As global markets evolve, Serbia stands out as an attractive location for new business opportunities. With its strategic position, combined with the skilled workforce and a growing economy, Serbia is a prime destination for expanding your business.
Some of the initial questions that usually pop out when considering establishing a company are:
- Who can be a founder of a company in Serbia? Are there any limitations?
- How long does it take to establish a company in Serbia?
- What are the requirements?
- What is the process of creating a company in Serbia?
- Are there different types of legal entities? Which one I should choose?
If you are looking for the answers to these questions, stay tuned. In this blog, we will answer all these questions and provide a step-by-step overview of the company formation procedure.
To establish a company in Serbia, it is necessary to take several steps and comply with the process defined under the law. However, if properly planned, the company formation process in Serbia is straightforward and swift. Upon submitting the application to the Serbian Business Registers Agency, the company will be registered within just 5 working days!
1. What should I do before starting the company formation process?
Before starting the company formation process, it is necessary to make several business decisions, that will help you to prepare for the company formation process:
1.1. Choosing the right form of your company is the first step.
When deciding which legal form is adequate for your business, it is important to take into consideration all options that you have at your disposal. Serbian legislation recognizes four different forms of companies:
- Limited Liability Company (LLC),
- Join-stock Company,
- General Partnership, and
- Limited Partnership.
LLC, as the most common legal form of companies in Serbia, will most likely meet your needs. However, each option offers different advantages. When deciding which one is the most appropriate for your business, it is important to take all of them into consideration.
| Shareholder’s liability | Minimum share capital | Minimum number of shareholder | Shareholders are managing the regular business | |
| LLC | Up to the value of their contribution | RSD 100.00 (less than EUR 1) | 1 | No |
| Joint-stock Company | Up to the value of their contribution | RSD 3,000,000.00 (approx. EUR 25,500.00) | 1 | No |
| General Partnership | General partners are liable with their private assets | n/a | 2 | Yes |
| Limited Partnership | Limited partners are liable up to their contribution and general partners are liable with their personal assets | n/a | 2 | No |
LLC is the most common form of company in Serbia and it is likely that it will meet all your needs. For that reason, in this blog, we will focus on LLC and the process of the establishment of an LLC.
Also, it is important to bear in mind that, according to Serbian law, it is possible to register as a natural person who performs business activities, i.e., an entrepreneur. Furthermore, Serbian legislation offers a possibility to establish a branch of foreign company or a representative office of a foreign company. If you would also like to consider these options, you should get in touch with reliable legal advisors, who can provide more information thereon.
1.2. Defining the ownership structure and share capital
Serbian legislation does not impose any limitations when it comes to the founders of a company. Founders can be domestic or foreign legal entities or natural persons. Moreover, a company can have one or more founders. In other words, you can structure the ownership of your company flexibly and according to your specific needs and preferences.
For example, if you already own a company in the US and plan to establish another company in Serbia, the founder of the Serbian company can be either your US company or you as a natural person.
After defining the ownership structure, you should decide what will be the amount of the company’s share capital. The minimum amount of share capital is defined by the law (less than EUR 1 for LLCs), but of course, you can decide to contribute a higher amount of capital.
1.3. Choosing the business name for your company
Choosing the right business name is an essential step in the company formation process in Serbia. The selected name will represent your company’s identity and represent your brand. Once you narrow down your options, it is necessary to conduct research and make sure that the business name is available, and easily distinguished from other registered companies and companies with legal requirements.
1.4. Selecting the right prevailing business activity
In Serbia, each company needs to have one prevailing business activity. This is the core business activity that generates the most of the company’s profit and which the company performs the most.
In addition to the prevailing business activity, the company can also perform other business activities, if there are no limitations imposed by the law. Secondary business activities are not registered.
1.5. Defining Corporate Governance and Appointing a Director of a Company
In Serbia, companies can be organized through one-tier or two-tier corporate governance. If you choose one-tier corporate governance, your company will have a General Assembly, comprised of shareholders and one or more directors. Alternatively, in two-tier corporate governance, in addition to the General Assembly and director(s) company also has a Supervisory Board.
When it comes to the Directors, it is important to bear in mind that Serbian law does not distinguish domestic and foreign citizens. In other words, a foreign citizen can be a Director of a company under the same conditions as a Serbian citizen. If a foreign director desires to reside in Serbia, his/her management position is a valid legal ground for applying for temporary residency and work permit. However, it is not mandatory for a director to reside in Serbia. It is a very common situation that the director of a Serbian company is a foreign citizen who does not reside in Serbia.
1.6. Finding the business address of your company
Each company in Serbia needs to register a seat address. Therefore, before starting the company formation process, it is necessary to find an adequate address that will be registered as a seat of your company. Depending on the needs of a company, you can lease a business premises or use virtual seat services.
2. Drafting and Signing the Articles of Incorporation
Upon deciding on all of the above-mentioned matters, the next step is drafting the Articles of Association, i.e., the Founding Act for your company. Articles of Association define the key aspects of a company’s operations, and the above-mentioned matters are mandatory. However, it is important to bear in mind that Articles of Incorporation can also define some additional matters, such as non-compete and confidentiality.
After preparing the final version of the Articles of Association, it is necessary to sign it and file the application for the registration of a company. In Serbian, the company registration process is done exclusively online. This means that the founder of a company does not have to be physically present in Serbia during the company incorporation process. Moreover, the founder of a company does not need to be physically present in Serbia at any moment.
Before filing the application for the registration of a company, it is necessary to sign the Articles of Incorporation. Considering that the application for company registration is filed electronically, the Articles of Association need to be submitted in the form of an electronic document. There are several ways to achieve this: founder(s) can sign the Articles of Incorporation with their electronic signature issued by the competent bodies in Serbia, it can be signed before the public notary and afterward verified with an electronic signature or signed electronically by an attorney at law, based on the Power of Attorney.
3. Filing the Application for the Registration of the Company
The final step in the process of registration of a company is filing the application to the Serbian Business Registers Agency. As mentioned above, in Serbia, the application for the incorporation of a company can be submitted exclusively online.
The application for the registration of a company can be submitted by a founder, provided that a founder has an electronic signature issued by authorized bodies in Serbia. If you do not have such an electronic signature, you can authorize an attorney at law to do that on your behalf. It is important to note that only attorneys are authorized to file the application for the registration of a company on behalf of the founders.
Once the complete application for registration of a company is submitted to the Serbian Business Registers Agency, the company will be established within 5 working days. Upon successful registration, your company will be granted the company’s identification number (CIN) and tax identification number (TIN).
4. Steps upon the Incorporation of the Company
Once your company is established, it is necessary to take a few more steps to make sure that your company will be able to operate properly and comply with the law.
4.1. Bank Account Opening
Once the company is established, the company’s bank accounts need to be opened promptly, to make sure that your company will be able to operate properly. The exact list of the documents that need to be submitted varies form bank to bank. However, the list of the basic obligatory documents includes the following:
- Application for bank account opening,
- Identification document of the founders of a company, or in the case of the legal entities, an excerpt from the competent business registry,
- Identification document of the company’s director(s),
- Signature Form signed by the director,
- Specimen Signature Card signed by persons who have access to the bank account,
- Other bank forms (such as an agreement on the bank account opening, request for e-banking/m-banking, etc.).
4.2. Obtaining an Electronic Certificate and Registering the UBO of the Company
Upon the establishment of a company in Serbia, it is necessary to obtain an electronic signature for the company’s director. An electronic signature must be used for the submission of financial statements but also can be used for signing electronic documents on behalf of the company.
Furthermore, if the company’s UBOs were not registered in the process of company formation, it is necessary to register the UBOs within 15 days upon registration of the company. The director of the company is obliged to register the UBOs with their electronic certificate.
4.3. Filing a Tax Return
A final, but equally important step is the submission of the tax return, within 15 days upon the establishment of a company. The tax return is submitted to the Tax Administration and represents the application for income tax.
In conclusion, establishing a company in Serbia presents a wealth of opportunities for both domestic and foreign legal entices and natural persons. With its strategic location, skilled workforce, and favorable business environment, Serbia continues to attract investors from all around the world. Throughout this guide, we’ve explored the step-by-step process of company formation, from choosing a business name to taking the necessary steps upon the company establishment. If you are considering establishing a company in Serbia, get in touch with us today!
This text is solely for informational purposes and does not constitute legal advice.
A: NM
