regulated in accordance with the customs regulation. Customs
authorities are in charge of calculating and collecting VAT on imports

Investment Incentives in Serbia
The lowest corporate profit tax rate – 10%
Large investment projects: 600 mill CSD, 100 working
places-10 year tax holiday
Tax relief up to 2 years for hiring new employees
Tax credit up to 80% of investment amount for investing
in fixed assets
Import of equipment as investment is free from custom
duties, VAT is charged ( NO in Free Zones)

SLOBODNA ZONA PIROT
FREE ZONE PIROT, JOINT-STOCK JOINT STOCK COMPANY IS LOCATED ON THE
HIGHWAY E-80, E 80, THE SHORTEST LINK BETWEEN EUROPE AND
ASIA, IN THE INDUSTRY ZONE WITH SUPERIOR
INFRASTRUCTURE PROPERTIES AND EXISTENCE OF INTEGRAL
TRANSPORT CENTRE

BAR
CORRIDOR 10
CORRIDOR 8
SZ PIROT
SOLUN
VARNA
BURGAS
ISTANBUL
MAIN ROAD NETWORK AND CONNECTIONS WITH THE PORTS

REGULATION
PLAN OF
FREE ZONE
PIROT
SERVICES IN FREE ZONE PIROT
• preparing customs documents and follow of work
of the users for all activities
• no obligation to pay customs duties for the goods
produced for export
• services- forwarding, reloading, storage,
finishing, containers terminal
• organization of international transport of goods

1. INFRASTRUCTURE
power supply
water and sewerage sys.
optical telephone cable
international highway corridor
10
railway (side track)
2. BUILT CAPICTY
production 2.500 m2
storage 15.000 m2
for building 30.000 m2

BUILDING OF OBJECTS
BUILDING OBJECTS IN
ZONE ARE FREE OF
CHARGE FOR ALL
MUNICIPALE CHARGES
( 20 % less price for building)
USING OBJECTS IN ZONE
ARE FREE OF CHARGE
FOR ALL MUNICIPALE
CHARGES FOR THE 5.
YEAR PERIOD

MAIN PRODUCTIONS IN FREE ZONE PIROT
TYRES FACTORY TIGAR MH - MISHELIN

INDUSTRIAL PARK FREE ZONE PIROT
For the purpose to create the most favourable conditions and advance
enterpreneurship, municipal assembly through concerted efforts of
FZ Pirot, offer a Special stimulative measures programme within
the Industrial Park FZ Pirot.
A. FACILITIES ALLOWED BY FZ
B. STIMULATIVE MEASURES ENABLE BY MUNICIPAL
C. STIMULATIVE MEASURES PROVIDED BY FZ PIROT

FACILITIES ALLOWED BY FZ LAW
• Imports of goods and services into the zone, as well as
exports of goods and services from the zone are free
• Imported raw materials and semi-finished manufactures set
aside for export, are exempted from duty and other import
duties
• Limported equipment, machines and construction materials
are exempted from duty and other taxes
* User of the zone facilities can freely manage foreign
currency which is achieved by business operations in zone

FACILITIES ALLOWED BY FZ LAW
• Beneficial interests of the zone users are established by FZ Law
and they can not be reduced by any other regulation
• Imports of goods into the zone are duty free. Goods from the
Zone can be placed to the home market at the customs clearance and
other taxes. If the goods entering the customs area of Serbia are
produced within the Zone, or exposed to manipulation at domestic
ingredients sharing, duty is paid according to the rate of foreign
ingredient within the goods.
• Transfer of the profit achieved by the different activities in Zone
are free.

STIMULATIVE MEASURES ENABLE BY
MUNICIPAL ASSEMBLY of PIROT
If the users are interested in building within the Free Zone,
they are completely exempted from the following payments:
- costs for the municipal land development
- costs for the municipal taxes and payments(communal
taxes,city planning permission,priority right of building…)
- costs at the public Utility companies waterworks,
sewage distant heating - expenses for the consent to the
system connection

STIMULATIVE MEASURES ENABLE BY
MUNICIPAL ASSEMBLY of PIROT
If the users are interested in building within the Free Zone,
they are completely exempted from the following payments:
- system connection cost recovery (except material
expenses)
- costs at the Public city planning company:
- expenses for the issued records (documentation) which
are important for the solving of current demands
- costs for the city planning and technical conditions; and
issuing agreement for the building and establishing both
secondary and interim facilities.
- exemption from the payments for the water supplies and
sewage system connection

STIMULATIVE MEASURES ENABLE BY
MUNICIPAL ASSEMBLY of PIROT
• Within the limits of the FZ Industrial Park, users are
exempted from payments such as local communal taxes,
costs for municipal land using, costs for communal
services (10 years).

STIMULATIVE MEASURES PROVIDED
BY FZ PIROT
Besides these activities within the framework of the FZ and Duty Free
Regime Law, users are offered services within the manufacturing,
storage, merchandise turnover by means of FZ Logistic Centre. These
are:
- supervision and providing free labour for all zone users
- forwarding operations in the field of foreign trade operations
- domestic and international transport organization
- reloading of the goods
- container terminal
- warehousing (in storehouse and outside)
- working system according to the ON Stop Shop principle, which
means that the administrative procedure starts and ends in Zone itself.
This procedure refers to goods transportation and agreements and
permissions which fall within customs competence.

EXPORT, IMPORT and PRODUCTION in FREE ZONE PIROT
OPLEMENJIVANJE
finishing, improving
EXPORT
production
IMPORT PORT
FREE ZONE PIROT
Border of SERBIA

FREE ZONE PIROT
18300 Pirot Nikole Pasica Str. NN
tel.+38110/ 30 40 71 ; 33 77 99; fax 30 40 73
e-mail: freezpi@tigar.com
www.freezpi.co.yu
Contract Persons: Dragan Kostic, managing director
e-mail: dkostic@tigar.com

KAKO JE SRBIJA SME[TENA NA
DREVNOM STRATE[KOM
RIMSKOM PUTU VIA MILITARIS
SLOBODNE ZONE SRBIJE MOGU
BITI MOST KOOPERACIJE U
TRANSPORTNOM LANCU ROBA
IZMEDJU ISTOKA I ZAPADA.
ZONE IMAJU POTENCIJALE ZA
RAZVOJ PRIVREDE I
INFRASTRUKTURE I AKTIVIRANJE
POSTOJE]IH PRIRODNIH RESURSA
I RADNE SNAGE..