Market Opportunities

The SEE countries have shown their potential numerous times, becoming an investment hub with a reinforced business climate led by a wave of reforms, privatisations, and developments of new industries. These countries have managed to attract a high influx of FDI’s thanks to low labour and utility costs, accompanied by a multilingual and qualified workforce. The governments of the SEE countries remain committed to maintaining a friendly investor climate by pushing forward with the reforms and offering incentives - foreign investors can own up to 100% interest in a company, open bank accounts in domestic and foreign currencies, and employ foreign citizens easily. Relaxed regulations on foreign transfers of income and protection from nationalisation, expropriation, and requisition, are a further testament to the business climate.

Karanovic & Partners is dedicated to sharing some of the most interesting opportunities that the region has to offer. We bring you a flavour of what the SEE region has in store – for more information please contact us at bd@karanovicpartners.com.

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  • Serbia

    Macroeconomic Snapshot

    Key Macroeconomic Indicators

      2016 2017 2018 2019 2020E 2021F
    GDP Nominal (EUR M) 36,722 39,182 42,856 45,911 46,200 49,000
    GDP Real, % 3.3% 2.0% 4.4% 4.2% -1.1% 4.2%
    GDP Per Capita (EUR) 5,203 5,581 6,138 6,593 6,693 7,125
    Inflation, % EOY 1.5 % 3.0% 2.0% 1.8% 1.3% 2.1%
    Net FDI (EUR M) 2,056 2,390 3,166 3,627 2,310 2,842
    Public Debt, % GDP 67.6% 59.3% 53.7% 52.0% 59.0% 59.4%
    External Debt, % GDP 72.1% 65.3% 62.6% 61.8% 64.4% 66.7%
    Foreign Reserves (EUR M) 10,205 9,962 11,262 13,800 14,200 15,400
    Trade Account Balance, % GDP -9.9% -11.1% -13.2% -13.7% -13.8% -13.9%
    FX Rate, EUR/RSD (EOY) 123.4 118.2 118.3 117.6 117.6 117.9
    AVG Net Salary (EUR) 374 394 420 466 492 515
    Unemployment, % 15.3% 13.5% 12.7% 10.4% 9.5% 11.2%
    Population (M) 7.1 7.0 7.0 7.0 6.9 6.9
    Doing Business List 59 48 43 48 44 -

    Sources: Statistical Office of the Republic of Serbia, Erste Bank, UniCredit Bank


    Moody’s Ba3; Positive
    S&PBB+; Stable
    Fitch BB+; Stable

    Political scene /

    • Parliamentary elections were held in Serbia in June 2020. The Serbian Progressive Party–led coalition won one of the largest parliamentary majorities in Europe, with 63,02 % of the votes. The Government of the Republic of Serbia was formed on October 28, 2020, with the election of Ana Brnabić as Prime Minister.
    • Serbia and Kosovo have signed the economic normalisation agreements, a pair of documents in which Kosovo and Serbia agreed to facilitate economic normalisation among themselves. The documents were signed by the Prime Minister of Kosovo Avdullah Hoti and the President of Serbia Aleksandar Vučić on September 4, 2020 at the White House, in the presence of former US President Donald Trump.
    • The Government has responded adequately in the attempt to curb the outbreak of COVID-19, offering help and measures to help save the economy.

    Investment climate /

    • Standard & Poor’s has improved the credit rating of Serbia to BB+, as recently did Fitch, assessing the environment and outlook as positive. This is an encouraging signal for the investors and business partners to consider Serbia as stable and reliable destination for investment, trade, research, and development. Other agencies rate Serbia’s environment from stable to positive.
    • The Government has responded adequately in the attempt to curb the outbreak of COVID-19, offering help and measures to help save the economy. GDP is expected to drop due to the coronavirus outbreak but start a recovery in 2021.
  • Croatia

    Macroeconomic Snapshot

    Key Macroeconomic Indicators


    2016 2017 2018 2019 2020E 2021F

    GDP Nominal (EUR M)


    GDP Real, %


    GDP Per Capita (EUR)


    Inflation, % EOY


    Net FDI (EUR M)


    Public Debt, % GDP


    External Debt, % GDP


    Foreign Reserves (EUR M)


    Trade Account Balance, % GDP


    FX Rate, EUR/HRK (EOY)

    AVG Net Salary (EUR)


    Unemployment, %


    Population (M)

    Doing Business List


    Source: Croatian National Bank, Erste Bank, UniCredit Bank


    Moody’s  Ba1; Stable
    S&P  BBB-; Stable
    FitchBBB-; Stable

    Political scene /

    • The Croatian Democratic Party (HDZ) is still in power after the 2020 elections.
    • Their coalition showed to be supportive for the macro-outlook (supportive to reforms) and faithful to the EU.
    • Croatia’s presidency of the Council of the European Union ended on 30 June 2020 and was overshadowed by the COVID-19 pandemic.
    • In January 2020, Croatian citizens elected their new president, Zoran Milanovic, who was the president candidate of the Social Democratic Party (SDP).
    • The local elections are expected in the second trimester of 2021.

    Investment climate /

    • COVID-19 imposed a huge threat to the economy and investments in Croatia, as in the whole world, and will inevitably have significant consequences on the economy.
    • A strong second earthquake hit central Croatia this year causing significant damage. The Government allocated significant resources to initiate the process of rebuilding the City of Zagreb and other damaged cities and villages in central Croatia.
    • In Croatia, GDP decline was 4,2% in the fourth trimester of 2020 showing the improvement after the decline in previous trimesters. By the estimation of the Croatian National Bank, decline of the GDP for 2020 was 8,9%.
    • Croatian Government keeps adopting economic measures whose main purpose is to keep jobs and resolve the problem of liquidity.
    • The following measures, among others, have been adopted and stayed in place throughout the last trimester of 2020 and are expected to continue as long as the COVID-19 pandemic affects the economy:
      • deferred payment of tax and/or payment of tax in instalments;
      • prolongation of incentives for so-called “permanent seasonal workers”; and
      • exemption of payment of public fees;
      • financing of the cost of net minimum wage;
      • commercial banks are introducing a standstill;
      • moratorium on client credit obligations;
      • approval of new liquidity loans; and
      • reprogramming by credit institutions.
  • Slovenia

    Macroeconomic Snapshot

    Key Macroeconomic Indicators

    GDP Nominal (EUR M)40,36742,98745,75548,00744,70047,500
    GDP Real, %3.1%4.8%4.1%2.4%-6.7%4.4%
    GDP Per Capita (EUR)19,55120,80922,08322,98321,32122,638
    Inflation, % EOY0.5%1.7%1.4%1.8%0.2%1.6%
    Net FDI (EUR M)1,2921,0751,2811,2488501,093
    Public Debt, % GDP78.7%74.1%70.4%66.1%79.1%78.3%
    External Debt, % GDP111.0%101.1%93.0%91.7%101.1%94.2%
    Foreign Reserves (EUR M)705743816844900900
    Trade Account Balance, % GDP3.8%3.7%2.5%2.8%4.3%3.9%
    AVG Net Salary (EUR)1,0301,0621,0931,1341,1291,151
    Unemployment, %8.0%6.6%5.2%4.4%5.1%5.3%
    Population (M)
    Doing Business List3030374037-

    Sources: National Statistical Office, Erste Bank, UniCredit Bank


    Moody’s A3; Stable
    S&PAA-; Stable
    FitchA; Stable

    Political scene:

    • New Government under leadership of Prime Minister Janez Janša has been formed in March 2020, following resignation of then-Prime Minister Marjan Šarec. The centre-right coalition currently consists of three member parties (Slovenian Democratic Party, Modern Centre Party and New Slovenia,).
    • Slovenia has been a member of the European Union since 2004, while membership in the Economic and Monetary Union was gained during 2007. Slovenia also joined the Organization for Economic Co-operation and Development (OECD) in 2010. 

    Investment climate:

    • SID Bank and EIF established the Slovene Equity Growth Investment Programme which is a 100 million equity investment programme, in which the EIF and SID Bank each invested 50 million EUR. This money will be invested as an equity into small, medium-sized and mid-cap companies. The program supports the capacity building of private equity funds established in Slovenia through which equity and mezzanine financing will be provided to eligible companies. First such funds are ALFI and Generali Investments.
    • Upon the election of the Government in 2014, the Fiscal rule act was adopted. It posed limits for general government expenditures in order to achieve a structurally balanced budget by 2020.
    • Key measures adopted in Fiscal rule involve:
        • the reduction of the general government deficit,
        • recapitalisation of banks, and,
        • reforms to the labour market, pensions, healthcare system and business environment. 

    Due to the COVID-19 pandemic and the related exceptional circumstances, a temporary deviation from fiscal rules was permitted by the EU Commission.

    • Credit ratings are as follows: S&P AA-, stable outlook; Fitch A, stable outlook; Moody’s A3, stable outlook.
    • After joining the EU, Slovenia significantly improved its infrastructure for inland transport and invested in ports leading to rising harbour traffic.
    • Foreign investors and residents are subject to the same tax regime.

    As part of the response to COVID-19 pandemic, the Slovenian parliament adopted several legislative packages including relevant measures for investments, such as:

    • new set of rules applicable to foreign direct investments, which will have important implications for several fields, including M&A transactions, greenfield, and real estate, applicable from 1 June 2020 until 30 June 2023, and
    • list of significant investments of 187 infrastructure projects worth EUR 7.7 billion.

    The SID bank made available additional funding for SME (loans up to EUR 7 million) and large entities (loans up to EUR 12 million) coping with economic consequences of the health crisis or manufactures products or provides services necessary for the treatment and prevention of the COVID-19. In addition, various collateral and other financing programs of SID Bank are available to companies (SMEs as well as large companies). SID also made available loans to finance technological development projects (loans from EUR 100,000 to EUR 15 million) and loans to finance investments in research, development and innovation from the Covid-19 fund (loans from EUR 10,000 to EUR 2,5 million).       
    Major foreign investors to Slovenia, among others, are BSH Bosch und Siemens Hausgeräte, Geberit, Goodyear Dunlop Tires Europe, Knauf Insulation, Lidl, MOL, Renault, Sandoz Group, Spar, Yaskawa etc.

  • Bosnia and Herzegovina

    Macroeconomic Snapshot

    Key Macroeconomic Indicators

    B&H 2016 2017 2018 2019 2020E 2021F
    GDP Nominal (EUR M)15,29016,04217,08117,63016,40017,490
    GDP Real, %3.1%3.2%3.6%2.6%-4.0%3.0%
    GDP Per Capita (EUR)4,5234,7244,9705,0565,0595,163
    Inflation, % EOY-0.3%1.3%1.6%0.3%-1.5%2.9%
    Net FDI (EUR M)200300300458262437
    Public Debt, % GDP39.0%35.0%33.6%32.2%38.7%40.3%
    External Debt, % GDP80.9%77.2%73.9%72.2%74.1%71.9%

    Foreign Reserves (EUR M)


    Trade Account Balance, % GDP

    FX Rate, EUR/BAM (EOY)
    AVG Net Salary (EUR)428434449469455468
    Unemployment, %25.4%20.5%18.4%15.7%16.7%16.4%
    Population (M)
    Doing Business7981868990-

    Sources: Statistical Office of Bosnia and Herzegovina, Erste Bank, UniCredit Bank


    Moody’s B3; Stable
    S&PB; Stable
    Fitch -

    Political scene

    • Bosnia and Herzegovina consist of two entities – the Federation of Bosnia and Herzegovina and the Republic of Srpska and Brčko District.
    • The leaders agree that economic strengthening and EU accession are key to the country’s development.
    • In September 2016, EU accepted Bosnia and Herzegovina’s membership application.
    • In October 2018, the elected members of the B&H Presidency are Šefik Džaferović (SDA), Željko Komšić (DF) and Milorad Dodik (SNSD).

    Investment climate

    • Strong export growth as a result of higher energy sector capacities and food exports liberalisation with Turkey, EU and Russia.
    • The Consolidation plan (Reform Agenda), launched in 2015, and improvement in tax collection were key forces for the reduction in the budget deficit.
    • In September 2016, B&H and the IMF signed a three-year EUR 555M under the Extended Fund Facility (EFF) to support a more competitive economy that can attract investments and create jobs in the private sector.
    • The energy restructuring program is expected to pull in more foreign investments.
    • The Government set up a system aimed at attracting foreign investors - a stable currency linked to the EUR, low personal and corporate income tax and equal rights for foreign investors.
    • Bosnia and Herzegovina signed the CEFTA, EFTA and a free trade agreement with Turkey.
    • 95% of products from B&H are exempted from all taxes when exported to the EU since January 2015.
    • Standard & Poor's and Moody’s credit ratings, - S&P grade B with positive outlook; Moody’s grade B3 / stable outlook.
  • North Macedonia

    Macroeconomic Snapshot

    Key Macroeconomic Indicators

    GDP Nominal (EUR M)9,65610,01510,72311,20010,70011,200
    GDP Real, %2.8%0.2%2.7%3.6%-5.0%3.4%
    GDP Per Capita (EUR)4,6564,8265,1415,3145,1075,353
    Inflation, % EOY-0.2%2.4%0.9%0.4%2.3%1.5%
    Net FDI (EUR M)319180623326169250
    Public Debt, % GDP48.8%47.7%48.6%48.9%60.3%62.6%
    External Debt, % GDP74.7%73.6%73.7%72.2%84.2%84.0%
    Foreign Reserves (EUR M)2,6132,3362,8673,2633,4003,300
    Trade Account Balance, % GDP-18.8%-17.9%-16.2%-16.8%-17.1%-17.0%
    FX Rate, EUR/MKD (EOY)61.561.561.561.561.761.6
    AVG Net Salary (EUR)363372394410426438
    Unemployment, %23.8%22.4%20.7%17.3%16.8%16.8%
    Population (M)
    Doing Business List1210111017-

    Sources: National Bank of North Macedonia, National Statistical Office, IMF, Addiko Bank, Erste Bank, UniCredit Bank


    Moody’s -
    S&PBB-; Stable
    FitchBB+; Negative

    Political scene /

    • After signing the Prespa Agreement in June 2018, North Macedonia finally changed its name, ending a decade-old dispute with Greece.
    • The name change started the normalisation of North Macedonia’s relations with neighbouring Greece.
    • The new name paved the country’s way to become the 30th NATO member in late March 2020.
    • A new government was elected at the early parliamentary elections held on 15 July 2020.
    • On 18 March 2020, the President of the Republic of North Macedonia declared a 30-day state of emergency due to the COVID-19 outbreak. The state of emergency was extended three more times and ended on 22 June 2020.

    Investment climate /

    • Rapid economic growth is predicted for the upcoming period.
    • In the first half of 2020, foreign investments in the amount of EUR 122,6 million were realised, which is an increase from the first half of 2019.
    • Improvements on the labour market, caused by active labour policies, led to an unemployment rate decrease which should result in demand strengthening.
    • The normalisation of North Macedonia’s relationship with Greece should further impact trade balance, as higher trade volumes could be expected.
    • The national currency (denar) remained stable in comparison with the Euro and should remain at the same level in upcoming years.
    • North Macedonia has been placed on the 17th position of the 2020 Doing Business List.
    • North Macedonia is a signatory of five trade agreements – EFTA, CEFTA, SAA (Stabilisation and Association Agreement) with EU member-states, Turkey and Ukraine.
    • The country signed agreements for the avoidance of double taxation and investment protection treaties with many European countries.
    • The “One-Stop-Shop” system enables investors to register their businesses four hours after the application submission – though, in practice, the process takes between one to two business days.
  • Montenegro

    Macroeconomic Snapshot

    Key Macroeconomic Indicators

    MNE 2016 2017 2018 2019 2020E 2021F
    GDP Nominal (EUR M)3,9544,2994,6634,9084,2364,645
    GDP Real, %2.9%4.7%5.1%3.6%-15.0%7.5%
    GDP Per Capita (EUR)6,3546,9087,4957,9026,8227,480
    Inflation, % EOY1.0%1.9%1.6%1.0%-0.2%1.3%
    Net FDI (EUR M)372486326344347386
    Public Debt, % GDP64.4%64.2%70.1%78.8%100.2%97.8%
    External Debt, % GDP162.6%160.6%164.7%166.6%199.2%189.2%
    Foreign Reserves (EUR M)7808771,0791,2211,279-
    Trade Account Balance, % GDP-41.9%-43.3%-44.4%-42.1%-36.9%-37.0%
    AVG Net Salary (EUR)499510511515506508
    Unemployment, %18.2%15.4%15.2%15.1%17.0%17.0%
    Population (M)
    Doing Business4851425050-

    Sources: Statistical Office of Montenegro, IMF, Addiko Bank, Erste Bank, World Bank


    Moody’s B1; Stable
    S&PB+; Negative
    Fitch -

    Political scene /

    • Milo Đukanović as the current president of Montenegro is leading the state with pro-European and pro-Western politics
    • Montenegro became a member of NATO in June 2017,
    • The country obtained EU candidacy status, with 32 chapters opened, out of which three chapters have been temporarily closed.

    Investment climate /

    • At the end of 2018, the Government signed a contract on the construction of a 250 MW solar power plant at the Briska Gora, Ulcinj with a consortium of companies.
    • The consortium is planning to create 226 new jobs with a total investment of EUR 200M.
    • The plan is for local companies to participate with EUR 20M in the total investment.
    • An increase in FDI is expected to be sparked by new privatisations.
    • The economic growth model should remain more or less the same in the next period.
    • It should rely mainly on FDIs, as the government expects more interest in tourism projects, privatisations, the reconstruction of airports and energy projects.
    • The Government adopted the Fiscal strategy for the period of 2017 – 2020, aimed at reducing the public debt level and improving opportunities for new borrowings on foreign markets.
    • A ban on additional public employment and the optimisation of public wages, as a part of the strategy, should have a positive effect on public finances.
    • Foreign investors have the same status as domestic investors.
    • They may invest in any industry and are free to transfer funds, assets and other goods, including profit or dividends, and acquire rights to real estate property. 
    • Montenegro has free trade agreements with CEFTA, EFTA, Russia, Turkey and Ukraine, with access via land, sea and sky to a market of more than 650M people.
    • The Government plans to offer citizenship to foreign investors who are willing to invest in the country, especially in the undeveloped north and the project is ongoing.
    • Moody’s set its rating at B1 with a positive outlook, while S&P’s rating stands at B+ with stable outlook, both of which are indicators at a good and stable macro environment.
  • Albania

    Macroeconomic Snapshot

    Key Macroeconomic Indicators

    GDP nominal EUR (Bil.) 10.310.711.612.813.612.713.6
    GDP real (%) 2.2%3.3%3.8%4.1%2.2%-6.15.5
    GDP Per Capita (EUR) 3,563.03,727.14,024.34,448.34,766.65,015.45,379.3
    Inflation (average) % (EYO) 1.9%1.3%2.0%2.0%1.4%1,1.4 %2.4
    FDI (EUR M) 890.4942.5899.91022536277* *
    Public Debt, % GDP  68.8%68.7%66.9%65.1%63.876.675.2
    Domestic Debt Stock/GDP38,44%38,11%37,20%35,58%35,37%34,94%*
    External Debt Stock % GDP 34,23%34,27%32,89%32,27%30,48%31,77%*
    Foreign reserves (EUR M) 2,880.02,945.02,995.93,367.33,359.63,583.63,695.8
    Trade Account Balance, % GDP -17.3%-16.8%-15.1%-13.87%-13.8%-15.4-13.1
    Unemployment, % 17.5%15.6%14.1%12.8%12.913.612.2
    Population (M)
    Doing Business 66.0660.5068.9068.7069.5167.7*

    Source: Information Technology Audit in Statistics Institute (INSTAT), Bank of Albania, Ministry of Finance and Economy.
    *No updated info

    Political scene/

    • Albania is a parliamentary republic based on the separation and balancing of legislative, executive and judicial powers. The Socialist Party of Albania (PS) is in power after the 2017 elections. The biggest opposite parties in Albania are the Democratic Party of Albania and Socialist Movement for Integration.
    • On 25 April 2021 the 2021 Albanian parliamentary election will be held. The Democratic Party of Albania and The Socialist Movement for Integration will enter in this election as a coalition. Based on the recent amendment to the Election Code, coalition parties must now submit only a joint list of candidates and register as a single electoral subject, rather than running separately, with their total votes being counted together as before.
    • In 2009, Albania became member of North Atlantic Treaty Organization (NATO);
    • Albania presented its application for membership in the European Union in 2009. In June 2014, EU granted Candidate Status for Albania. In 2019, the EU did not open membership talks with Albania as expected, however, on 26.03.2020 the EU decided to start membership negotiations with Albania.

    Investment climate/

    • Based on the Albanian Draft budget for 2021, the state shall continue to support reforms undertaken to promote economic growth, employment, improve of the services quality for citizens.
    • Budget priorities for 2021:
      • The reconstruction process will be financed with 28 billion ALL in 2021, meanwhile, over 1.5 billion ALL are foreseen to continue financing the rent bonus for homeless families as a result of the earthquake of November 26 2019;
      • Health will continue to be funded with priority, with special attention paid to tackling the COVID-19 pandemic, including the purchase of the Anti-Covid 19 vaccine, as well as a 40% pay raise for doctors, nurses and laboratory technicians of the health system with a total annual cost of 4.5 billion ALL;
      • Education will benefit from increased funding, with a 15% increase in the salary of teachers of the pre-university education system at a cost of 3.5 billion ALL.
      • Farmers, in addition to the grant support scheme from the state budget and IPARD funds as well as the guarantee fund co-financed by the EBRD, will be able to benefit from the oil subsidy scheme, which will cost the state budget for 2021 about 1 billion ALL.
    • Public investments for 2021 are projected at 7,2% of GDP or ALL 120.6 billion.
    • The country signed agreements for the avoidance of double taxation and investment protection treaties with many European countries and adopted the internal legislation.
    • Albania’s main relevant partners in economic development: • World Intellectual Property Organisation (WIPO) (1992); • World Trade Organisation (WTO) (2000); • EU Stabilisation Association Agreement (SAA) (2009); • FTA, CEFTA, EFTA; • Main International Organisations and Financial Institutions present in Albania since early 1990s: • International Monetary Fund (IMF); • World Bank; • United Nations Development Program (UNDP); • European Bank for Reconstruction and Development (EBRD); • Islamic Development Bank.
    • Albania’s official currency is the Lek (ALL). The Bank of Albania (BoA) determines, approves, implements and retains control over monetary policy.
    • The Law on Foreign Investments provides “special state protection” for investments / projects exceeding EUR 10 million. Such protection is granted where a dispute arises between the foreign investor and a private party claiming title over the land where the project is or will be built and/or developed. This protection involves the state replacing the foreign investor in a court dispute and undertaking to compensate the claimant if the court rules in its favour.
    • Fiscal incentives are granted to the tourism and IT sectors.

    *For the first quarter of 2020