Investment protection and investor-state dispute resolution in Serbia

What is it about?

Serbia’s strategic position at the crossroads of Eastern and Western Europe makes it an important player in regional economic relations and a popular destination for foreign investment. As Serbia works toward joining the European Union, it continues to maintain strong economic connections with countries like China, Russia, Turkey, the United States, and the United Arab Emirates. This book chapter explores how foreign direct investment (FDI) in Serbia has developed since the early 2000s, highlighting major sectors such as automotive, mining, and energy that have attracted substantial foreign capital. The chapter also examines the legal framework for foreign investment protection in Serbia, focusing on the Law on Investments and other regulations applicable to foreign investors and their investments. In addition, the chapter looks at Serbia’s obligations under international agreements—both multilateral conventions and bilateral investment treaties (BITs)—and how these govern investor-state disputes. An overview of notable investment arbitration cases involving Serbia under these agreements shows that Serbia is one of the most active Southeastern European countries in investment arbitrations, many of which relate to unsuccessful privatizations. The chapter further discusses upcoming and ongoing reforms related to resolving disputes between investors and the state, which are closely tied to Serbia’s progress in European integration. It concludes by describing how different parts of the Serbian government are responsible for managing foreign investments and investor disputes, highlighting the country’s unique institutional approach.

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Photo by Maria Ivanova on Unsplash

Photo by Maria Ivanova on Unsplash

Why is it important?

This chapter provides a unique perspective on investment protection and investor-state dispute resolution using comparative economic and legal approaches. It offers a comprehensive overview of foreign direct investment (FDI) trends in Serbia, supported by the latest statistics on foreign investors, including the number and value of projects, as well as key sectors attracting investment. The chapter then outlines the main features of the Law on Investments and associated legislation, along with the institutional framework designed to regulate FDI. Additionally, it analyzes the international investment treaty landscape, including bilateral investment treaties, which enhance the protection of foreign investors in Serbia. Finally, the chapter summarizes all known investment arbitrations involving Serbia or Serbian investors, providing a clear picture of the country’s engagement in dispute resolution.

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