Labour Shortages and High Local Fees Among Key Challenges for Small Businesses
Businesses in smaller municipalities across Serbia largely operate within local frameworks. As many as 83% of companies operate almost exclusively within their municipality, with 70% of their revenue generated locally. A survey conducted for NALED by Lidington Research as part of the project “Strong and Important” covered more than 700 business owners from ten municipalities: Ćuprija, Bogatić, Vlasotince, Prijepolje, Tutin, Sjenica, Preševo, Bujanovac, Trstenik and Ivanjica.
Nearly half of small businesses cite strong personal connections and well-developed local business networks as the main advantage of operating locally, while almost a third highlight lower operating costs and favorable transport and utility infrastructure. On the other hand, the key challenge is the lack of workforce, particularly skilled labor, further aggravated by the migration of young people to larger cities and abroad.
More than 80% of local businesses are financed from their own resources, with one third relying on loans from family members. To encourage greater use of national and local support programs, which are still insufficiently available, NALED’s Small Business Council advocates for all relevant information to be available in one place, clearly explained, with simple procedures and support during the application process. Data also show that small businesses still handle most administrative procedures at physical counters, highlighting the need for additional support for digital operations, explained Irena Đorđević Šušić, Head of the Innovation and Entrepreneurship Unit at NALED.
Small businesses most often visit local government counters to report and pay local fees, as well as to obtain various permits and approvals, which takes them on average one to two days per month. The greatest financial burden comes from communal and environmental fees. As priorities for the coming period, entrepreneurs highlight investment in human capital through training and reskilling, as well as improvements in transport and utility infrastructure.
" In order to improve business conditions for entrepreneurs, NALED’s Small Business Council, in dialogue with the relevant ministry, actively advocates increasing the threshold for lump-sum taxation, enabling the transition to the personal income regime, automatic registration of years of service, as well as the possibility of obtaining tax clearance certificates electronically when closing a business. Special focus is also placed on women entrepreneurs using maternity and childcare leave, to ensure full compensation not lower than the minimum wage, as well as continuity of pension contributions during that period, in line with the rights of employed mothers," said Đorđević Šušić.
NALED’s Small Business Council brings together representatives of associations and organizations working with micro, small and medium-sized enterprises and entrepreneurs in Serbia, with the aim of ensuring that the voice of small businesses is more clearly articulated and taken into account in public policy-making, through concrete proposals and support to reform processes.
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