Business Opportunities in Serbia
For the fourth consecutive year, Serbia takes the top spot globally for the nation with the most FDI jobs per million people. Due to its geographical location and significant public policy measures toward international investment, Serbia enjoys a competitive edge. It presents an appealing profit potential for EU and Asian businesses.
The service industry, manufacturing industry, and agriculture industry make up Serbia’s main economic sectors. The four largest industries in Serbia—agriculture, industrial, mining, and construction—were born out of these sectors.
This page will give you a better insight into the company registration process in Serbia and how to start a business in Serbia.
Benefits of Starting a Business in Serbia
Nonalignment measures have been practiced for a very long time in Serbia and Yugoslavia, their precursor state. Serbia has been able to preserve and safeguard its national identity while acting in the best interests of its citizens., thanks to its moderation. Serbia, a small landlocked nation in the Balkans, has focused on preserving cordial ties with the EU, China, Russia, and the USA despite its small size.
The pros of setting up a business in Serbia are plenty; here are a few:
- Serbia is willing to work with many different nations and trading blocs. As it calmly creates secure working connections, it can endure pressure from several directions. The EU is Serbia’s principal trade partner, along with nations like China, Russia, the USA, and others. Companies can benefit from these trading relationships in terms of investments and the flow of goods and services.
- The second benefit is Serbia’s affordable establishment and maintenance costs for businesses. You can keep a corporation with Serbian registration for as low as 2,400 EUR a year. This includes the country-mandated rent for the company’s headquarters address and accounting services.
- Serbia offers two opportunities to attract foreign businesses. The first is the potential for a foreign corporation to establish a branch in Serbia. As a result, the branch can open an account with a local European bank. You know all the challenges to overcome if your firm is incorporated in an offshore country. You can now give your offshore firm legal existence and substance in Europe by opening a branch in Serbia.
- Serbia’s more than fifty double tax avoidance arrangements with other nations will also be advantageous to foreign businesses operating there. Furthermore, you will have duty-free market access with a combined population of over 1.3 billion prospective consumers, thanks to the numerous free trade agreements that have been established.
- You might take advantage of one more alluring possibility by establishing a business or a branch in Serbia. Gaining legal residency in Serbia is possible through business investments. You will benefit much from this status, which includes making it simple to create bank accounts throughout the nation. For instance, if you are a legitimate resident of Serbia, opening a corporate account shouldn’t take longer than a week.
Requirements for Starting a Business in Serbia
The most crucial paperwork required to establish a business in Serbia is:
A unique registration form for creating an LLC and enrolling into the taxpayers’ register, certified by the authorized representative
Proof of identity
Members of the business have to produce a photocopy of the ID card. If the owner is a legal person, they must present an abstract from the Register where the foreign corporation is registered and a photocopy of their passport.
Memorandum of Association
Owners also have to produce a Memorandum of Association with the authorized signatures of all the owners or members.
Proof of paid fees
Evidence of paid licensing and issuing costs for the LLC and proof of paid registration and issuing fees.
Types of Business Structures in Serbia
You can opt for one of the following business establishments if you want to start a business in Serbia:
Limited Liability Company (D.O.O.)
- An LLC is the most common type of business to do in Serbia.
- A Limited Liability Company has one to 50 shareholders.
- It requires a 500 EUR minimum capital requirement.
- Each shareholder is responsible for the company’s profits and obligations.
- All information about the corporation is stipulated in the document known as the Articles of Incorporation, including the members’ names and addresses, the company’s name, its primary area of business, the total amount of capital, the contributions made by each representative, and an estimated formation cost.
Joint Stock Corporation (A.D.)
- There are two types of joint stock (A.D) in Serbia: open and closed.
- A closed joint stock company has a maximum of 100 shareholders and requires a minimum capital of 10,000 EUR.
- In an open joint stock company, organizations can have more than 100 shareholders with a minimum share capital of 25,000 EUR.
- Company owners have to specify the type in the Articles of Association. It should also list other information, including the names of the representatives and their addresses, the company’s name and purpose, the share capital amount, share information, an estimate of the incorporation costs, and, if applicable, the date the business will cease operations.
General Partnership (O.D.)
- A general partnership (O.D.) legal entity is created in Serbia when two or more people agree to carry on business under the same name.
- The Articles of Association also establish specifics.
- Each member is fully and equally responsible for the obligations and revenues, and their contributions must be equal.
The limited partnership (K.D)
- The limited partnership requires no minimum share capital request.
- This is formed by two or more shareholders. Each member is responsible for liability and contributions.
- In a limited partnership, one or more partners (general partners) are entirely responsible for the business’s profits and losses. In contrast, the remaining partners have limited liability according to their individual contributions (limited partners).
Company Registration Process
Step 1. Choose the type of Serbian business
- The initial step in registering your business or legal person is to select the legal form.
- In addition to being an entrepreneur, there are legitimate types of businesses mentioned above.
Step 2. Choosing a business name
- Every company’s name must include these fundamental components:
- The company name
- Its legal structure
- The location where the head office of the firm is registered
- Companies can register their business names at Business Registers Agency (BRA). Check the availability of the word and then reserve it in advance.
Step 3. Select the code of activity
- Every legal person and corporate entity must select an occupation code. It defines the activity a business will primarily engage in.
- This entails a promise that, when you seek to set up a company in Serbia, you must decide on and list the primary business objective for the organization.
Step 4. Virtual office serving as the company’s Serbian registered address
- Irrespective of where the operations occur, it is feasible to register the company’s primary location and rent a virtual office instead of renting physical office space.
- It is a new and effective strategy developed for new and small businesses in Serbia.
Step 5. Writing the association’s memorandum
- One or more founders write the Memorandum of Association, which serves as the company’s fundamental legal document.
- The Memorandum of Association must be notarized.
- Must include the following information in the Memorandum of Association.
- Information about the company’s member(s) and shareholder(s)
- The company’s name
- Location of the business in Serbia
- Chosen code of behavior
- Capitalization of all shares
- When the money share is paid out or when the non-money contribution is brought in
- The particular share each participant has
- Authorizations for individuals who speak on the company’s behalf (directors)
Step 6. Creating a bank account
- Before creating a bank account, you should learn about bank tariff compensations for payment services, compensation for monthly account maintenance, and whether a particular bank serves customers via e-banking and similar channels.
- Typically, minimal documentation is required to open a bank account:
- A bank account opening application
- A document with the authorized representatives’ certified signatures (CS form attested at the notary)
- A choice to register a firm (from the Serbian business register)
- A card bearing the bank’s deposited signatures
- The directors’ identity documentation
- Additional paperwork provided by the bank, such as contracts to start accounts in each currency and requests for internet banking
Step 7. Submitting an application to the tax department after registering the business
- Once you have completed the first few procedures, you must file your tax return by the deadline to start as a new taxpayer. The tax return, which serves as a request for income tax, is delivered to the Tax Administration Office.
- Typically, a licensed accountant of an accountancy firm that offers accountancy support will fill out and submit a tax application. A corporation must file its tax request within 15 days of either its incorporation date or when the BRA issues its registration decision.
Step 8. Choosing whether to use the VAT system
- You should consider if it makes sense to register for VAT as soon as your business is established.
- You must forecast the spectrum of business, covering expenditures, to make the best choice.
- Tax-related expenses are those that you must incur as a legal person.
How Much Does it Cost to Incorporate a Company in Serbia?
When you intend to register a business in Serbia, keep the following charges in mind:
- Registering a corporation with the regional Trade Register in Serbia costs roughly RSD 5,000 (about EUR 43).
- The price of online office programs for your Serbian business is about EUR 50.
- A limited liability corporation must have a minimum share capital of RSD 100 (around EUR 1) to be incorporated in Serbia.
- Company formation costs: around EUR 589, a fair quote from our Serbian company formation brokers
- Accounting fees: starting at EUR 30
Are Foreigners on Certain Passes Allowed to Start a Business in Serbia?
To set up a business in Serbia as a foreign investor, one must obtain a business visa.
Permit for short-term residence
The Law on Foreigners governs foreigners’ residence in Serbia. Unless specified by an international treaty, a foreigner who enters Serbia without a visa or other travel authorization may stay there for a maximum of 90 days in any 180 days, starting from the day of initial admission.
A foreign visitor who intends to stay longer than 90 days must apply for a temporary residency permit. Employment, ownership of property in Serbia, training, family gathering, medical care, and other factors can all be the basis for temporary residency.
The Law on Employment of Foreign Citizens regulates foreign citizen employment, self-employment, and other types of labor involvement.
According to the legislation, foreign nationals working for themselves means they are employed by a firm in which they are the only or controlling member.
Foreigners may freely reside, migrate, work, and conduct business in Serbia after fulfilling all of the requirements above.
It’s vital to note that foreign-incorporated businesses can participate in the start-up program’s grant-receiving processes under the same terms and conditions as domestically-incorporated businesses. The grants’ range varies between 35% and 45%. In addition to the start-up program, there are programs for corporate investment and funding for acquiring equipment, machinery, and office furnishings, among other things. Following the finance company’s guidelines that award the cash is crucial when applying for concessions and state aid, which involves creating a solid business plan.
Government Assistance for Foreign-owned Businesses
The following list summarizes the main commercial incentives Serbia offers.
- The Government of Serbia provides financial assistance for Greenfield and Brownfield initiatives in the manufacturing industry and services that may be open to foreign commerce to offset early capital spending and facilitate the start-up of business initiatives.
- If the state owns the land, the government or the local jurisdiction may sell it for a price below market value to support an investment project of national significance or that fosters regional economic growth.
- Investors who have invested more than 8.5 million euros and recruited more than 100 people are eligible for a 10-year Corporate Profit Tax Holiday (1 billion RSD). The tax reduction starts as soon as the business starts turning a profit
- Employers are entitled to a significant reduction in taxes paid on a net wage from the time of employment when hiring individuals who have been enrolled with the National Unemployment Agency for more than six months:
- 1-9 new jobs: 65% fewer jobs
- 10% to 99 new jobs: 70% less
- 100+ new positions: 75% fewer
- Sixty-two functional double taxation arrangements covering income, investment, and property exist in Serbia. Serbia has double taxation agreements with numerous nations in Asia, Africa, and most of the European Union’s member states.
How Multiplier Can Help
Starting a business in Serbia could be difficult. To establish a business in Serbia, you must abide by the country’s tax and labor laws. To expand internationally, you can work with international EOR services like Multiplier.
Multiplier offers EOR services to employ talent without setting up a new subsidiary in the country. You can experiment with international professionals while testing market opportunities for your expanding businesses. It helps to save hiring expenditure and attract talented employees at cheaper costs. You can create employment contracts, manage payroll, and handle multi-country transactions with the aid of Multiplier. Our team of experts helps comply with local laws and business establishment processes.