How can a foreigner start a business in Serbia?

Company formation in Serbia is not limited to residents. Non-residents, private or legal entities, can also register a company in our country. An additional relief is that a foreign person or company representative does not have to be physically present in order to complete the company registration process. This can be done for them by authorized domestic advisory agencies.

Establishing a company in Serbia is a relatively fast process, because the business register makes a decision within 5 working days from the submission of the request for registration. However, in order for the registration to be successfully completed, it is necessary to take proper steps before submitting the application.

Below we bring you a detailed guide on company formation in Serbia, so you know what necessary steps you need to take during this procedure.

The process of company registration is done in the Business Register. The amount of the costs for company registration will depend on the type of legal entity that is registered:

- 5,900 dinars (50.26 €) for a limited liability company

- 1,500 dinars (€ 12.78) for an entrepreneur

- 5,900 dinars (€ 50.26) for a branch of foreign companies

Also, there are other costs that need to be covered before submitting the application - it is necessary to notarize the act of incorporation of the company, which amounts to 30 to 50 €. In the case when the shareholder of the future Serbian company is a foreign company, then it is necessary for the excerpt from the business register of the foreign company to be translated by a certified translator in Serbia, which costs from 50 to 100 €.

The price of the consultant's help during the establishment of the company depends on the legal form of the company in Serbia, but also on the data on who is the shareholder of the company (and from which country it comes).

Before a foreign person registers a company in Serbia, there are other business decisions that he must make, which determine the course of future business. These are the main activities of the company, the place of registration of the company's headquarters, payment of VAT, number of employees, selection of an accounting agency, etc.

According to the Law on Business Organizations of the Republic of Serbia, there are several types of organization of legal entities (legal forms of business entities). Those are:

- Entrepreneur

- A limited liability company

- Partner company

- Limited partnership

- Stock company

Additional legal forms are as follows:

- Branch of a domestic legal entity

- Branch of a foreign legal entity

- Representation of a foreign legal entity

The most popular legal forms of a company are a limited liability company (LLC), an entrepreneur and a branch of a foreign legal entity in Serbia.

The business name must contain the name of the company, its legal form and the place where the registered office of the company is registered. In addition, the business name must contain other elements in accordance with the Law.

When choosing a business name for your company, it is important to follow the guidelines, all legal rules and limits. It is recommended that you check that the company name is available before submitting the setup application and, if so, that you reserve a name in advance.

All legal entities and economic entities are obliged to choose their activity code (predominant activity of the company). These are businesses that the firm will mostly perform to make a profit. In addition to the predominant, there are additional activities that the company can perform. If the additional activity becomes dominant, then it must change to the basic activity. For limited liability companies, this means a change in the founding act.

Instead of renting office space, it is possible to rent a virtual office and register the company's headquarters, regardless of the place where the activity is performed. This very efficient model for smaller and new companies starting business in Serbia.

A virtual office is a modern and very efficient business concept, which can save a significant amount of money when it comes to rent and additional costs of office space.

Virtual offices are rented not only for the registration of the company's address, but also for receiving mail, providing administrative support to companies, telephone lines and more.

Formation of a limited liability company (the most common form of legal entity) in Serbia starts with the issuance of the founding act. A founding act is a general legal act of a company issued by one or more founders of the company. The memorandum of association must be notarized.

The memorandum of association must contain the following information:

- Data on members / shareholders of the company

- Company name

- Company address in Serbia

- Selected activity code

- Total amount of share capital

- Time of payment of a cash share or issuance of a non-cash share

- Individual share of each member

- Authorizations for persons representing the company (directors)

The most important documentation necessary for setting up a company in Serbia:

- Unified registration application for the establishment of a limited liability company and entry in the register of taxpayers signed by an authorized representative

- Proof of identity of members of the company - photocopy of passport for a foreign citizen; if the founder is a legal entity, he submits an excerpt from the Register in which the foreign company is registered

- Founding act with certified signatures of all founders or members

- Proof of paid fee for registration of LLC and proof of paid fee for registration and issuance

The application for founding a company can be submitted by the founder, authorized person or proxy.

After the establishment of the company, it is necessary to do the following:

To open a bank account, it is usually necessary to submit basic documentation:

- Application for opening a bank account

- Form with certified signatures of persons authorized to represent (CS form certified by a notary public

- Decision on company registration (from the Business Register of Serbia)

- Card with deposited bank signatures

- Proof of identity of the director

- Additional bank documentation such as an account opening agreement in each currency, online banking requirements…

Once you have completed the initial steps, you need to file a tax return within the legal deadline to become a new taxpayer. The tax application is submitted to the Tax Administration and represents an income tax return.

The legal deadline for submitting a tax return is 15 days from the establishment of the company or from the date of issuance of the Decision on registration by APR.

A digital signature (qualified electronic signature) is required to sign, submit and certify documents electronically. Also, the electronic certificate is used to submit the company's annual financial and tax reports.

To obtain a digital signature, you need to apply for issuance in the relevant institution in Serbia (there are 5 of them that issue this type of certificate). After submitting the application, an electronic certificate will usually be created within 15 working days. The certificate is issued for the director of the company and only the director can personally take it over in the relevant institution.

Ask yourself if it pays to enter the VAT system immediately after establishing a company. To make the right decision, you need to anticipate the scope of the business, including costs. Those you are required to pay as a legal entity relate to tax expenses.

If you make a profit of more than 8 million dinars a year, you are obliged to pay value added tax (VAT)

Finally, when you have completed all the above steps, select an external collaborator. A good, professional and reliable accounting firm will recognize your needs and know how to meet them. When doing business in a foreign country, the most important thing is to have a partner who is well acquainted with the business models in the territory of your business, so that he can provide you with adequate assistance in all aspects of business.