Starting a business in Serbia can be a promising move for both local and foreign entrepreneurs due to the country’s strategic location, competitive tax regime, and growing market. However, understanding the legal framework for company registration is essential for ensuring a smooth and compliant entry into the Serbian business environment. This article outlines the key legal aspects of company formation in Serbia, including legal structures, registration steps, necessary documentation, and compliance obligations.
Legal Structures Available in Serbia
The first legal consideration when registering a company in Serbia is selecting the appropriate business structure. The Serbian legal system, primarily based on civil law, recognizes several forms of business entities:
- Limited Liability Company (Društvo sa Ograničenom Odgovornošću – DOO)
The most common structure for small and medium-sized enterprises. It requires a minimum share capital of RSD 100 (less than 1 EUR), and can have one or more shareholders.
- Joint Stock Company (Akcionarsko Društvo – AD)
Suitable for larger enterprises or those planning to raise capital publicly. It requires a minimum capital of RSD 3 million for private companies and RSD 10 million for public ones.
- Entrepreneur (Preduzetnik)
A sole proprietorship ideal for freelancers and micro-businesses. It is registered under the name of an individual and bears unlimited liability.
- General Partnership (Ortačko Društvo – OD) and Limited Partnership (Komanditno Društvo – KD)
Less commonly used, these are based on agreements between two or more individuals with shared or divided liability.
- Branch Office or Representative Office
Foreign companies may open branches or representative offices in Serbia. These do not constitute separate legal entities but must still comply with local laws.
Legal Requirements and Registration Process
The company registration process in Serbia is governed by the Law on Business Entities and is administered by the Serbian Business Registers Agency (SBRA). The entire process has been streamlined in recent years and can be completed in a few working days.
Step 1: Preparing Company Documentation
Key documents required include:
- Founding Act or Articles of Association
- Decision on Appointment of Director
- Proof of identity for shareholders and directors
- Consent for use of company name
- Proof of registered office address (lease or ownership agreement)
For foreign shareholders, notarized and translated copies of passports or business registration certificates from their home country are also required.
Step 2: Name Reservation
Before filing for registration, the company name must be checked and reserved through the SBRA. The name must be unique and not misleading or similar to existing entities.
Step 3: Registration with SBRA
The completed application, along with supporting documentation, is submitted to the SBRA in person or electronically via the SBRA’s ePortal. A registration fee must be paid (around RSD 4,900 for a DOO).
Upon approval, the SBRA issues a registration decision, assigns a company registration number (Matični broj), and enters the company into the public register.
Step 4: Tax and Social Security Registration
After SBRA registration, the company must register with the Tax Administration for:
- Corporate income tax (CIT)
- Value-added tax (VAT), if applicable
- Payroll taxes for employees
- Social security contributions
The company also receives a tax identification number (PIB).
Step 5: Opening a Bank Account
A corporate bank account must be opened in Serbia. Banks will require the company registration certificate, PIB, and identification documents of the legal representative.
Legal Compliance and Obligations
Once registered, a Serbian company must adhere to various legal obligations, including:
- Annual Reporting: Companies must file annual financial statements with the SBRA. Audits are required for medium and large entities.
- Tax Compliance: Corporate income tax is charged at 15%. VAT is 20%, with reduced rates for specific goods/services.
- Employment Law: Employment contracts must comply with the Labour Law. Employers must register employees for health, pension, and unemployment insurance.
- Corporate Governance: DOOs and ADs must maintain proper corporate records, hold shareholder meetings, and update the registry for any structural changes.
- Anti-Money Laundering (AML): Companies, especially financial institutions or entities handling large transactions, must comply with AML laws.
Foreign Investment Considerations
Serbia encourages foreign investment with no major restrictions on company ownership. Foreign entities can own 100% of a Serbian company. Moreover, Serbia offers incentives such as tax holidays and subsidies in certain industries or under regional development programs.
However, foreign investors must be aware of double taxation treaties, currency exchange laws, and sector-specific regulations (e.g., real estate, banking, and telecom). Legal counsel is advised to navigate these complexities.
Registering a company in Serbia is a relatively straightforward process from a legal perspective, but it demands attention to regulatory details. With proper legal guidance, choosing the right entity type, submitting correct documentation, and ensuring compliance with ongoing obligations can pave the way for successful business operations. Entrepreneurs—local or foreign—stand to benefit from Serbia’s open market, skilled workforce, and strategic location in Southeast Europe.