The Official Gazette of the Republic of Serbia, No. 13/2026, published the Regulation Amending and Supplementing the Regulation on the Conditions, Procedure for Awarding and Using Incentive Funds Aimed at Improving the Quality of Hotel Accommodation Services (Regulation). The amendments substantially refine the eligibility criteria for granting incentives—particularly regarding franchise arrangements with international hotel chains—and strengthen the mechanisms for monitoring and controlling the implementation of investment projects.
Key amendments:
- Clarified scope of eligible beneficiaries and investment projects – the right to incentives may be exercised by a market participant implementing an investment project through the incorporation of a new legal entity or branch, or through the expansion of the capacity of an existing legal entity, in each case for a new hospitality facility.
- New and stricter conditions for granting incentives – Article 4 introduces detailed eligibility requirements, with a central requirement that the beneficiary must have a franchise agreement with an international hotel chain. The Regulation defines a franchise agreement as an agreement concluded for a term of not less than ten years between the beneficiary and an international hotel chain, granting the right to use a trademark and brand for a hotel of at least four-star (4)* category, together with access to standardized operational procedures and digital systems (PMS, reservation systems, CRM), as well as associated business and marketing tools. The Regulation further introduces quantitative criteria defining an “international hotel chain”, thereby narrowing the range of brands that may qualify.
- Financial discipline and security – the beneficiary must provide at least 25% of eligible costs from its own funds or commercial financing without public support and must furnish an appropriate security instrument (a promissory note, or a promissory note guaranteed by a bank). The monitoring period is five years, or three years for small and medium-sized enterprises.
- Eligible costs and eligible periods – eligible costs are linked to obligations under the franchise agreement and may be one-off (pre-opening costs) and/or multi-year (incurred up to seven years from opening), provided that assets acquired using incentive funds are new.
- Amount and disbursement – incentives are awarded as non-repayable grants (50%, 60% or 70%, depending on the size of the legal entity), subject to a maximum amount of EUR 5 million. Payment is made in a single instalment, in the dinar equivalent calculated at the NBS middle exchange rate applicable on the date of execution of the agreement.
- Deadlines and quality standard – the beneficiary must obtain a hotel categorization decision within two years from the date of disbursement, and the category may not be lower than 4*. The hotel must operate in that category for at least ten years from opening.
- Oversight and sanctions – the Regulation introduces earlier and continuous external audit oversight (from the pre-opening phase, and annually during project implementation and the monitoring period). Irregularities may result in termination of the agreement and an obligation to repay the funds with statutory default interest.
- Procedural tightening – the application for incentives must be submitted before the commencement of works on the project, in line with the rules on regional state aid.
- Removal of the reduced-award option – the prior possibility to award a reduced amount to applicants at the bottom of the ranking list in the event of insufficient budget (subject to their consent) has been removed.
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