Improving the Incentive Mechanism for Investors in Audiovisual Works Production in the Republic of Serbia

Ministry of Economy of the Republic of Serbia
Describe the main features of the policy/measure: 
At the proposal of the Ministry of Economy, the Government of the Republic of Serbia updated the Decree on Incentives to Investors for Producing Audiovisual Works in the Republic of Serbia (Official Gazette of RS, issues 94/2019-48, 8/2020-5, 63/2020-38, 84/2020-18, 111/2020-3), increasing the percentage of return to the investor from 20% (as defined by the previous Regulation from 2015) to the current 25%. In exceptional cases, and provided that it is an audiovisual work for the creation of which the relevant budget distributes funding for projects in the Republic of Serbia, for more than 5,000,000 EUR incentive funds are allocated in the amount of 30% of eligible costs. Incentive funds for a special-purpose film are awarded in the amount of 20% of eligible costs. The measure’s goal is to encourage creativity, stimulate cultural and economic activities and increase employment in the field of audiovisual production in the Republic of Serbia, as well as to promote the Republic of Serbia’s potential in this activity, i.e. its infrastructure, production, and service activities. The Ministry of Economy regularly issues an open public call for incentive funds. With this program, Serbia not only encourages filming, but also post-production, TV commercials, visual effects, and other digital audiovisual content, including new formats such as virtual and augmented reality (VR and AR). To be eligible for a refund, an entity must invest at least 300,000 EUR in project implementation for a feature film, TV film, special-purpose film, and TV series (per episode), 150,000 EUR for an animated film, audio and/or visual postproduction of audiovisual works, as well as an animated series per episode, and 50,000 EUR for a documentary film and a documentary TV program. The right to receive incentive funds may be exercised for the production of a feature film, a TV film, and a feature-length documentary lasting at least 70 minutes, as well as an animated film intended for screening lasting at least five minutes; a TV series, with each episode lasting at least 40 minutes; an animated series of at least ten episodes lasting at least 50 minutes; and a documentary TV program lasting at least 40 minutes. The incentive program implies a percentage return of funds invested by national or foreign investors in the production of audiovisual works in Serbia, but only after the investment has been completed and verified by an independent audit, and it only applies to eligible costs, i.e. payments made by national juridical and natural persons. All aspects of project submission, selection, and reporting are regulated by the “Rulebook on the Types and Contents of Qualified and Unqualified Cost Explanations, as well as the Forms of Requests for Incentives Allocation and Payment to Investors Who Produce Audiovisual Works in the Republic of Serbia” (Official Gazette of RS, issue 39/2018). The program’s implementation is entrusted to the commission, while applications and communication with applicants are handled by the Film Center Serbia, which carries out administrative and technical tasks for the commission. The Ministry of Finance, the Serbian Chamber of Commerce, the Ministry of Culture and Information, and the Film Center Serbia are all represented on the commission for the implementation of regulations, while the organization “Film in Serbia” has been working on the international promotion of Serbia as a location for filming projects for more than 10 years and is significantly helping the incentive program to attract a large number of international productions, thereby contributing to the growth of the national economy.
What are the results achieved so far through the implementation of the policy/measure?: 
During the observed period, a total of 212 projects received financial support from the program of incentives for investors to produce audiovisual works in Serbia: 28 projects were supported in 2017, 65 in both 2018 and 2019 separately, and 54 in 2020.
Financial resources allocated to the policy/measure in USD: 
During the observed period, a total of 26,653,641 USD in incentives were paid. (In 2017, 3,672,588 USD was paid, followed by 7,535,119 USD in 2018, 9,678,686 USD in 2019, and 5,767,248 USD in 2020).
Partner(s) engaged in the implementation of the measure: 
Name of partnerType of entity
Film Center Serbia
Public Sector
Serbian Film Commission “Film in Serbia,”
Civil Society Organization (CSO)
Ministry of Culture and Information,
Public Sector
Serbian Chamber of Commerce
Has the implementation of the policy/measure been evaluated?: 
If yes, what are the main conclusions/recommendations?: 

The Scientific Research Center of the Faculty of Economics, University of Belgrade, at the request of the Serbian Film Commission “Film in Serbia” conducted an “Economic Impact Analysis of the Audiovisual Production Sector and the Efficiency of the Ministry of Economy’ Incentives for Audiovisual Content Production in Serbia 2016-2019.” The analysis’ findings and recommendations are summarized in the table below:



Serbia shows a growing trend of international productions of audiovisual content that use incentives, and this positive trend correlates with the positive growth trend of the total budget allocated for the purpose of incentives.


It is necessary to clearly define the expected level of incentive budget increase (or the level at which the budget will be maintained) for at least two years, but preferably for at least five years, in order to improve Serbia’s competitiveness and visibility in the global market and contribute to the positioning of the country as a desirable destination for international clients.

The percentage of the utilized budget intended for incentives for the production of audiovisual content is at a high level of 92% to 95%.


In order to maintain or increase the utilization rate, it is necessary to further improve the administrative procedures for applying for funds and approving funds.

Serbia is characterized by excellent destination portfolio diversification in the sector of audiovisual content production. This allows for more precise market and geographic targeting. The incentive structure is designed in such a way that it fosters portfolio diversification: movies, commercials, series, and post-production are all covered equally.

It is necessary to maintain the established level. This means that the incentive system in this sector should be oriented towards further fragmentation and “new” areas of audiovisual content production in order to broaden the potential market of international clients (e.g., video games, web series, VR, etc.).

Stimulating productions in formats such as commercials and post-production has allowed Serbia to stay out of competition in the film market, which is currently beyond its capacities, and to advance its capacities (both infrastructural and human) through a large number of advertising and post-production projects, which contribute to the growth of the number of completed international productions in a shorter period.

It is necessary to maintain the current system, level, and criteria for granting incentives for a longer period in order to contribute to the sustainability of the destination portfolio, but also to influence specialization for projects in new areas of production (e.g., video games, web series, VR, and the like), as well as projects in advertising and post-production, where the initial budgets meet the Ministry of Economy’s minimum requirements.

70% of projects that have benefited from incentives have a total budget of less than 300,000 EUR, and the smallest number of only 3% falls into the budget size category of 400,000-500,000 EUR.

It is necessary to maintain the criteria for providing incentives at the current level for a longer period, because it contributes to raising Serbia’s competitive advantage in the global market and its visibility in the wider market of potential international clients.

The amount and structure of the budget of subsidized projects further confirm that the creators of the incentive policy have succeeded in positively influencing the diversification of the product portfolio in one more way.

It is necessary that the implementers of the incentive policy, but also the users of the incentives, maintain the established market balance, with an equal focus on all present formats of audiovisual content production.

The direct return on direct investment by the state in the form of subsidies is 2.4.

For every 1 unit of paid incentives for the production of commercials, films, and series, on average 2.4 units are directly returned to the budget.

The total return on investment by the state in the form of subsidies is 5.38.


For every 1 unit of paid incentives for the production of commercials, films, and series, an average of 5.38 units are directly returned to the budget.

When “leakage effects” is excluded, every unit of incentives paid for the production of audiovisual content attracts an average of 5.2 units of total consumption.

Over the following period, it is necessary to compensate for this decrease, which amounts to an average of 0.2 EUR, by increasing the capacity of national stakeholders, so that these services are not “bought” abroad.

The number of employees in the sector in 2019 increased by an average of 57% compared to 2016.


The increased number of employees in the sector is a consequence of the increased efficiency of the sector, and support through subsidies is certainly one of the factors increasing its attractiveness.

There are over 11,000 full-time employees (FTEs).


In addition to making a significant fiscal direct and total contribution, the audiovisual content production sector employs a significant number of people. Following the reduction of administrative procedures, the effects on this sector of the economy are likely to intensify.

The total market for the production of audiovisual content on an annual level is on average 15 times larger than the number of projects subsidized by the state.


It is necessary to view the level of incentives as a sort of accelerator for the entire sector, but understanding the effects of incentives should not be limited to a small number of projects that have applied.

The number of projects that used incentives is ¼ the number of international productions, which means that national companies for each subsidized project implement an average of four additional projects for international clients.


The entire sector is evolving thanks to incentives, and it is clear that each supported project is accompanied by additional four projects for international clients.

It is necessary to preserve the criteria and transparency of the process in order to maintain or increase this ratio; the increase can be achieved by reducing administrative procedures.

The total contribution of international productions to the development of tourism in Serbia is measured by the figure of 44,889 overnight stays and the contribution of 3,680,898 EUR.


It is necessary to continue the system of “film-friendly” destinations and hotels, in order to improve communication with potential productions and provide appropriate destination support, especially for projects involving large teams and a large number of overnight stays in a short period.

Total taxes paid on VAT, contribution tax, and annual income tax amount to 11,567,613 EUR in the analyzed period.


It is necessary to observe the contribution of the entire sector to the country’s economic development based on total activities, which is measured based on the amounts of paid taxes. It is clear that this contribution is at a very high level based on all activities of companies in the sector, and not only based on subsidized projects.

Goal(s) of UNESCO's 2005 Convention
Cultural Domain(s)
Cinema/ Audiovisual Arts
Media Arts