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Business Survey 2013
Belgrade
November 13, 2013
Methodology
2
Business Survey 2013
Methodology
Realization: research was conducted in the period between 9th of September and
4th of October 2013
Target population: Private business entities in Serbia with 3 or more employees
Sample frame: List of all business entities (enterprises and establishments)
registered at the Serbian Business Register (2012)
Sample size: 1029 business entities
Stratification: according to region, economic activity of business entities and size
Method of data collection: Face-to-face interviews in company offices
Average duration of the interview: 50 minutes
3
Part 1:Description of Surveyed Businesses
4
Business Survey 2013
Item Measure
# Companies participating in survey / # invited 1029 / 3996
Founded before / after 2000 49% / 51%
Profitable / unprofitable 2010-122010: 90% / 10%2011: 89% / 11%2012: 89% / 11%
5
Characteristics of Surveyed Companies
5, 33%
5 - 10; 36%
10 - 20; 16%
20, 15%
Employment
€ 100,000, 42%
€ 100,000 - 500,000; 32%
€ 500,000, 26%
Annual Revenues
% of participants in survey
Sales by Market
6
Hometown; 64%
Other towns / regions; 29%
Former Yugoslavia coun-tries (excluding Slovenia);
4%Other countries (the EU,
Russia, etc); 3%
Average for All Surveyed Companies
Expectations for the near future
7
2013
2012
2011
9%
12%
8%
60%
58%
47%
31%
30%
45%
Pessimistic Neutral Optimistic
2013
2012
2011
2013
2012
2011
2013
2012
2011
12%
15%
11%
16%
23%
14%
5%
9%
6%
67%
66%
58%
45%
43%
35%
58%
52%
42%
20%
19%
31%
36%
34%
51%
35%
39%
52%Decrease No change Increase
Introduction of new products/services
Net profit
Number of employees
General expectations
Specific expectations
Do you expect increase, decrease or no change in that area/aspect?
8
Gender differences
11.2
2.0
7.4
1.4
MenWomen
Employees (on average)
Owners/Managers (on average)
Work force Ownership structure
78% 79%
69%
15% 13%
26%
Male majority ownedFemale majority owned
Total Enterprises Entrepreneurs
69% of the businesses have only up to 5 female employees
16% of the companies have only female managers, while 61% have only male managers
Significantly more “female businesses” are present among entrepreneurs comparing to enterprises
Business Associations
2011
2012
2013
36%
18%
13%
Training, education and information dissemination
Organization of business fairs and support in placement of products
Advocating to the Government for the regulatory reforms
26%
27%
40%
41%
40%
38%
27%
26%
15%
Negative Neutral Positive
Membership by year
Evaluation 2013
Membership 2013
Total Manufacturing Trade Services Small Medim Large
13% 13%7%
20%12%
23%
33%
Part 2:Policy Legal & Regulatory Issues
10
Business Survey 2013
Summary
Significant ImprovementCorruption
Public procurementBusiness licensing
InspectionsSenior management time dealing with red tape
Transparency and predictability for doing businessPublic private dialogue
Some ImprovementTime and money spent on regulatory issues
Wage taxes and contributionsEnforcement of judgments
Exchange rate volatilityIlliquidity constraints
Duration of loan approval process
No ImprovementConstruction permits
Administrative proceduresPara-fiscal chargesTax administration
InflationInterest rate volatility
Access to financeCollateral requirement
WorseCourt procedures
Labor Law proceduresCustoms and external trade procedures
VAT ratesExcise taxes
Customs dutiesQuality and service of financial institutions
12
Negative Impacts on Businesses
Wage taxes and contributions
VAT
Tax administration
Other obligatory (quasi-fiscal) charges
Administrative procedures
Inspection surveillance
Payment transactions including time and money
Labor law procedures and requirements
Obtaining of the business licenses and related requirements
Obtaining of construction permits and related requirements
Court procedures and requirements
Customs and external trade procedures
81%
61%
49%
77%
62%
43%
31%
34%
37%
38%
43%
28%
77%
61%
63%
75%
70%
43%
43%
39%
42%
44%
49%
33%
72%
66%
65%
74%
66%
25%
44%
45%
33%
48%
52%
40%
2013 2012
2011
Please assess the impact of the following elements on your business (percentage of negative ratings)
13
Time and money spent on regulatory issues
2011
2012
2013
56%
47%
33%
40%
50%
63%
4%
3%
4%
More money
The same amount of money
Less money
2011
2012
2013
47%
37%
31%
49%
56%
66%
3%
7%
3%
More time
The same amount of time
Less time
Mon
eyTi
me
During the last 12 months has your company spent more or less money and time dealing with regulatory issues compared to the previous year?
14
Senior management time spent in dealing with regulatory requirements
2011 2012 2013
Up to 10% of work time 17% 12% 23%
From 10 to 20% of work time 29% 26% 50%
From 20 to 50% of work time 42% 44% 20%
More than 50% of work time 12% 16% 7%
What is the amount of senior management time spent in dealing with regulatory requirements?
15
Corruption in public administration
2011
2012
2013
41%
33%
16%
38%
41%
38%
20%
26%
46%
It affects a lot
Sometimes it affects
Does not affect at all
To what extent does corruption in public administration affect your business?
Effects of corruption on
business
Blackmail by a public servant
2011
2012
2013
4%
2%
1%
8%
6%
5%
88%
92%
94%
Yes, we had to payYes, but we didn't payNo, I have no such experience
Have you experienced blackmailing by a public servant in an administrative procedure?
Reported use of private
connections
2011
2012
2013
21%
10%
8%
33%
40%
20%
46%
51%
72%
Regularly
Rarely
No, never
Have you ever used some private connections in dealing with public administration issues?
16
Public procurement
Total
Total
Total
Total
Total
4.1
3.9
3.2
3.1
2.7
3.7
3.6
3.1
3.3
2.8
3.1
3.1
2.6
3.8
3.1
2013
2012
2011
Connections with political parties
Private connections
Bribing members of the tender panel
The best financial offer
The best technical capacity and experience
Base: Those who have experience with public tenders: (2011=400, 2012=400, 2013=293)
How often the following circumstances contribute to winning on public tenders?
Marks from 1 to 5, 1 meaning never and 5 meaning often
17
Construction permits
Costs related with construction permits are moderate
Construction permits can be obtained in a reasonable time
Construction permits are now easier to obtain than in 2009
Simplification of construction permitting would enable me to expand my business
81%
64%
47%
9%
16%
35%
34%
89%
3%
1%
18%
2%
I don’t agree I agree Don't know
Do you agree with the following statements?
18
Inspections
Tax inspection
Market inspection
Labour inspection
Sanitary inspection
Traffic inspection
Tourist inspection
Environmental inspection
Communal inspection
Veterinary inspection
27.6%
25.6%
22.5%
10.8%
3.2%
2.5%
2.4%
2.1%
2.0%
2011 2012 2013
Average amount of fines imposed 2128 € 1655 € 868 €Average amount of time (in hours) spent by management 70 34 17
Average number of visits in the year before 5.5 6.0 3.1
Average number of visits in the current year 4.8 3.8 2.1
Base: Those who were visited by inspections(816)
Base: Those who were visited by inspections(2011=738, 2012=755, 2013=816)
What was the most frequent inspection in 2012 in your company?
Basic information on inspections:
19
Para-fiscal charges
Administrative taxes
Fees for registration of motor vehicles
Compensation for land use
Company name display fee
Environmental taxes
Fee for use of water resources
21%
20%
25%
28%
33%
38%
45%
41%
32%
34%
25%
21%
8%
17%
10%
10%
11%
not burdensome (1+2) burdensome (4+5) Don't know Refusal Not applicable
How burdensome are the following taxes and charges for business?
20
The enforcement systemHow would you rate the efficiency of the system for enforcement of judgments?
*to achieve reliable comparability, only clearly negative and clearly positive marks were included, due to unequal number of missing values
2011
2012
2013
2011
2012
2013
2011
2012
2013
98%
96%
87%
97%
96%
88%
98%
93%
88%
2%
4%
13%
3%
4%
13%
2%
7%
12%
Poor/Very poor Vey good/Excellent
Total
Enterprises
Entrepreneurs
21
Employment Contracts
No temporarily employed
Between 1 and 5 temporarily employed
Between 5 and 10 temporarily employed
Between 10 and 20 temporarily employed
More than 20 temporarily employed
41%
34%
12%
8%
5%
65%
25%
4%
3%
3%
72%
20%
3%
2%
2%
201320122011
No permanently employed
Between 1 and 5 permanently employed
Between 5 and 10 permanently employed
Between 10 and 20 permanently employed
More than 20 permanently employed
1%
38%
28%
17%
16%
3%
49%
22%
13%
13%
3%
47%
23%
14%
13%
201320122011
Temporarily employed
Permanently employed
Out of the total number of employees in your business, how many are working on a temporary contract?
Out of total number of employees in your business, how many are permanently employed?
Part 3:Macroeconomic & Finance Issues
22
Business Survey 2013
23
Economic factors related to competitiveness
Inflation
Wage taxes
VAT rates
Exchange rate volatility
Interest rate volatility
Poor access finance
Illiquidity constraints
Asset price volatility
Customs duties
Excise taxes
89%
80%
78%
77%
70%
61%
60%
47%
46%
46%
10%
18%
20%
21%
28%
38%
38%
51%
51%
53%
1%
2%
2%
1%
2%
2%
2%
1%
3%
1%
Negative Neutral Positive
Please evaluate how the following factors affect the competitiveness of your business
24
Grey economy estimates
Pay full contributions
Pay only partial contributions
Pay no contributions at all
73%
15%
12%
73%
15%
11%
69%
13%
18%
Entrepreneurs Enterprises
Total
According to your estimate, out of the total number of employees working in enterprises that operate in the same industry as your company, for what percentage of employees do the enterprises pay (1) full contributions on salaries, (2) only partial contributions on salaries, and (3) no contributions on salaries at all?
25
Budget cuts aimed at reducing taxes
Cuts in foreign investment tax incentives
Cuts in price subsidies
Cuts in subsidized inputs
Cuts in subsidized loans
Cuts in investing in training for business
Cuts in investing in infrastructure
75%
54%
53%
43%
52%
31%
60%
45%
39%
28%
39%
22%
48%
27%
27%
29%
24%
16%
2013
2012
2011
Which budget cuts for government services would you support in order to lower taxes?
Supported budget cuts:
26
Funding sources
81% of total funding comes from business owners themselves
What percentage of your business’ financing comes from…
2012
2013
70%
64%
23%
15%
1%
3%
2%
2%
1%
2%
0%
5%
3%
8%
Banks Family and/or friends LeasingForeign sources of funding Loans by state institutions Grants/Non-repayable fundsOther
27
Types of finance used
Term loansOverdraft
Revolving creditGuarantees
LeasingLetter of Credit
FactoringCorporate Bonds
Issuance of shares
23%39%
61%60%
66%82%85%
88%89%
12%11%
12%9%
10%8%4%
3%
30%19%
11%12%
11%2%
19%16%
6%10%
4%0%
11%9%2%
2%
6%6%
8%7%7%8%9%8%8%
Didnt use
Rarely
Occasionally
Often
All the time
No answer
Term loans
Overdraft
Guarantees
Revolving credit
Letter of Credit
19%
15%
11%
9%
3%
25%
21%
10%
11%
2%
30%
26%
12%
8%
0%
2013
2012
2011
Please indicate the type of finance you have used and how often
Type of finance used often and all the time:
28
Suitability of the available finance
Interest rates and fees
Collateral requirements
Denomination of the loan in foreign currency
Denomination of the loan in local currency (dinars)
Quality of service and support of financial institutions / banks
Duration of loans
Duration of the loan approval process
Reporting requirements by the bank
96%
74%
50%
67%
61%
93%
73%
70%
56%
50%
54%
56%
49%
90%
76%
72%
64%
64%
57%
54%
52%
201320122011
How suitable is the available finance to your needs?
Part 4:Summary of Progress
29
Business Survey 2013
30
Impact of reform effortsTo what extent do you agree or disagree with the following statements?
2011
2012
2013
76%
73%
55%
20%
19%
36%
4%
8%
9%
Disagree (1+2) Neutral Agree (4+5)
Transparency and predictability for doing business in Serbia increased in the last 12 months
2011
2012
2013
74%
68%
56%
22%
23%
33%
4%
9%
11%
Disagree (1+2) Neutral Agree (4+5)
Quality of public dialogue and debate on macroeconomic and fiscal issues is improved in the last 12 months
2011
2012
2013
78%
58%
50%
17%
28%
35%
5%
14%
15%
Disagree (1+2) Neutral Agree (4+5)
I am aware of and understand the GoS economic growth strategy for businesses
31
Impact of reform effortsTo what extent do you agree or disagree with the following statements?
2011
2012
2013
73%
73%
64%
20%
20%
29%
6%
7%
7%
Desagree (1+2) Neutral Agree (4+5)
The access to finance for your business is improved in the last 12 months
2011
2012
2013
82%
71%
63%
16%
22%
30%
2%
7%
7%
Disagree (1+2) Neutral Agree (4+5)
The burden of laws and regulations decreased in the last 12 months
2011
2012
2013
80%
72%
63%
16%
22%
30%
4%
7%
7%
Disagree (1+2) Neutral Agree (4+5)
Business ability to participate in reforming laws related to the business environment has improved in the last 12 months