After many years during which bilateral relations between Japan and Serbia were mainly nurtured through good political and cultural relations, the economic perspective is finally making its way into this picture. It would be fair to say that foreign direct investments from Japanese companies in Serbia have been steadily progressing in recent history, changing the structure of the domestic economy
Japanese companies today employ around 7,000 people in Serbia, mostly in agriculture, the automotive industry and the IT sector. This is a result of continuous efforts exerted by the central and local governments of Serbia to improve the country’s business environment and establish Serbia as an interesting investment spot that provides easy access to the large markets of various regions, such as the European Union and beyond. Although we are witnessing deep demographic shifts and suffering from the so-called brain drain, the country is still able to offer a good workforce at a reasonable cost. On top of that, there are a number of support mechanisms for foreign investors at the national and local levels that render the investment climate even more attractive.
However, this is only part of the answer to the question – why more Japanese companies are getting Serbian addresses. Specifically, efforts on the Serbian side have been met by equally important strides on the Japanese side, which has flourished under the Western Balkans Cooperation Initiative that was launched by late Prime Minister Abe in 2018.
The Western Balkans Cooperation Initiative is the Japanese diplomatic concept that was developed with the aim of supporting the EU accession of Western Balkan countries. The Initiative has had the most visible effect in Serbia, where a number of Japanese companies have made high-quality investments in alignment with the concept of the Initiative
While the current global economic situation is not conducive to further economic growth and investments, the partnerships already established between the Embassy of Japan, the Japanese Business Alliance in Serbia and the Japan External Trade Organisation, on one side, and the Development Agency of Serbia and the aforementioned national and state bodies, on the other, are providing Japanese companies with enough information and support if they wish to consider Serbia as their investment destination. On top of that, all of the noted actors are working together to contribute to further improving the investment environment in Serbia.
Vojvodina is particularly attractive to investors from Japan at present, thanks to its good geostrategic position, human resources and strong connections with other regions. However, the Serbian Government has established 15 free zones nationwide – not only in Vojvodina, but also in many regions that are gradually being discovered by various foreign companies. Knowing that proximity to external markets is an important and often decisive factor for any foreign company thinking of Serbia as a production spot, the Serbian Government has been exerting a lot of effort to develop key infrastructure throughout the country. Japanese companies have yet to discover these new destinations, which offer access to the human resources being sought by many of the businesses that are relocating their production facilities closer to the markets of the EU.