The Republic of Serbia is in a process of transition, striving to join the EU. Prior to the financial crisis, economic growth had been relatively stable with Serbia's GDP growing by approximately 5% per year. The goal of joining the EU, growing unrest and inequality has forced the fight against corruption into the spotlight. Political instability, organised crime and regional conflicts have plagued the country since the overthrow of former Yugoslav President Slobodan Milosević. Structural inefficiencies and corruption have beset Serbia's public administration, although the overall framework for budgeting has improved.

Positive developments in relation to corruption and investment:

• Serbia has enacted a 2005 Foreign Trade Law outlining guarantees and safeguards for foreign investors. It eliminates previous investment restrictions, extends national treatment to foreign investors, allows for the repatriation of profits, customs duty waivers for imported equipment used as capital-in-kind and provides guarantees against expropriation.
• In 2004, Parliament adopted a new Law on Business Companies that provides greater clarity both in organising and operating a company and in settling disputes in both small and large companies.
• The government initiated a 'regulatory guillotine' project in 2009, aiming to remove one-third of business regulations.

Risks of corruption:

• Sectors in Serbia which are considered to be the most vulnerable to political or grand corruption are those with significant financial transactions, such as public procurement, privatisation, and other large budgetary expenditures.
• Another common type of business-related corruption derives from the large number of regulations that companies have to comply with and the number of licences and permits they need to obtain.