Overview

For decades, starting a business in Serbia was time consuming and burdened with unnecessary bureaucratic hurdles, as rules inherited from Serbia’s communist past were not business-friendly. Some of the biggest problems: the $5,000 minimum capital requirement, cumbersome inspections, and the commercial courts checking every document. There were 16 commercial courts in charge of registering enterprises, and 131 municipalities dealt with registering entrepreneurs. The practice was so inconsistent that even judges in the same court required different documents. Reform was necessary.

But how to reform? Serbia first enacted a radical change of the laws, and then helped support the new system by establishing a new registry. This case study follows the process from theory to practice.

Main findings

• During its first year of operation, the new Serbian Business Registry Agency registered almost 11,000 new companies—70% more than in 2004—shrinking the informal sector.
• In just 2 years, the number of registered businesses more than doubled.
• The time necessary for starting a business was reduced from 51 days in 2004 to 18 days in 2005.
• The total cost of reform was about €2 million ($2.3 million). The registry is now fully self-financing.