Serbia - Company Incorporation

serbia incorporation

Starting a Business in Serbia

Complete form RJR-1, form OP, forms M1 and M4
Notarise the Memorandum of Association and lease contract at the Court
Open a bank account; pay founding deposit or its part and all other fees
Obtain the registration certificate Business Registers Agency
Obtain PIB - tax identification number at the Municipal Hall; Certify the signatures for opening bank account
Register the employment contracts with the Employment Organization/Fund
Obtain certificate from the PIO Fund (pension fund)
Obtain certificate from the Health Fund

The most commonly used legal form in Serbia is a limited liability company. A shareholder may have only one share in the company, which is expressed as a percentage. The share capital may consist of cash and contributions in kind such as equipment, goods, know how and according to the new law, work and services. The value of contributions in kind can be assessed by the shareholders themselves.

The new Company law provides that limited liability companies can have from 1 to 50 members, and that the minimum share capital is €500. At least one half of the share capital must be paid prior to registration of the company, and the remaining half is payable within two years from registration.

Serbia today presents the most vital part in the Balkans region. Due to its emerging potential and very low operational and labour costs, Serbia will soon be acting as the center of this region in terms of international economy and business. At the same time, labour costs are low and there are numerous tax incentives for investors.

Serbia has one of the lowest corporate profit tax rate in Europe.

General Information

  • Location: South East Europe - Balkans, borders Montenegro, Bosnia and Herzegovina, Croatia, Hungary, Romania, Bulgaria, Macedonia and Albania.
  • Area: 88,361 sq km.
  • Population: 7.5 million.
  • Capital: Belgrade.

Economic Information

The cost of labour in Serbia is significantly lower than in most Central and Eastern European countries.

  • Average net monthly salary is €240.
  • Percentage of population speaking English language is more than 40%.

Tax information

The tax regime in Serbia is conducive to investments, with the following major features:

  • One of the lowest corporate profit tax rate in Europe set at 10%.
  • Tax credits for investing in fixed assets of up to 80% of the assets’ value.
  • A 10-year tax holiday for investments of €7.5 million or more.
  • Government subsidies, tax exemptions, and other incentives for creating new jobs.

VAT

The tax rates prescribed by the VAT Law are as follows:

  • The standard VAT rate is 18% which is applicable for most taxable supplies.
  • The lower VAT rate is 8% which is applicable for basic food stuffs, newspapers and communal services.

In addition to these tax rates, a 0% tax rate is also applicable. A 0% tax rate with the right of deduction of input VAT applies to turnover of the following goods and services:

  • Export of goods.
  • International air transport.

A 0% tax rate without the right of deduction of input VAT applies to turnover of the following goods and services:

  • Trading with shares and other securities.
  • Insurance and reinsurance.
  • The lease of apartments and business premises.

Corporate profit tax

All legal entities which generate revenue by selling products and providing services on the market are obliged to pay the Corporate profit tax on generated profit at the rate of 10%. Residents are taxed based on their worldwide income. Non-residents are taxed only based on their income generated from the sources within Serbia.

A withholding tax is calculated and paid at the rate of 20% on certain forms of income by a non-resident. This includes dividends, shares in profits, royalties, interest income, capital gains, lease payments for real estate and other assets.