Serbia is a democratic parliamentary republic with a unicameral national assembly. Parliament elects the government, and appoints judges and many other civil servants (such as the management of state-owned companies and presidents of regulatory institutions). Legislative elections are held every four years and the assembly elects the prime minister. The president is directly elected for a maximum of two five-year terms. The current president of the Republic is Aleksandar Vucic and the Prime Minister is Ana Brnabic, both from the the conservative Serbian Progressive Party (SNS). However, institutional checks and balances are weak. Power resides with the governing political parties, which can appoint or remove anyone from office. However, the media and civil society are well developed and politicians face relatively high levels of public scrutiny. Foreign governments and foundations continue to provide most funding for civil society, which is largely independent from local politicians.

The state’s persistent influence and control over the economy are the main drivers of political risk. Over the past several years Serbian Progressive Party (SNS)-led governments have sought to privatise the remaining state-owned companies, but privatisations have not been conducted with transparency and have often taken place without open, competitive bids. Well-connected domestic businesses retain significant influence over the government and its management of the economy. The government lacks the ambition to substantially improve the prevention and repression of corruption. Sectors particularly vulnerable to corruption are those where there is substantial public expenditure involved – including construction, infrastructure and public procurement – or those where there is direct contact with the public, such as education and healthcare. 

Serbia is considered a Flawed Democracy in the 2020 Democracy Index, developed by The Economist Intelligence Unit (EIU), where the country ranks 66 out of 167 countries scored.

The country ranks 64 at the 2020 Human Development Index developed by the United Nations Development Programme.

Businesses continue to face periodic but not critical obstacles to operations. Transport, telecommunications and utilities infrastructure remains below Western European standards, but there has been substantial improvement since the damage caused by NATO’s intervention in 1999. Increased investment in telecommunications and transport is yielding continuing improvements and infrastructure is at or above regional standards. 

Institutional capacity is good and improving thanks to EU-required reforms. State and local institutions are generally competent and capable of implementing and enforcing business regulations. However, corruption persists, especially at a high, political level. Government procurement and privatisation contracts are not always transparent and competitive. Well-connected businesses, loyal to the governing parties, tend to win a large number of government contracts.

Serbian Progressive Party (SNS)-led governments since 2015 have implemented substantial reform to the Labour Code, making labour contracts more flexible and reducing labour costs. However, labour regulations remain more complex than in most other states in the region. While labour market performance has improved in the last decade, as highlighted by Serbia’s sharply reduced unemployment rate and increased labour market competitiveness, quality of employment – such as conditions or benefits – remains a challenge. Several large waves of emigration since the early 1990s have led to many young and educated Serbs leaving the country. Labour productivity in Serbia is low compared with other countries in the region. In addition, the quality of education and training does not fully meet labour market needs.

Restrictions imposed in response to the COVID-19 pandemic are likely to cause significant operational disruption into mid-2021. In the event of an uptick in the infection rate, businesses will likely need to comply with renewed restrictions – including localised measures – at short notice.  

Overall, Serbia ranks 44 out of 190 countries scored at the 2020 Doing Business Index by the World Bank and 94 out of 198 at the 2020 Corruption Perception Index by the Transparency International Organization.

The security situation has substantially improved since the end of the wars in Kosovo, Bosnia and Herzegovina, and Croatia in the 1990s. The army and the police have undergone several rounds of reforms and vetting after the end of the conflicts, with those suspected of violating human rights and war crimes purged from both organizations. The security and law enforcement forces are now under strict civilian and democratic control.

Improved relations with neighboring states and the West have significantly reduced the risk of war and conflict. Although tensions persist in relations with former province Kosovo, these are unlikely to lead to renewed violence, since all political actors in Serbia have ruled out using violence or military force in this dispute. Crime rates are generally low and violent crime is rare. Organized criminal groups, some with links to wartime paramilitary groups in the 1990s, continue to operate but do not pose a direct threat to businesses.

Organized crime is a significant problem in Serbia. Criminal networks maintain links with politicians, bureaucrats and security officials, and far-right organizations. Corruption and poor resources within the security services hinder effective law enforcement and prosecution of crimes, in turn facilitating the further entrenchment of these networks. Despite regular calls for crackdowns on organized crime and corruption, the political will to tackle these issues is lac

Thousands of protesters took to the streets on 7 and 8 July after President Aleksandar Vučić announced new restrictions to curb the spread of COVID-19. A number of protests on 7 July managed to break through a police cordon before being pushed back by riot police. Although restrictions acted as the trigger, the main likely driver of the protests is the perception among a segment of the population of growing authoritarianism and the infringement of freedom of speech.

Although still difficult, Serbia has improved bilateral relations with neighboring states, most of which are members or aspiring members of NATO, reducing therefore interstate war risks. The primary risk of armed conflict is related to Kosovo, which declared independence from Serbia in February 2008; Serbia does not recognize Kosovo's statehood. However, EU-facilitated negotiations between Serbia and Kosovo have opened the way for piecemeal normalization of bilateral relations, although a complete thaw is unlikely without political recognition. The risk of interstate war would increase if Serbia's prospects for EU membership diminished significantly as a result of enlargement fatigue.

Security incidents are likely to be concentrated along Serbia's border with Kosovo, although they are primarily likely to involve illegal logging rather than terrorism. In Sandžak, there is a moderate risk of local Islamist extremists attacking assets or officials affiliated with rival Islamic communities or the state.

Overall, Serbia ranks 51 out of 163 within the 2020 Global Peace Index by the Institute for Economics and Peace.

Serbia is not currently among the most cyber-attacked countries in the world according to Kaspersky cyber threat map.

No vaccinations are required to enter the country.

Serbia ranks 41 out of 195 within the 2019 Global Health Security Index, a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), developed with The Economist Intelligence Unit (EIU).

Parts of Serbia are prone to flooding following extremely heavy rain. Emergency situations have been declared in several municipalities due to floods in July 2020. Details of flood warnings are available via the Serbian Hydro-Meteorological Institute website. In the event of floods affecting your area, you should follow the instructions of the Serbian authorities.

During especially hot and dry periods there is a danger of forest fires.

Serbia lies in a seismically active zone, and earth tremors are common. Serious earthquakes are less frequent but do occur. To learn more about what to do before, during, and after an earthquake, visit the website of the US Federal Emergency Management Agency.

If you plan to visit Serbia, stay informed by the Emergency Management Directorate.