Measures to improve the business environment

Results of Measures Implemented to Subsidize Business Entities Through the Local Economic Development Program of the City of Niš in 2023

The Office for Local Economic Development has been responsible for implementing all Local Economic Development Programs of the City of Niš since 2017. In 2023, two groups of measures were developed to enhance the competitiveness of the Niš economy:

1. Measures aimed at strengthening existing business entities in the city, in the form of subsidies—non-repayable financial support to the private sector.

2. Measures targeting the direct attraction of new investors, including the organization of the Advanced Technology Forum, the enhancement of the City’s tourism potential, agricultural incentives, non-financial support for startups, and more.

Both groups of measures aim to create a better business environment and to motivate private capital for further investments.

4.1.1.1. Support for Micro, Small and Medium Enterprises (MSMEs) and Entrepreneurs to Enhance Competitiveness

This measure provides assistance to micro and small enterprises and entrepreneurs to increase the competitiveness of their products and improve their market position. Eligible recipients include micro, small, and medium-sized enterprises and entrepreneurs registered in the City of Niš and not facing financial difficulties. According to specific criteria, startups using services of the Niš Science and Technology Park (NTP) and co-working spaces within the City are also eligible.

Priority is given to companies that have not previously received de minimis aid through the Local Economic Development Program, companies engaged in circular economy, energy efficiency, and green economy, as well as those owned by women or young people under 35 years of age.

The funds cover up to 50% of eligible costs excluding VAT. The maximum non-repayable amount per business entity is RSD 400,000 (excluding VAT), depending on the purpose.

Eligible expenses include:

• Purchase of new and/or used (up to 5 years old) equipment and/or machines, machine parts, and specialized tools that directly contribute to the development of the company’s core activities.

Ineligible expenses include:

• Purchase of vehicles

• Office and other furniture

• Software purchases, website creation, portals, and digital marketing

Total allocated funds for this measure: RSD 5,000,000

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4.1.1.2. Support for Micro Enterprises / Startup Teams to Develop Innovative Activities

This measure provides financial support for the development of innovative activities, with a maximum amount of RSD 1,000,000 per beneficiary for the development of innovative ideas over a period of up to 12 months. Recipients are required to hire unemployed persons (in the case of micro-enterprises), or to register a company (in the case of startup teams) following the allocation of funds.

Innovative activities refer to R&D efforts aimed at creating new products, technologies, processes, or services, or significantly improving existing ones, in line with market needs.

Objectives:

• Support the development of innovative activities and high-tech products, services, and processes

• Increase the competitiveness of business entities

• Facilitate integration into international markets

Eligible applicants include startup teams and micro-enterprises headquartered in the City of Niš, not older than three years at the time of application.

Funds may cover:

• Equipment and tool purchases

• Research and testing expenses

• Compensation for team members

• Other justified costs related to project implementation (up to 12 months)

Selected teams will be provided with workspace (if needed) and free one-year membership in the Niš Science and Technology Park.

Total allocated funds for this measure: RSD 6,000,000

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IMPLEMENTATION

In 2023, the City of Niš implemented the Local Economic Development Program through two public calls:

1. Public Call for Support of Innovative Activities

A total of RSD 6,000,000 was allocated, with a maximum of RSD 1,000,000 per applicant, contingent upon hiring unemployed persons (for micro-enterprises). The aim was to support the development of innovative high-tech companies, increase competitiveness, and fund market-oriented projects.

Applications and Selection Process:

• 18 applications were submitted on time.

• After administrative review, 14 applications were corrected and deemed eligible.

• 4 were disqualified for various reasons (e.g., duplicate applications, withdrawal, or incorrect categorization).

• On September 28, 2023, 14 applicants presented their projects (pitching) at the Serbian-Korean Information Access Center (SKIP Center).

• Based on evaluation criteria, the Commission proposed awarding funds to 6 applicants, totaling RSD 5,955,000.

The remaining RSD 45,000 was recommended to be reallocated to the second measure (MMSME competitiveness support). A resolution was prepared and signed by the Mayor of Niš, after which contracts were awarded and project implementation commenced. Final reports are currently being submitted for review.

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2. Public Call for Support to Improve MMSME Competitiveness

A total of RSD 5,000,000 was allocated to co-finance eligible expenses (excluding VAT) related to the purchase of equipment and tools that directly impact the business’s core activities.

Details:

• Support covers up to 50% of eligible costs (max RSD 400,000 per applicant)

• 28 companies applied

• The Commission recommended funding for 18 applicants who met the criteria and achieved the highest scores

• On September 14, 2023, the Mayor issued a resolution approving the full amount of RSD 5,000,000

• Contracts were signed and implementation began as scheduled

• All recipients, except for one who withdrew, have submitted final reports and evidence of proper fund usage to the Commission