Innovation activity was regulated for the first time in Serbia by the previous Law on Innovation Activity from 2005. Due to various shortcomings that were noticed during the implementation of this law, there was a need for more flexible and fresh solutions, primarily due to new financial modalities.

Therefore, a new Law on Innovation Activity (“Law”) was enacted, which entered into force at the beginning of January this year.

The main novelties of the Law are: (i) defining new innovative entities (startups, spinoffs), as well as investors in innovation activity (business angels), (ii) establishing a network of science and technology parks as an advisory body within the Ministry of Education, Science and Technological Development as well as (iii) establishing a new Register of subjects of the national innovation system now maintained by the Innovation Fund (the “Fund”), whereby the competence of the Fund is expended.

In addition to startups, the Law also introduces the term spinoff, which is a startup launched by an existing company with the aim of developing and commercializing innovations. On the other hand, the notion of angelic investment was often unknown to banks and state bodies until the enactment of this Law.

The introduction of a single Register of subjects of the national innovation system, managed by the Fund, enables all subjects of the national innovation system to enroll in it. In this way, it is easier for them to identify themselves without additional procedures before state bodies and other entities, but primarily before investors.

The purpose of keeping the register is to keep numerical records of the subjects of the national innovation system, as well as to facilitate access to the financing of innovation activities, economic incentives and stimulative procedures.

The Law also eliminated shortcomings of the previously valid law regarding the provisions that regulated intellectual property rights over the results of innovation and development projects. These provisions were deficient because they were not in line with the legal framework of Serbia, which regulates the protection and use of intellectual property rights. By this novelty, the importance of managing intellectual property created within a scientific research organization is emphasized.

The main goal of the Law is to create a favorable environment for the development of innovation in the Republic of Serbia. Last year was the best year for domestic startups. In 2021, Serbian startups attracted more than EUR 123 million in investments. Having that in mind, as well as new legislative solutions, we can expect additional accelerated development of the domestic startup ecosystem this year.

For more information about this topic contact:
Goran M. Ćiraković, attorney-at-law

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