REGISTRATION OF COMPANY IN SERBIA
Serbia is a country in Central and Southeast Europe. It is situated in the southern Pannonian Plain and central Balkans and borders Hungary to the north, Romania to the northeast, Bulgaria to the southeast, North Macedonia to the south, Croatia and Bosnia and Herzegovina to the west, and Montenegro to the southwest; while claiming a border with Albania through the disputed territory of Kosovo. Serbia has a population of roughly 7 million, with Belgrade as its capital and largest city.
Serbia is an upper-middle-income economy, ranked 64th and "very high" in the Human Development Index domain. It is a unitary parliamentary constitutional republic, a member of the UN, CoE, OSCE, PfP, BSEC, CEFTA, and is acceding to the WTO. Since 2014, the country has been negotiating its EU accession, with the aim of joining the European Union by 2025. Serbia has been formally adhering to the policy of military neutrality. The country provides universal health care and free primary and secondary education to its citizens.
Setting up a company in Serbia and its registration in the BRA is the first and most important step if you have decided to start your own business. Before you start the procedure, you have to know the legal form of your company. This means that the procedure depends on whether you want to set up an LLC or you are going to register in the business register as an entrepreneur. HLB T&M Consulting is a specialized agency that offers accounting services and it can help you with setting up a company in Serbia.
Even though setting up a company in our country goes relatively fast, there is no general or quick and simple answer on how to set up a company. Company registration is followed by several procedures and activities which are co-related. In continuance you can read a detailed guide through setting up a company and which activities you have to take during this procedure.
What is necessary to set up a company in Serbia
The procedure for registering an entrepreneur and setting up the LLC in Serbia is not the same, because the documents are different. When it comes to the entrepreneur’s registration in the BRA, the procedure is very simple, because the entrepreneur is a physical person registered to perform activities. Setting up the LLC demands a more complex procedure and asks for more documents. A physical person also differs because the LLC can have one or more members.
When you want to set up your company, the registration starts with signing in the business register and submitting the application on the legal form of the BRA. The deadline for deciding whether the application will be accepted or not is at most 5 working days, starting from the date when the documents were accepted in the Register. If all the conditions are met, the Decision of setting up is issued or Act and Decision that the application is accepted and after that, the same is published on the BRA official website.
The steps before company formation
Before you register your company, there are other business decisions that you have to make and which influence your future business. It is important to decide about your core activity where will you register the company’s main office, will you pay the WAT, the number of employees, how to choose the accountant, and so on.
1. Choosing the company’s name
Every business name of the company must contain basic elements. The business name must contain the name of the company, its legal form, and the place where the main office of the company is registered. Besides that, the business name must contain other elements in accordance with the Law.
2. How to select the code of activity of a company?
All the legal persons and business entities are obliged to choose their activity code (that activity they will mainly do). This implies a commitment that when you apply to set up a company, you have to choose and write down the core activity of the company or the most important activity of the company.
The activity code that you choose is known as the core activity (leading or dominant activity). These are the jobs that a firm will mostly do to gain profit. There are additional activities and those are other jobs done by a legal person.
3. The preparation of the memorandum of association
The setup of the LLC company in Serbia starts with issuing the Memorandum of association. The Memorandum of association is a company’s general legal act created by one or more founders of the company. All the questions related to business, management, questions from the business relation, and other important questions are defined in this legal act. The Memorandum of association must be certified at the notary.
4. Registered address of the firm in Serbia – a virtual office
A virtual office represents a modern and very efficient business concept, which can save a significant amount of money when it comes to the rent and additional expenses for business premises.
Instead of renting the business premises, it is possible to rent the virtual office and register the company’s main office, regardless of the place where the activities are performed. This very efficient model for smaller and new companies which offer services. For them, it is better to rent a virtual office instead of business premises in an exclusive and expensive location.
Types of company
Serbian limited liability company
The Serbian limited liability company (d.o.o.) is widely used for starting a business in Serbia, it is a legal entity where all the shareholders have limited liability, based on their contributions and suitable for small and medium businesses. For a private limited liability company in Serbia, the founders must provide a minimum share capital of RSD 100 and this type of entity cannot be formed by more than 50 shareholders. According to the Company Act in Serbia, all shareholders of a limited liability company are liable for its earnings and debts. The major decisions of the Serbian D.O.O. are taken by the general meeting of the shareholders, while the daily decisions and the strict control on observing the articles of association are handled by a director. The following information is comprised by the Articles of Association, the main documents for company formation in Serbia:
- • complete information about the owners (their names, the nationality, the country of residence);
- • the address of the head office, the main activities;
- • the objectives of the newly-formed company in Serbia, in accordance with the applicable legislation;
- • details about the initial capital contribution which is kept in a temporary bank account.
A joint-stock company
If the Serbian or foreign founders have a higher amount of money to invest in a business, they can incorporate a Serbian joint-stock company (A.D.). There are two types of joint-stock companies in Serbia:
- closed joint-stock companies (where the founders must provide a share capital of at least 10,000 EUR and cannot have more than 100 shareholders),
- open joint-stock company (with a minimum share capital of 25,000 EUR and more than 100 shareholders). Only the stocks of the open joint-stock company can be registered with the Stock Exchange in order to increase the capital. The major decisions are also taken by the general meeting of the shareholders, while the daily ones are taken by a board of directors, controlled by a supervisory board.
Partnership
The Serbian general partnership is formed by two or more individuals or corporate bodies united under a partnership agreement and with a personality not separated from one of the entities. No minimum share capital is necessary to run this business and the capital is usually stipulated in the partnership agreement. All the major decisions are taken by all the members and, in the case of liquidation, the personal assets of the members are not protected.
A Serbian limited partnership (K.D.) is similar to the above type of partnership, but it has two types of members: ones with unlimited rights and liabilities in the entity, called general partners, and at least one partner with rights and liabilities limited by the contribution at the partnership’s capital. There is no minimum share capital request for starting this type of company in Serbia.
Steps for company formation in Serbia
If you would like to register a limited liability company in Serbia, you should pay attention to the following steps:
- Prepare and draft the Articles of Association with information about the company and the owners.
- Appoint a representative for your business (talk to our specialists and ask for support in this matter).
- Fill out the application form for business registration with the Serbian Business Registration Agency.
- Open a bank account for the minimum share capital and for future financial operations.
- Apply for special licenses and permits before starting the activities in Serbia.
- Apply for the company’s seal and then register for tax purposes in Serbia.
The process of the company’s formation in Serbia
From 2018, on the Business register agency’s website, there is a possibility of electronic registration of the entrepreneurs. Also, it is possible to set up the LLC online, or electronic set up of the LLC (electronic set up of one-member or multi-member limited liability company)
To successfully register through the site of the business register, the person who applies must have
- an electronic signature
- An installed reader of electronic cards and installed application for electronic signing
- Visa, Master Card, or Dina pay card
The electronic application must be submitted by a future entrepreneur or physical person, as well as the person he authorizes. The electronic application for setting up an LLC can be submitted by a future member of that company, a physical person, but also a person authorized for signing by a future member of the company.
The procedure of setting up a firm in Belgrade
A bit complicated procedure is related to setting up a limited liability company. As we have written before, the LLC as a legal person can have one or more members. The members can be founders, so the LLC can have one or more founders. It can also be founded by physical or legal persons. The LLC as an entrepreneur is registered to perform certain activities under one name.
This is the documentation necessary for setting up the company in Serbia
- A unique registration application for setting up the LLC and signing into the register of taxpayers signed by the legal representative of the legal person (authorized representative) or the person who has full power authorized by the legal representative
- The company’s members proof of identity – a photocopy of ID for domestic citizens (a photocopy of passport for a foreign citizen; if the founder is a legal person then he submits an abstract from the Register where he is previously registered
- The Memorandum of association (the Decision for a one-member company or the Contract for the LLC with more than one member) with certified signatures of all the founders or members
- the decision of naming a legal representative, if he is not decided by the memorandum of association
- certified signature of the legal representative
- The confirmation from the bank about paying the money share as proof of paying the setup fee (if the money share is brought into the company)
- The agreement of members about the evaluation of non-money share (only if the non-money share is brought into the company)
- The proof about paid fees for registration of the LLC and the proof about the paid fee for registration and issuing the
Managing the limited liability company can be unitary or bicameral and that is decided by the founders before they set up the LLC. If managing is unitary, that means that the firm will have one or more directors. If it is bicameral, that it will have one or more directors and a board of directors.
The steps after setting up the company in Serbia
1. The company’s stamp
2. Opening a bank account
3. Applying in the tax administration after registering the company
4. A qualified electronic signature
5. Whether to enter into the VAT system
6. Choosing an accounting outsourcing firm in Serbia
What is a virtual office in Serbia?
A virtual office in Serbia is a set of services destined for foreigners looking for other options instead of a traditional business office. This is subject to low costs and among the advantages of such a virtual office, we mention:
• a notable business address in Belgrade or any important city in Serbia;
• local phone and fax numbers linked to the new business in Serbia;
• call answering and message forwarding in compliance with the owners’ requests;
• the support of a meeting room for conferences and business consultations;
• collection of bank statements and any related documents which can be forwarded to the business person.
Economy overview in Serbia
With a strategic position in the central part of the Balkans, Serbia has a very encouraging market strategy. The Serbian workforce is highly educated and cheap. Serbia has signed very attractive treaties with Western Balkans countries, the USA, EU countries, etc. It signed a free trade agreement with Russia, which allows access to over 150 mils. consumers market. Special measures are taken to encourage foreign investors who want to establish subsidiaries in Serbia, like the special treatment granted to the entrepreneurs who invest in fixed assets, with a capital amount above EUR 8 million and hire more than 100 employees in the investment period. These companies are not paying the corporate tax for a period of 10 years. Serbia also has the smallest corporate tax rate all over Europe.
Double taxation treaties are signed with more than 50 countries. Serbia has become a candidate state to the European Union and specific measures are taken for reforming the state administration and public finances. Fiscal consolidation is another goal of the Serbian government, aimed at reforming state-owned enterprises