Strategies of the Development of Entrepreneurship and SME

were operating in September 2007. The number of 6,500 new enterprises and 22,274new entrepreneurs was registrated in the first half of 2007.• The most of SMEs (69% of total SMEs) participate in following three sectors: wholesaleand retail trade; repair of motor vehicles, motorcycles and personal and householdsgoods – 42%; manufacturing industry – 16.1%; transport, storage, communications –10,9%.• Number of employees says, that out of 2,068,364 employed people in 2005, over 1.1million worked in the SMEs sector, which amounts over 56% of all employees: 477,000in micro SMEs, 265,000 in small-sized SMEs and 368,000 in medium-sized SMEs.• The most of employees (73.2% of total employees in SMEs) belong to the followingsectors: wholesale and retail trade – 34.4%; manufacturing industry – 31.2%;construction – 7.6%.• Share of SME’s turnover in total turnover amounts 65.5%.• Contribution of SMEs in total gross value added amounts 54.1% .• Contribution of SMEs in total profit of Serbian economy amounts 50.4%.• SME sector is the most profitable part of Serbian economy; rate of SMEs profitability is40% (rate of large companies profitability is 32.7%.The analysis of SME’s development level shows that SME sector became the importantpart of implementation structural reforms, specially related to creation of new workplaces andfostering economic growth. Above the average business activity and achieved results of SME’sbusiness had great impact on improvement of efficiency of Serbian economy as a whole. But,the processes of reforms, besides positive trends, didn’t eliminate multiannual cumulatedproblems and negative effects of key restriction (long-term stagnation of investment activityand insufficient level of investments in maintance of producing capacity etc.). Because ofunfinished process of privatization and restructuring of large business systems, cumulatedproblems moved to SME sector (mostly in medium enterprises), which is specialy emphasizedin field of liqudity and rentability of this sector.According to research of World Bank about condition of SMEs’ business activities (2007),Serbia improved its rank significantly. Among 175 anylized countries, Serbia takes place 68(last year 95). Comparing to the countries in the region, Serbia obtained the greatestimprovement of business conditions for last two years. The results of this research encouragesthe further efforts on improvement SME’s business and at the same time is a proof of safetyfor foreign investments.3.4.2. LEGISLATION AND STEPS OF DOING BUSINESSThe separate legislative procedure does not exist for the sector of SME’s, so thesolutions effective for the commercial entities as a whole are applied. The Company Act, TheLaw on Social Enterprises, Law on Entrepreneurship, Law on Accounting andAuditory, Law on Commercial Register, Law on Agency for Commercial Register arethe most important for regulating the legal position of SMEs. These laws precisely define formsof organization, models and procedures of management and administration, authorisations andresponsibilities, foundations, models and conditions and criteria for classification of enterprisesaccording to their size. The activities of the Agency for Commercial Register, started in 2005,enabled faster and more efficient foundation of commercial entities. In order to enable easierusers’ access, the Agency developed a wide net of local offices which act within municipaladministrations and it also initiated the procedure for eliminating the non-active commercialentities from commercial register, providing the unique up-to-date electronic data base on allcommercial entities in Serbia.The Law on Accounting and Auditing comprises the criteria for classification ofcommercial entities on small, medium and large. This law also introduces the obligation ofregistering and auditory. The registering obligation was introduced according to international55