Despite collapsing during the Yugoslav Wars and its associated economic sanctions, the Serbian economy has recovered substantially since sanctions were lifted in 2000. Manufactured products constitute the majority of its exports, concentrated in sectors including electrical products, processed metals, rubber and plastic products, cars, chemicals, and garments. Western European companies, attracted by Serbia’s low operating costs and proximity to their markets, have invested heavily in Serbia. Export growth reached an average of 8% per year between 2012 and 2017, outpacing GDP growth.
Manufacturing and exports have grown since 14 free zones were established in 2008. The zones waive customs duties and VAT for exported products, facilitate access to one-stop shop customs procedures, and allow access to local subsidies. Since 2008, USD 2.3 billion have been invested in the zones, and 28,366 people were employed as of 2017. Between 2012 and 2018, the number of companies operating in the zones rose from 25 to 80. The largest zones are Pirot, Šabac, and FAS Kragujevac, with seven businesses each. FAS Kragujevac hosts a large Fiat Chrysler plant, as well as a cluster of six supporting businesses in the automotive sector.