Serbia is a jurisdiction with a developed economy, infrastructure and a favorable environment for investment. Among other things, this applies to taxation. Legal entities in the country will allow for the efficient structuring of business activities. Company registration in Serbia will also not be associated with significant transaction costs for the registration and maintenance of the legal entity. A visa-free regime with the EU allows the country to attract foreign investors easily, but also this state has other advantages.
Advantages of jurisdiction
Company registration in Serbia opens up the following advantages for business:
- advantageous location in the European region;
- developed economy and banking sector;
- low costs of opening and administering a Serbian legal entity;
- easy procedure for foreign investors to obtain a residence permit;
- low prices of hiring local labor force;
- one of the lowest corporate taxes in the European region, and the VAT number is issued immediately after incorporation of the legal entity.
The primary forms of legal presence and business
If you intend to start a business in Serbia, it is possible to implement the business task in one of several options:
- Limited Liability Company (DOO) is the most common Serbian legal entity among local entrepreneurs and non-residents. The liability of founders and participants of this type is limited to the amount of investment made in the company (the share each owns). Incorporating this type of Serbian legal entity requires a share capital of about 1 euro minimum (100 Serbian dinars), and it is allowed to contribute in cash and non-monetary equivalent. This type of Serbian legal entity can be established even by one participant. It is possible to transfer the share to a third party only after an acquisition offer has been sent to the other company participants.
- Joint Stock Company (AD) is a Serbian legal entity that issues shares and can offer them to shareholders and third parties. As a rule, shares can be freely alienated, including third parties. For the incorporation, a share capital of approximately 25,000 euros (3,000,000 Serbian dinars) is required. A JSC may issue several classes of shares. Stricter reporting and auditing rules apply to JSCs. The instrument is suitable for attracting external financing.
- A branch is an option of registering a branch of a company in Serbia for a foreign legal entity that intends to conduct the same activities in Serbia as abroad. This is a simple option for foreign legal entities who intend to test the local markets before investing significant amounts of money in the country.
It is possible to open a company in Serbia after passing several stages of incorporation:
- Determination of the types of business activities for future work.
- Selection of the business name for the Serbian company. Reservation of the chosen name (optional).
- Gathering information about the founders and beneficiaries of the legal entity.
- Search and execution of legal relations with the management of the future legal entity.
- Registration of the official location of the legal entity.
- Drawing up founding documents for the Serbian legal entity.
- Opening a transit bank account for the investment of share capital before incorporation.
- Forming the package of documents and submitting it to the registrar. A specific package of documents is included based on the background of the business case.
The company’s founders will be required to provide copies of their passports (if they are private applicants) or an extract/certificate of registration when setting up a business on behalf of a legal entity. Also, a power of attorney should be issued to the person authorized to sign documents and perform registration procedures. All documents submitted to the registrar need to be translated into Serbian (an authorized officer of the court or certification office will be required), notarized and apostilled. The application is to be filled out in two copies. It must contain the full name of the organization (in the case of a sole proprietorship – the name of the applicant), address, and legal form.
The standard registration package for a legal entity should include the following:
- application for registration in the prescribed form (indicating the address of the legal entity, legal document and other data);
- copies of the passports of individuals who are the founders of the legal entity or extracts from the register of legal entities in the country of registration if the founders are legal entities;
- articles of association and/or memorandum of association;
- the decision on the establishment of the legal entity, as well as on the appointment of its management;
- certificate from the bank on the placement of funds on account of the payment of the share capital;
- power of attorney for the representative.
- Payment of registration fees.
- Registration for social insurance purposes.
- Opening a bank account.
- Obtaining additional permits and licenses required for certain regulated activities.
If you plan to open a company in Serbia, you should take the registration documents seriously. Any deficiencies in the paperwork may result in a refusal to register a legal entity. Prifinance lawyers are ready to help with the collection and proper execution of all documents for incorporation of a company and to accompany the procedure at all stages.
Legislation and regulatory environment
Serbia offers equal opportunities for all interested persons to start and run a business. Foreign citizens and legal entities can start a business, and it is allowed to act by proxy. The registration process is not burdened with significant formalities and does not require considerable material costs for registering a company. Companies must maintain accounting and submit regular reports, so accounting support is worth taking care of. Non-residents receiving income in the country pay taxes to the Serbian treasury.
Serbia’s tax system
If you intend to open a company in Serbia, evaluate the options with the following aspects of taxation in the jurisdiction in mind:
- Corporate tax – 15%
- Income tax -20%
- VAT – 20%
- Withholding tax (for non-residents) – (1) dividends – 20%, (2) interest – 20%, (3) royalties – 20%
- Capital Gains Tax – (1) Corporate – 15% (2) Individual – 15%
To open a business in Serbia: how the lawyers of Prifinance can help
If you intend to start the process of registering a company in Serbia, the lawyers of Prifinance are ready to accompany the process, including:
- evaluate the background of the business case;
- select the most favorable option for opening a company in Serbia;
- collect information and documents for incorporation of a legal entity;
- negotiate with representatives of local authorities;
- open bank accounts;
- accompany the activity of the Serbian legal entity till the moment of termination of the activity. Provide an introduction to your business case for detailed advice and suggestions.