Serbia is fast becoming a hotspot for entrepreneurs and investors looking to set up a business. Its growing economy, strategic location, and business-friendly policies make it an attractive destination for international companies. This guide will walk you through the essentials of company formation in Serbia, highlighting key benefits and the steps required for a smooth setup process.
Why Choose Serbia for Your Business?
Serbia’s popularity as a business destination has been rising for several reasons, some of which are its competitive tax rates, numerous free economic zones, and well-developed infrastructure. Here are some compelling reasons why you should consider Serbia for your business venture:
1. Strategic Location. Serbia is ideally situated in the heart of the Balkans, offering easy access to the European Union, Russia, and Asia. With several trade agreements in place, including a Free Trade Agreement with the EU and Russia, businesses can benefit from zero or reduced customs duties, making Serbia an excellent export hub.
2. Competitive Tax System. Serbia offers one of the most attractive corporate tax systems in Europe. The corporate income tax rate is a flat 15%, which is highly competitive compared to many neighboring countries. This is complemented by incentives such as tax holidays, exemptions, and deductions available in free economic zones, which offer even more financial advantages.
3. Skilled Workforce. The country boasts a highly educated and skilled workforce, especially in IT, engineering, and manufacturing sectors. Salaries remain competitive, enabling businesses to maintain a high level of productivity without significantly impacting their costs.
4. Free Economic Zones. Serbia’s Free Economic Zones (FEZs) are specially designed areas offering significant financial incentives, including exemptions from VAT, customs duties, and lower local taxes. Setting up in an FEZ can provide businesses with a competitive edge and opportunities for rapid growth. There are currently 15 free economic zones in Serbia, with locations strategically placed throughout the country to support various industries.
Types of Companies You Can Register in Serbia
Before diving into the registration process, it’s important to understand the different types of legal entities you can establish in Serbia. Each has its specific characteristics and requirements:
1. Limited Liability Company (LLC). The most common and preferred type of entity for foreign investors, an LLC (or “društvo sa ograničenom odgovornošću” (DOO) in Serbian) offers limited liability for shareholders and flexible management structures. An LLC can be formed by one or more shareholders, with a minimum capital requirement of just 100 RSD (less than 1 Euro).
2. Joint Stock Company (JSC). A JSC (“akcionarsko društvo” (AD)) is better suited for larger companies planning to go public or operate in sectors requiring significant capital. A minimum capital of 3,000,000 RSD (approximately 25,000 Euros) is required to establish a JSC.
3. Representative Office. Foreign companies not ready to fully commit to opening a business in Serbia may consider establishing a representative office. It allows you to explore business opportunities, promote your products or services, and conduct non-commercial activities without having a full-fledged business presence.
4. Branch Office. Foreign companies may also set up branch offices in Serbia. While not a separate legal entity, a branch allows the parent company to operate locally, handling business transactions and activities in Serbia.
Steps to Register a Company in Serbia
Once you’ve chosen the type of entity, the next step is to begin the registration process. While it may seem complex, the process is straightforward if you follow the steps below.
1. Reserve a Company Name. Your company must have a unique name that complies with Serbian regulations. You can check the availability of the desired company name with the Serbian Business Registers Agency (SBRA) and reserve it for a certain period before registration.
2. Prepare the Required Documents. The key documents required for company registration include:
- Founding Act or Articles of Association
- Proof of identification (passport copies) of the shareholders and directors
- Proof of registered office address in Serbia
- Bank certificate showing the capital deposit (for certain types of companies)
3. Submit Documents to the Business Registers Agency. Once your documents are in order, submit them to the SBRA. The process can usually be completed within 5 to 7 business days, provided all documents are in order.
4. Obtain Additional Licenses. Depending on the type of business you’re planning to run, you may need additional permits or licenses from relevant authorities. Sectors such as telecommunications, energy, and construction may require special approvals.
5. Register for Taxes. All companies in Serbia must be registered with the Serbian Tax Administration. You will need to register for VAT if your company’s annual turnover exceeds the threshold, or voluntarily register to take advantage of VAT refunds.
6. Register Employees. If you plan to hire staff, you will also need to register your employees with the National Employment Service and the relevant social security bodies.
Setting Up in a Free Economic Zone
Establishing your company in a Serbian Free Economic Zone can provide additional financial advantages, including tax exemptions and simplified administrative procedures. For example, companies in FEZs benefit from:
- Exemptions from VAT and customs duties
- A simplified export-import procedure
- Lower utility costs
- Substantial government support for infrastructure
These zones are spread across different parts of Serbia, each offering its advantages based on proximity to major cities or transportation hubs.
Legal Support and Consulting
While relatively straightforward, setting up a company in Serbia involves navigating local laws, tax regulations, and bureaucratic procedures. It is recommended that you seek professional assistance to ensure compliance with all legal obligations and avoid unnecessary delays. Our experts can assist you with every aspect of the company opening, ensuring that the setup process is smooth and efficient.
Conclusion
If you are looking for a good opportunity to set up your business, Serbia is a highly recommendable destination with immense opportunities waiting to be discovered. Business people flock here to take advantage of its Free Economic Zones, skilled workforce, strategic location, and benign taxation. You can set up a company here without much hassle if you follow the procedure to a tee and use expert assistance.
You may be interested in reading about a successful company opening case from our practice. Keep in mind that if you choose Serbia, you will need to plan every aspect of the registration process carefully. If you are not sure that you can manage on your own, follow the link to discuss your situation with an expert at no charge and see what help you may need to go through the process smoothly.
We wish you luck with your Serbian business!