Minister of Economy and Regional Development Nebojsa Ciric said today that over €175 million has been invested in the Serbian textile industry within the programmes for support to investments and creating new jobs.

At a "Textile industry in Serbia – investment opportunities and cooperation" conference, organised by the Serbian Investment and Export Promotion Agency (SIEPA), Ciric said that this enabled the opening of approximately new 7,000 jobs, while the government supported investors with more than €30 million.

The Minister said that the textile and automotive industry are the two sectors in the country in which the incentives successfully attracted investors and new jobs.

He said that some German companies, with which the Serbian textile producers recently spoke in Frankfurt, showed interest in investing in Serbia.

Ciric recalled to Italy's Benetton will invest €50 million in Nitex and, after completion of the modernisation in 2012, Benetton will employ 2,700 people and will have an annual production worth approximately €75 million, more than 90% of which will be for export.

Serbia is facing two key problems to be solved - the "gray economy" and uncontrolled imports from the People's Republic of China, said Ciric.

He pointed out that the line ministry is aware of the difficulties, especially as the tax benefits in Serbia are high, standing at about 64% of the total amount of net earnings.

Ciric said that the introduction of tax incentives for new employments is a first step towards systematic reduction of taxes and contributions on wages in Serbia.

Currently this is not possible as the lack of inflow to the budget would have to be compensated by increasing the value added tax or other taxes, which would be counterproductive, he said.

SIEPA Director Bozidar Laganin stated that Serbia has so far attracted over $20 billion in FDI and huge contribution in this respect was made by investors in the Serbian textile industry.

Laganin recalled that Serbia is currently a signatory of free trade agreements with the EU, the United States, Russia, Belarus, as well as countries of the Central European Free Trade Agreement (CEFTA) and the European Free Trade Association (EFTA), noting that all of this indicates considerable export potential in the future.

The conference is dedicated to Serbia’s investment potential in the textile industry, a Decree on attracting FDI, a new programme of the National Employment Service, implementation and benefits of trade agreements, customs regulations, the Law on free zones and an analysis of the current issues in corporate operations.