Opening and establishing company in Serbia in general is not a long-lasting and complicated procedure, however it is important to emphasize that there are precisely defined legal procedures which must be complied by anyone looking to start a business in Serbia has to accomplish. We will explain in detail whole procedure of opening a company in Serbia and answer all your questions related to starting a business in Serbia.
Before opening the firm in Serbia you need to answer few questions and consider several key factors before entering the Serbian market:
- Who can establish a company in Serbia?
- What is the procedure regarding opening a company in Serbia?
- Do I need any special documents when establishing a company in Serbia?
- What is the procedure for foreigners when starting a business in Serbia?
- What type of business may I conduct and which form of business entity shall I establish?
- What are the differences between different forms of business entities?
- How much does it cost to establish a company in Serbia?
- What is the procedure for opening a bank account in Serbia?
- May I have a virtual office in Belgrade, Serbia?
In following lines we will answer those questions and you will be ready to start your business in Serbia.
Who can open a company in Serbia?
Any individual may establish a company in Serbia, regardless of the citizenship or country from which he is coming from (under condition that country in questions is recognized by the Republic of Serbia). Conditions are same for all, and there are no specific limitations nor procedures related to the citizenship of the individual wishing to establish a company in Serbia.
Therefore, an individual aiming to start a business in Serbia may act as a owner of the company, legal representative i.e. director or shareholder of the company.
How to establish a company in Serbia
Procedure for opening a company in Serbia is prescribed by certain legislation consisting of strict rules, however, with adequate legal assistance and expert legal help, such procedure may be conducted for approximate period of ten days.
However, before establishing a business in Serbia, interested individual must make certain business decisions and conduct certain legal steps.
Those legal steps include:
- Selection of legal form in which business is going to be conducted;
- Selection of business name for the company;
- Determine ownership structure;
- Determine a percentage of shareholders, if there are more of them;
- Select address of seat;
- Designate general director, i.e. legal representative of the company;
- Determine predominant business activity;
- Determine amount of share capital;
- Chose a business bank in which company’s bank account is to be open;
- Chose an accountant;
- Enact memorandum of association.
It is important to emphasize that the procedure for company opening may be conducted only electronically. Therefore, prior establishing a company electronic certificate should be obtained. The procedure for obtaining electronic certificate lasts up to 3 to 4 days and individual requesting electronic certificate must be present for personal pickup.
Company structures in Serbia
Opening a company in Serbia may be conducted quite smooth and easily but it is important to choose the adequate legal form for your business.
Serbian legislation prescribes few legal forms of entities and based on your business plans and needs you shall choose the right form for establishing a business in Serbia. The legal forms between which you may choose include:
- LLC – limited liability company
- Joint – stock company
- Partnership
- Limited partnership
- Entrepreneur
- Branch
- Representative office
LLC – limited liability company
A limited liability company – is a company in which one or more members of the company have shares in the basic capital of the company, with the fact that the members of the company are not responsible for the obligations of the company except in exceptional cases. In addition to entrepreneurs, this is also the most popular form of company business, and its biggest benefit is precisely the exclusion of any liability of the members or founders for the company’s business. Therefore, this legal form allows people to more easily enter into business ventures where there is an increased business risk, considering that even in case of bankruptcy of the company, the personal property of the founder remains protected.
Joint stock company
Joint-stock company – is a company whose basic capital is divided into shares owned by one or more shareholders who are not responsible for the company’s obligations. A similar business model as a limited liability company in that in this case the founders acquire shares instead of shares, which can be of different types or classes. Shares can also be quoted on the stock exchange, so in this regard we distinguish between closed and open joint stock companies. It is precisely this possibility of listing shares on the stock exchange that leads to the fact that with joint-stock companies, there is a primacy that the business is fully compliant with domestic regulations, and on the other hand, it gives the possibility of collecting financing on the capital market.
In addition to these business models, it is important for foreign investors that they can also establish branches of foreign legal entities or representative offices.
Individual Entrepreneur
Individual entrepreneur – better known as an entrepreneurial shop, agency, studio, etc. represents the simplest form of business. An essential entrepreneur is a natural person who is registered for the performance of economic activity. Considering that, this business system is suitable for beginners or for those who are engaged in simpler activities in which the business risk is lower (cafes, restaurants, hairdressers, beauty salons, etc.). Also, this form of business is recommended for individual foreigners who come to Serbia to secure a temporary stay and continue their business, as the simplest option until they become familiar with the business environment and expand their business.
What is the basic characteristic of doing business through the form of an entrepreneur is that the natural person or the founder is fully responsible with all of his assets for the obligations he takes on by doing business as an entrepreneur, which is why this activity is not recommended for high-risk jobs, i.e. jobs where already elaborated and have reached a certain level of business development.
On the other hand, for this risk, the entrepreneur is rewarded on the one hand, considering that, in the case of keeping books, the profit tax is 10%, unlike the profit tax of a legal entity, which is 15%.
Limited partnership
Limited partnership – is a company that has at least two members, of which at least one is liable for the obligations of the company in unlimited joint and several liability (general partner), and at least one is liable limited to the amount of his unpaid, i.e. non-entered stake (limited partner). The specificity of this business model, which rarely occurs in practice, is that the general manager essentially has the role of investor and control over the company’s operations, while the general partner is someone who takes risks, makes business decisions and develops the company’s operations.
Branch of foreign Company
A branch is a separate organizational part of a company on the territory of the Republic of Serbia, through which the company carries out its activities in accordance with the law.
Given that it represents only a separate organizational part of its founder, the branch does not have the status of a legal entity, and in legal transactions it acts in the name and on behalf of the founder, who is unlimitedly liable for obligations to third parties that arise in the business of his branch.
Representative office of a foreign Company
The representative office of a foreign company is its separate organizational part that can perform preliminary and preparatory actions in order to conclude the legal business of that company. Therefore, it, like the branch, does not have the status of a legal entity, but it also has limited business capacity. Namely, the representative office can only conclude legal affairs in connection with its current business, but not perform activities on behalf of the founder.
Benefits and differences between a limited liability company and a representative office
As the most common way of doing business in Serbia is in the form of an entrepreneur or limited liability company, the so-called companies, here we point out some of the most important differences that you should keep in mind when making a decision in which legal form you will do business.
Therefore, the basic characteristics of an entrepreneur are:
- Simplicity of business and establishment
- A flat-rate model of taxation is available for certain activities
- Responsibility for the operation of the entire property
- The possibility of pausing in the performance of activities
- Lower tax burden
- Smaller threatened amounts of prescribed fines for misdemeanors and economic crimes compared to companies
- Suitable for less risky activities
- The impossibility of co-founders
On the other hand, what is specific for doing business through a company or limited liability company:
- Absence of responsibility for the company’s operations
- The possibility of having multiple founders
- Greater creditworthiness with banks
- The possibility of transferring shares and selling the company
- The possibility of establishing an employee reward system through the allocation of shares in the company (ESOP)
- Higher tax burden
- More legal obligations regarding the adoption and compliance of certain regulations and other legal acts
- More rigorous penalties in the case of misdemeanors and economic offenses
Procedure of registering and opening a company in Serbia
Before submission of the application form to the Serbian Business Registers Agency, as we stated you need to make certain decisions as:
1. How to choose a business name?
Prior to submitting application form to the Serbian Business Registers Agency it is important to choose a business name. Afterwards we make a check whether the chosen business name is available or taken, in which case we will notify you to make some modifications to the chosen business name.
2. How to choose a code of activity?
One of the steps that needs to be done prior opening a company in Serbia is choosing a code of activity which is going to be determined by your predominant business activity. We can assist you in choosing the right code of activity based on information provided regarding the business you are planning to establish in Serbia.
3. How to choose a bank and open account?
After opening a company in Serbia it is necessary to open a bank account. Our team can provide you with assistance in opening a bank account and ease this process as much as possible. However, for the sake of ease we encourage our clients to think about potential bank in which they would like to open a bank account before application form is submitted, i.e. before opening a company in Serbia.
4. How to obtain electronic certificate?
We provide full legal assistance clients who are opening a company in Serbia, including assistance in obtaining electronic certificate. It is important only to bear in mind that you must be present in person in order to pickup the certificate once it is over. However, we will proceed with all previous actions making it smooth, easily and time-efficient for you to obtain electronic certificate.
Documents Required for starting a business in Serbia
Establishing a company in Serbia is relatively simple process, under condition that you have all required documents.
This is a basic documentation you need in order to establish a firm in Serbia.
Founding Agreement
Since you have made the decision in which legal form you want to start your business, you need to prepare all the necessary documentation.
In the case of a company or limited liability company, you need to prepare Founding Agreement.
The Founding Agreement is the basic act by which you lay the foundations of the way you will function. The founding act itself defines the amount and type of share capital, payment deadlines, share percentages, powers and limitations in the work of directors, powers of the assembly and regulates many other issues that are important for the functioning and protection of your business. What the law stipulates as mandatory content:
- data on company members;
- business name and headquarters of the company;
- the predominant activity of the company;
- the total amount of the basic capital of the company;
- the amount of the monetary contribution, that is, the monetary value and description of the non-monetary contribution of each member of the company;
- the time of payment, that is, of the entry of contributions into the basic capital of the company;
- the share of each member of the company in the total share capital expressed as a percentage;
- determination of the company’s bodies and their competences.
Decision on the appointment of directors
Although the director can be appointed by the founding act itself, our recommendation is to do so in a separate decision made by the company’s assembly. With the decision, you determine how many directors you will appoint, the way in which they will represent the company (independently or jointly), the duration of the mandate, the organization of the representation as well as other necessary details related to its work.
Certificates of payment of fees
It is also necessary to pay the fee and submit a confirmation of the payment made. The certificate in question does not have to contain the bank’s seal or the signature of an authorized person. Fee amounts change frequently, so you should check the amounts on the following link.
Also, for certain activities, you need to submit additional documentation, such as certificates from competent authorities on the fulfillment of the conditions for performing the activity in question (banks, pharmacies, insurance companies, etc.), so this is one of the reasons that you should carry out the registration procedure in cooperation with a lawyer.
Proof of Identity
Regarding the proof of identity, i.e. identification documents that need to be attached, for a domestic natural person it is a scanned ID card and for a foreigner, a copy of the passport. On the other hand, for a legal entity, it is an extract from the competent commercial register. In the case of a foreign legal entity, depending on the country of origin, it will be necessary for the extract in question to be legalized and translated into Serbian by an authorized translator.
The data that needs to be registered are:
1) for a domestic natural person – personal name, gender and unique citizen ID number;
2) for a foreigner – personal name, gender, passport number and country of issue, ie registration number for a foreigner, i.e. number of the foreigner’s identity card and country of issue;
3) for a domestic legal entity – business name, seat address and registration number;
4) for a foreign legal entity – business name, registered office address, number under which that legal entity is registered in the registry and the country in which that entity is registered.
Registered Address
Registered address is a address of the seat of your company. It is mandatory to register your seat address, as well as your e-mail address. Our law firm offers a services of virtual office for clients not having their premises yet in Belgrade, Serbia.
Tax ID Numbers (TIN)
Upon opening a company in Serbia and successful registration you will be assigned a tax identification number, i.e. TIN. TIN is a unique identification number used in legal transactions.
Application Form
Application form is a form which is submitted to Serbian Business Registers Agency in order to register a company in Serbia. With professional legal assistance you will be sure that your application form is completed fully and in accordance with legal requirements.
How much does it cost to open a company in Serbia
An additional aspect to consider is the cost of opening a company.
The registration fee for establishing a limited liability company (LLC), a branch of a foreign company, or a representative office of a foreign company, including the registration of documents in accordance with the law, amounts to 6,500 RSD. On the other hand, if the application for establishment is submitted electronically, the fee will be 5,900 RSD. If you wish to register a branch of a domestic company, the fee is 3,100 RSD per branch.
The registration fee for establishing a sole proprietor is 1,600 RSD, with a reduced fee of 1,500 RSD if the application is submitted electronically.
In the case of establishing an LLC, an additional cost is the minimum share capital, which is 100 RSD. However, the share capital does not need to be deposited immediately upon establishing the LLC but must be recorded in the founding act. The act must specify the deadline for depositing the share capital. It is important to note that the deadline for the deposit cannot exceed five years from the date of the founding act.
FAQ
Is Serbia a good place to start a business?
Serbia can certainly be a good location to start your business, depending on your business plans and actions.
What is the most popular form of business in Serbia?
The most popular form of business in Serbia definitely is limited liability company and entrepreneurship.
Is Serbia high income?
According to the classification of the World Bank, Serbia is classified as an upper – middle income country.
Conclusion
Opening and establishing company in Serbia is not time-consuming process, as explained in this text. However, there are some specific decisions that need to be made prior opening firm in Serbia. Starting a business in Serbia may be a perfect match for your business growth and expansion of your business activities.
However, it is of utmost importance that you have full legal assistance throughout the whole process, which will save your time and minimize your costs. As written above, before establishing a firm in Serbia, it is necessary to have already some information, i.e. made decisions related to the ownership structure, name of the company, legal representatives, seat address and similar.
In case you find Serbia as good location to start a business, our experienced team can provide you with full legal assistance and make the procedure of opening a firm in Serbia smoothly and easily for you.
This one the article is exclusive informative nature and does not represent legal advice . If are To you needed additional related information about establishing your business in Belgrade and Serbia, please free to us you contact via email office@ncrlawyers.com or via phone number +381677049551.
