Establishing a Company in Serbia: A Guide to Business Ownership Types

BusinessLegal

  • Author Jane Scaplen
  • Published June 11, 2024
  • Word count 1,018

Discover the advantages of establishing a company in Serbia, a burgeoning business hub in Southeast Europe.

Serbia’s appeal as an investment destination is soaring, mainly due to its strategic position as a commercial hub in Southeast Europe, coupled with high European living standards and considerable economic liberties for business owners. The Serbian government is highly supportive of foreign investments, actively promoting business engagement through compelling incentives such as significant tax breaks and other attractive benefits that enhance profitability and ease of doing business.

This guide outlines various types of company ownership available in Serbia and provides a detailed examination of the distinctive characteristics of each business structure. By exploring these options, potential investors and entrepreneurs can gain insights into selecting the business form that can maximize their venture’s potential in this dynamic market.

Effortless Company Formation in Serbia

Setting up a company in Serbia is streamlined thanks to its stable economy, sophisticated financial services, robust online banking systems, and favorable attitude toward foreign investment. The entire process (from company registration to opening a corporate bank account) can be completed quickly, typically within a few days, without ever setting foot in Serbia. This efficiency is enabled by the option to delegate authority to a local representative through power of attorney, allowing them to manage all dealings with Serbian regulatory bodies and financial institutions directly on your behalf.

Serbia’s strategic position in Southeast Europe enhances its appeal as a gateway to broader markets, making it an attractive destination for entrepreneurs looking to expand. The government supports this with incentives that simplify doing business, including straightforward legal and registration processes designed to attract foreign direct investment. The combination of a welcoming business environment, advanced banking infrastructure, and strategic location makes Serbia a prime location for businesses aiming to establish or expand their presence in the European market.

Types of Business Ownership in Serbia

Sole Proprietorship (or Preduzetnik): The simplest form of business in Serbia is the sole proprietorship. Similar to other countries, the sole proprietor assumes complete responsibility for all business activities. This type of ownership is suitable for small-scale operations that rely heavily on the company owner’s efforts. This type of company has limited potential for growth and flexibility.

Partnerships: Serbia recognizes two main types of partnerships:

General Partnership (or o.d.): This form involves two or more partners, who can be either individuals or legal entities. There are no citizenship or residency requirements for partners, nor is there a minimum capital requirement. In a general partnership, each partner is fully responsible for the business's debts and obligations. Any addition of new partners requires unanimous approval from existing partners.

Limited Partnership (or k.d.): Distinguished from a general partnership by the presence of both general and limited partners. In a limited partnership, general partners are in charge of management and carry unlimited liability for the company's financial obligations. In contrast, limited partners' liability is capped at the amount they invest in the business. Limited partners remain silent to varying degrees.

Choosing the proper business structure impacts your day-to-day operations, tax responsibilities, and legal liabilities significantly. A thorough understanding of each business type's specifics will enable you to choose a structure that best suits your business objectives and risk preferences.

Starting a Private Limited Company in Serbia

In Serbia, the most commonly chosen form of business ownership is the private limited liability company, known as "d.o.o." This entity allows for one or more shareholders (including individuals or legal entities, residents or non-residents of Serbia). A d.o.o. is set up by a group of people or companies and is restricted to a maximum of 100 shareholders. If a business grows beyond this size, it must transition to a public company.

Shares in a d.o.o. are registered and cannot be freely sold or transferred without the consent of other shareholders. The company’s management is typically handled by one or more directors, who do not need to be legal residents of Serbia but are fully responsible for company operations.

Transitioning to a Public Limited Company

For businesses with larger ambitions in Serbia, forming a public limited liability company, abbreviated as "a.d.," is suitable. Similar to a d.o.o., the registration process for an a.d. requires a minimum capital of 25,000 euros, with at least half due upon formation and the remainder within the first two years.

Public companies can issue freely tradable shares distributed among an unlimited number of shareholders. If certain conditions are met, these companies can be listed on the Belgrade Stock Exchange or international exchanges. The management structure of an a.d. involves a Board of Directors, which must have between three and fifteen members as dictated by the company’s Articles of Association.

Regular Compliance Requirements in Serbia

All companies in Serbia, regardless of type, must adhere to standard compliance requirements. Such compliance includes maintaining a registered office address. The office can be rented in a prestigious district of Belgrade for approximately 1,200 EUR per year. Companies are also obligated to keep financial records, typically managed by an accountant who handles bookkeeping and tax-related duties for a fixed monthly fee starting at 100 EUR.

Comprehensive Support for Company Formation

Professional assistance in navigating the nuances of the process makes setting up a company in Serbia pleasantly straightforward. Our services include company formation, whether a new entity or a branch of an existing one, even if based in an offshore jurisdiction. We also assist in opening corporate bank accounts and provide ongoing maintenance and compliance services through our Belgrade office.

For nearly two decades, we have been assisting clients in navigating bureaucratic challenges across various countries. To take the first step in establishing your company in Serbia, contact us for a free consultation and benefit from our extensive experience and professional support.

Learn More

For more detailed information about setting up a company in Serbia and the benefits it offers, please contact Serbia Wealth experts directly. Our experts will be happy to provide individually tailored advice and support and help you understand the intricacies of Serbian corporate law and business practices.

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