SERBIA Trends and Developments Contributed by: Miodrag Jevtić, Gecić Law
Hybrid and Complex Forms of Cross-Border Financing Some foreign investors expressed interest in employing hybrid or complex forms of cross- border financing for acquisition purposes. These include equity kickers, mezzanine and perfor- mance-based financing, cashless exercise of warrants, convertible loans, preference shares with specific rights, etc. The Serbian FX regulatory framework, as inter- preted by NBS, is very conservative and fre- quently does not recognise sophisticated cross- border financial products. The focus of such a regulatory framework is to enable NBS to secure the stability of Serbia’s aggregate payment bal- ance and to react swiftly in case of a significant outflow of cash from Serbia. This is considered a remnant of the times when Serbia faced signifi- cant currency and aggregate liquidity challenges It is also worth mentioning that introducing Real Estate Investment Trusts (REITs) in Ser- bia is expected to impact the financial market significantly and indirectly support acquisition finance. By enabling market-based real estate investment through publicly traded vehicles, REITs will enhance liquidity, attract institutional investors and increase transparency in the prop- erty sector. This shift moves Serbia away from traditional, direct ownership models and opens real estate to broader financing structures. In the context of acquisition finance, more liquid and transparent property markets improve asset valuation and may enable the use of REIT-held assets as collateral in M&A transactions. This is particularly relevant for deals involving real estate-heavy sectors such as retail, logistics and hospitality. Additionally, expected tax incentives and increased investor confidence could reduce back in the 1980s and 1990s. Real Estate and Infrastructure
company) were some of the notable examples of the successful issue of corporate bonds in 2024 and 2025. However, none of these companies stated that the funds would be explicitly used for acquisitions (though use for general business purposes might include acquisitions). Whether corporate bonds will find their place in financing M&A in Serbia is yet to be seen. In 2024, Telekom Srbija issued its inaugural Eurobond worth USD900 million. This issuance was a key step in the company’s financial strat- egy, providing additional funding to pursue its strategic acquisitions and expand its business operations locally and regionally. The Eurobond was well-received by investors, marking a signif- icant milestone in Serbia’s corporate debt mar- ket. The success of Telekom Srbija’s Eurobond issuance signals possibilities for companies to diversify their funding sources, which reduces dependence on local banks. This transaction also represents a broader trend for Serbia, where companies can increasingly access global capi- tal markets. Management Buyouts In 2021, Serbia introduced a specific financial instrument, essentially an option to buy shares in a limited liability company. This is a legal incen- tive for managers and employees to contribute to the company they manage/work in. In prac- tice, this is aimed at the IT sector, which is a significant contributor to the Serbian economy’s exports. Recent trends have shown a steady increase in employing this financial instrument.
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