Company Formation in Serbia | Guide

1. Introduction to Setting Up a Company in Serbia

Starting a business in Serbia offers numerous advantages, such as a strategic geographic location, a skilled workforce, and favorable tax policies. Whether you are a domestic entrepreneur or a foreign investor, this guide will walk you through the essential steps for company formation in Serbia. We will cover the types of companies you can establish, the registration process, and the specific legal requirements you must meet to operate successfully. Moreover, you will learn about the benefits of foreign investment and the role of the Serbian Business Registers Agency (SBRA) in business registration in Serbia.

2. Legal Forms of Companies in Serbia

When setting up a business in Serbia, you must first choose the appropriate legal structure. There are several options to consider:

• General Partnership (o.d.):
  A General Partnership involves two or more partners who share unlimited joint and several liabilities for all company obligations. Each partner can contribute in cash, kind, or services. Additionally, the partners must create a partnership agreement, which outlines their roles, responsibilities, and profit-sharing. This agreement helps avoid future disputes.
• Limited Partnership (k.d.):
  A Limited Partnership consists of both general partners, who have unlimited liability, and limited partners, whose liability is limited to their investment. While general partners manage the company, limited partners do not participate in management but provide financial or asset-based contributions. This structure is ideal if you want to involve silent partners who provide capital without daily operational involvement.
• Limited Liability Company (d.o.o.):
  A Limited Liability Company (LLC) is the most common type of company in Serbia, particularly suitable for small to medium-sized businesses. An LLC can have one or more members, and each member’s liability is limited to their contribution. Furthermore, the minimum capital requirement is minimal (100 RSD). Members can freely regulate their internal relations and governance through the founding act, providing flexibility and control.
• Joint-Stock Company (a.d.):
  A Joint-Stock Company works well for larger businesses and those seeking to raise capital through the sale of shares. It requires a minimum share capital of 3,000,000 RSD. You can transfer shares freely unless the company’s articles of association impose restrictions. Additionally, joint-stock companies must adhere to stricter reporting and governance standards, making them suitable for publicly traded entities.
• Branch Office:
  A Branch Office allows a foreign company to operate in Serbia without forming a new legal entity. It acts on behalf of the parent company, following the same rules and regulations applicable to the main business. Therefore, it is an excellent option for foreign companies looking to establish a presence in Serbia.

3. Establishing a Company by a Foreign Investor

Foreign investors enjoy the same rights and responsibilities as domestic investors in Serbia. Here’s how you can set up a company:

• Rights and Obligations of Foreign Investors:
  Serbia treats foreign investors equally to domestic businesses. You will have access to legal protections, investment incentives, and the ability to transfer profits freely and repatriate capital. In addition, Serbia has signed several bilateral investment treaties that offer further protection for foreign investments.
• Procedure for Establishing a Company by Foreigners:
  Foreign investors need to complete the registration process with the Serbian Business Registers Agency (SBRA). This process involves preparing the required documentation (such as a founding act, identification documents, and proof of capital contribution), notarizing signatures, and submitting an electronic registration via the SBRA’s portal. Once you submit the documents, the SBRA will issue a registration certificate that confirms the legal status of your business in Serbia.

4. Registration Process and Requirements

The business registration process in Serbia is straightforward, thanks to the One-Stop Shop Business Registration System. Here is a step-by-step breakdown:

4.1 Preparing the Founding Act and Memorandum of Association

Every company needs a founding act (decision or agreement) that outlines the company’s structure, management, and operational details. All founding members must sign and notarize this document. Moreover, including all necessary details will help you avoid delays during the registration process.

4.2 Completing the Electronic Registration (eRegistration)

You must conduct the registration electronically through the SBRA. To do this, you will need a qualified electronic signature, an installed electronic card reader, and a valid payment card (Visa, MasterCard, or Dina) to pay the registration fees. Therefore, ensure you have all the digital tools and documents ready beforehand.

4.3 Utilizing the One-Stop Shop Business Registration System

The One-Stop Shop Business Registration System allows you to obtain a registration certificate, corporate identification number, taxpayer identification number (TIN), VAT registration, and social security registration simultaneously. As a result, this system simplifies the entire process, saving you time and effort in setting up your business.

5. Responsibilities and Liabilities of Company Members

• Responsibilities of Partners and Shareholders:
  Company members (partners or shareholders) bear responsibility for the company’s obligations based on their respective legal structures. For example, in a General Partnership, all partners have unlimited liability, while in an LLC or Joint-Stock Company, members’ liability is limited to their contribution. Consequently, you should carefully understand your level of liability when choosing a legal structure.
• Managing Company Assets and Equity:
  A company’s assets include all property, rights, and other valuables it owns. Equity represents the net difference between total assets and liabilities. Contributions can be in money or kind, and specific rules apply to each type of company. Therefore, carefully consider the form and value of your contributions when establishing your business.

6. Special Permits and Additional Requirements

Depending on your business’s nature, you may need to obtain special permits or approvals from relevant authorities.

• Industry-Specific Permits:
  Certain industries, such as finance, healthcare, and energy, require special permits. You should check if your business falls under these categories and follow the appropriate procedures to secure any necessary permits. Additionally, you may need to comply with specific local and national regulations to operate legally.
• Compliance with Local Regulations:
  All businesses must comply with local regulations, including labor laws, health and safety standards, and environmental protection rules. Regular audits and reporting may be necessary to ensure ongoing compliance. Furthermore, staying updated with regulatory changes is crucial to avoid penalties.

7. Useful Contacts and Resources

• Key Contacts:
  • Serbian Business Registers Agency (SBRA): Manages all business registration processes.
  • Ministry of Economy of Serbia: Provides information on investment opportunities and business regulations.
  • Local Chambers of Commerce: Offers support and networking opportunities for new businesses.
• Helpful Online Resources:
  • Serbian Business Registers Agency (SBRA): Access e-registration and company-related services.
  • e-Government Portal: Find various governmental services and business documentation.

8. Conclusion: Next Steps for Your Business in Serbia

Starting a business in Serbia can become a rewarding venture if you follow the necessary legal steps and procedures. Make sure to choose the right company structure, complete the registration process, and ensure compliance with local laws. Additionally, seeking professional legal advice can help you navigate any complexities and maximize your business potential in Serbia.