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Business Survey 2014
Belgrade
November 21, 2014#1000preduzeca
Methodology
Business Survey 2014
#1000preduzeca
Methodology
Realization: research was conducted in the period between 3rd of September and
1st of October 2014
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: 1009 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
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Description of Surveyed Businesses
Business Survey 2014
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Item Measure
# Companies participating in survey / # invited 1009 / 3988
Founded before / after 2000 48% / 52%
Profitable / unprofitable 2011-132011: 90% / 10%2012: 88% / 12%2013: 86% /14%
Characteristics of Surveyed Companies
5, 39%
5 - 10; 29%
10 - 20; 16%
20, 17%
Employment€ 100,000, 29%
€ 100,000 - 500,000; 39%
€ 500,000, 30%
Annual Revenues
% of participants in survey
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Gender differences
11.2
2.0
7.8
0.6
MenWomen
Employees (on average)
Owners/Managers (on average)
Work force Ownership structure
78% 80%
64%
13% 11%
28%
Male majority ownedFemale majority owned
Total Enterprises Entrepreneurs
Women make up 36% of employees and 27% of managers.
Men own more than half of the company in 78% of firms
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Sales by Market
Hometown; 62%
Other towns / regions; 30%
Former Yugoslavia coun-tries (excluding Slovenia);
5%Other countries (the EU,
Russia, etc); 3%
Average for All Surveyed Companies
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Business Associations
2011201220132014
36%18%
13%12%
Training, education and information dissemination
Organization of business fairs and support in placement of products
Advocating to the Government for the regulatory reforms
25%
21%
26%
35%
42%
50%
37%
33%
17%
Negative Neutral Positive
Membership by year
Evaluation 2014
Membership 2014
Total Manufacturing Trade Services Small Medim Large
12% 11% 7%18%
11%17%
38%
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Expectations for the near future
9
Specific expectations
Do you expect increase, decrease or no change in that area/aspect?
2014
2013
2012
2011
2014
2013
2012
2011
2014
2013
2012
2011
10%
12%
15%
11%
15%
16%
23%
14%
7%
5%
9%
6%
61%
67%
66%
58%
37%
45%
43%
35%
56%
58%
52%
42%
26%
20%
19%
31%
43%
36%
34%
51%
31%
35%
39%
52%
Decrease No change Increase
Introduction of new products/services
Net profit
Number of employeesNumber of employ-ees
2014 14% 38% 44% 4%
Decrease No change Increase Refusal
Total revenue
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Reform Impact
Business Survey 2014
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What changed in the last year?
Significant ImprovementInformation about reforms
Business participation in reformsSenior management time dealing with red tape
Procedures for payment of wage taxes and contributions
Type of collateral required by banks
Some ImprovementTime and money spent on regulatory issues
Para-fiscal chargesWage taxes and contributions
Administrative proceduresCourt procedures
Inspection surveillanceConstruction permits (time)
Labor lawCustoms and trade procedures
Customs dutiesExcise taxes
Service in financial institutions
No ImprovementTax administration
Payment transactionsBusiness licenses
CorruptionInflation
Shadow EconomyBank interest rates and fees
Amount of collateral required by banks
WorseAccess to finance
Construction permits (cost)Fairness in public procurement
VAT rateExchange rate volatility
Evaluation of New Reforms
Increase of VAT rate
Increase of penalties for tax violations
Amendments to the Labor law
Amendments of procedures for certification of health cards
Inclusion of tax inspectors
Adoption of stimulating measures for employment
Amendments of procedures for registration and deregistration of employees
Process of registration real estate rights
Extension of the deadline for for the submission of the VAT returns
Submission of annual financial report to Business Registry
Submission of tax decisions by mail
Consolidated payment of taxes and contributions
70%
32%
19%
18%
17%
17%
14%
8%
8%
7%
7%
7%
25%
40%
52%
44%
51%
51%
41%
52%
35%
46%
38%
31%
2%
17%
23%
32%
24%
27%
37%
20%
54%
41%
51%
58%
1%
4%
1%
0%
2%
2%
2%
10%
0%
0%
0%
2%
7%
5%
6%
6%
4%
6%
11%
3%
5%
4%
4%
Negative (1+2) Neutral Positive (4+5) Not applicable Don't know/ Refusal
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What changed from 2011 to 2014?
Significant ImprovementInspection surveillance
CorruptionTransparency & predictability
Quality of public dialoguePublic procurement
Wage taxes and contributionsManagement time dealing with regulations
Duration of loan approval process
Some ImprovementPara-fiscal chargesBusiness licenses
Enforcement of judgmentsType of collateral required for loans
Interest rates and loan feesDuration of loan term
Business association services
No ImprovementInflation
Exchange rate volatilityCustoms duties
Tax administrationAdministrative procedures
Payment transactionsConstruction permits
Labor lawCustoms procedures
Amount of collateral required for loans
WorseCourt procedures
Availability of financeType of finance used
VATExcise taxes
Quality of service in banksReporting requirements by banks
Time and money spent on regulatory issues M
oney
Tim
eDuring the last 12 months has your company spent more or less money and time dealing with regulatory issues compared to the previous year?
2011
2012
2013
2014
56%
47%
33%
28%
40%
50%
63%
66%
4%
3%
4%
5%
More money
The same amount of money
Less money
2011
2012
2013
2014
47%
37%
31%
22%
49%
56%
66%
69%
3%
7%
3%
9%
More time
The same amount of time
Less time
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Senior management time spent in dealing with regulatory requirements
2011 2012 2013 2014
Up to 10% of work time 17% 12% 23% 29%
From 10 to 20% of work time 29% 26% 32% 28%
From 20 to 50% of work time 42% 44% 33% 35%
More than 50% of work time 12% 18% 12% 9%
What is the amount of senior management time spent in dealing with regulatory requirements?
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Corruption, Transparency, & Gray Economy
Business Survey 2014
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Corruption in public administration
2011
2012
2013
2014
41%
33%
16%
17%
38%
41%
38%
42%
20%
26%
46%
42%
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
2014
4%
2%
1%
1%
8%
6%
5%
4%
88%
92%
94%
95%
Yes, we had to pay
Yes, but we didn't pay
No, I have no such expe-rience
Have you experienced blackmailing by a public servant in an administrative procedure?
Reported use of private
connections
2011
2012
2013
2014
21%
10%
8%
5%
33%
40%
20%
27%
46%
51%
72%
68%
Regularly
Rarely
No, never
Have you ever used some private connections in dealing with public administration issues?
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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
3.4
3.2
3
3.7
2.9
2014201320122011
Connections with political parties
Private connections
Bribing members of the ten-der 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
#1000preduzeca
Grey economy estimates
Pay full contributions
Pay only partial contributions
Pay no contributions at all
73%
15%
12%
74%
14%
12%
20142013
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?
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Regulatory Framework
Business Survey 2014
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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%
69
67
62
70
61
28
44
41
34
43
50
35
2014
2013
2012
2011
Please assess the impact of the following elements on your business (percentage of negative ratings)
#1000preduzeca
Inspections
Tax inspection
Market inspection
Labour inspection
Sanitary inspection
Traffic inspection
Tourist inspection
Environmental inspection
Communal inspection
Veterinary inspection
26.0%
33.0%
28.0%
8.0%
3.0%
0.0%
3.0%
2.0%
2.0%
2011 2012 2013 2014
Average amount of fines imposed 2128 € 1655 € 868 € 2022€Average amount of time (in hours) spent by management 70 34 17 12
Average number of visits in the year before 5.5 6.0 3.1 2.2
Average number of visits in the current year 4.8 3.8 2.1 1.6
Base: Those who were visited by inspections(754)
Base: Those who were visited by inspections(2011=738, 2012=755, 2013=816, 2014=754)
What was the most frequent inspection in 2013 in your company?
Basic information on inspections:
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Construction permitsDo you agree with the following statements?
2014
2013
2012
2011
2014
2013
2012
2011
2014
2013
2012
2011
59%
64%
64%
70%
25%
9%
10%
13%
85%
81%
66%
65%
41%
35%
9%
6%
66%
89%
57%
59%
15%
16%
7%
3%
1%
27%
24%
9%
2%
33%
28%
3%
27%
32%
I don't agree I agree Don't know
Costs related with con-struction permits are mod-
erate
Simplification of con-struction permitting
would enable me to ex-pand my business
Number of employeesConstruction permits can be obtained in a reason-
able period of time
#1000preduzeca
The enforcement systemHow would you rate the efficiency of the system for enforcement of judgments?
Base: Private business entities with 3 or more employees:
2011 (N=913), 2012 (N=1020), 2013(N=1029) and 2014 (1009)
Comparison across waves: Total
2011
2012
2013
2014
86%
80%
61%
66%
13%
16%
29%
27%
2%
4%
9%
7%
Very poor/Poor Good Very good/Excellent
*to achieve reliable comparability, only clearly negative and clearly positive marks were included, due to unequal number of missing values
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Hiring Employees
Base: Private business entities with 3 or more employees:
2014 (N=1009)
Please give your reasons that caused you to limit hiring or retaining employees in the past 12 months.
There was no need for new workers due to market conditions
We've hired new people / does not apply to us
Amount of taxes and social contributions
Wages are too high given productivity levels
Lack of qualified employees
Labor law provisions limited fixed term contracts
Paperwork involved in hiring and/or retaining employees
Labor law provisions on severance pay
Labor Law restrictions on firing
Political risks
Other, what?
64%
20%
12%
6%
3%
2%
2%
2%
1%
1%
0%
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Taxes & Charges
Business Survey 2014
#1000preduzeca
The Most Negative External Factors
Other obligatory (quasi-fiscal) charges (communal tax etc.)
Wage taxes and contributions
VAT
Grey economy
Tax administration
Administrative procedures
3
4
4
2
4
5
69
69
65
62
61
60
PositiveNegative
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Macroeconomic Policy
Business Survey 2014
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29
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
88%
74%
78%
83%
70%
59%
66%
51%
40%
42%
12%
24%
20%
16%
28%
38%
32%
47%
56%
56%
3%
1%
1%
1%
3%
2%
2%
4%
2%
Negative Neutral Positive
Please evaluate how the following factors affect the competitiveness of your business
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Access to Finance
Business Survey 2014
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Funding sources
85.2 %
9.7 %
5.1 %
Own FundsBanksOther
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Reasons for Not Borrowing
Base: Private business entities with 3 or more employees:
2014 (N=1009)
If you did not borrow money in the last 12 months, why not?
Used owner’s equity instead of a loan
Have a borrowing need and bank products were not suitable for my needs or risk profile
Have a borrowing need, but decided not to borrow because bank requirements take too much time/cost
Were declined a loan
I did not meet the requirements to obtain a bank loan
Have no need for credit
Refusal
14%
6%
6%
2%
2%
49%
21%
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Types of finance used
Term loansOverdraft
Revolving creditGuarantees
LeasingLetter of Credit
FactoringCorporate Bonds
Issuance of shares
21%30%
58%62%62%
79%82%86%85%
15%13%
17%13%13%
8%6%
6%
31%22%
12%10%10%
3%
19%19%
4%6%5%
2%
9%10%
2%
2%
7%7%7%7%7%8%8%8%7%
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%
27%
29%
9%
6%
2%
2014
2013
2012
2011
Please indicate the type of finance you have used and how often
Type of finance used often and all the time:
#1000preduzeca
Suitability of the available finance How suitable is the available finance to your needs?
Interest rates and fees
Collateral requirements
Denomination of the loan in foreign currency
Denomination of the loan in local currency (d-inars)
Quality of service and support of financial insti-tutions / 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%
91%
77%
72%
60%
58%
55%
51%
54%
2014201320122011
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