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In the modern business conditions, the creators of the new industrial policy pay increasing importance to the development of free zones as an important instrument of business infrastructure. Free zones offer huge chances for the establishment and development of small and medium-sized enterprises and improving their overall business. Experience has shown that many countries owing to the free zones achieve significant development results in comparison with other countries. The countries that have developed free zones generate: significant inflow of foreign direct investment and new technologies, rising living standards and increasing employment. Those countries that develop free zones have a greater competitive advantage, achieve faster economic development and efficiently engage in inter national flows. The aim of this paper is to, based on a comparative analysis of business zones in the Republic of Serbia and the European Union, indicate that the Republic of Serbia in recent years has improved its position and the investment climate, so that operation of the free zone is a lot easier. Whether the free zones in one country, and in the Republic of Serbia will be successful, depends primarily on the country’s attitude towards the concept of free zones and how that affects their development, as well as the new industrial policy, its objectives and instruments. It is important to emphasize that the role of the state has changed significantly in the development of free zones, which includes as well a brighter and better future in terms of stable operation of the free zones and achieve significant results.

The role and importance of free zones in economic development: The experience of the Republic of Serbia and the European Union