Serbia pursues comprehensive liberalisation of the economy and setting up the most favourable conditions for potential foreign investors entitled to own and manage local companies without any restrictions (except for banks, insurance companies, broadcasting corporations, and weapons manufacturing and selling businesses where foreigners’ participation is limited).

The legal and organisational forms frequently chosen by foreign investors to establish their business in Serbia are:

• Partnership;
• Private limited liability company;
• Public Joint-Stock Company.

In Serbia, there are two types of partnerships – general partnership with unlimited liability and partnership where members have limited liability.

Unlimited liability partnership (o.d.)

Unlimited liability partnership (o.d.) is established by at least two physical or legal persons of any residence without a need to pay up any capital.

All partners have equal rights and bear unlimited liability for corporate debts and obligations.

Partners may not transfer their rights to third parties without the general meeting’s corresponding decision.

Partnership is managed by general partners in accordance with the Memorandum of Association.

Limited liability partnership (k.d.)

Limited liability partnership (k.d.) is established by at least two physical or legal persons (one being the general partner) of any residence, without a need to pay up any capital.

General partners have equal rights and bear unlimited equal liability for corporate debts and obligations; The other partners are liable only within their share.

Partners may not transfer their rights to third parties without the general meeting’s corresponding decision.

Partnership is managed by general partners in accordance with the Memorandum of Association. If the other partners are involved in the partnership management, they lose the limited liability status and bear unlimited liability along with general partners.

Private limited liability company (d.o.o.)

Private limited liability company (d.o.o.) may be established by one physical or legal person of any residency. Each member has to contribute at least €10 to the company’s capital.

The entire capital is paid up at the time of registration. Part of the capital may be contributed in the form of intangible assets, such as patents, technical documentation, equipment, etc.

Maximum number of members is 100. If in the course of operations the number of members exceeds 100, the company will have to re-register into an open joint-stock company.

Private company may issue only registered shares which may not be offered to the public or freely transferred to third parties without obtaining all members’ approval at the meeting.

Company may be managed by one director – resident or non-resident of Serbia. If a foreign director does not intend to stay in Serbia for more than 90 days per year, he is not required to obtain a work permit in a local company. A director has full authority to resolve any issues related to the company’s operations, and is personally responsible for any breach of the statutory documents and current regulations. The company members’ meeting is competent to appoint and dismiss directors.

Public company limited by shares (a.d.)

Public company limited by shares (a.d.) may be established by one physical or legal person (resident or non-resident of Serbia); the minimum charter capital is €25’000.
The entire registered capital has to be subscribed by shareholders, and no less than a half of the capital should be paid up at the time of incorporation. The other half may be paid up within 2 years from the date of incorporation.

The maximum number of shareholders is not limited;

Both registered and bearer shares may be issued by the corporation. Shares may be offered to the public, freely transferred to third parties and registered on the stock exchange (the issue prospectus needs to be registered with the Securities Commission of Serbia).

The corporation is managed by the Board of Directors to be elected at the general shareholders’ meeting. It is composed of no less than 3 and no more than 15 members in accordance with the Charter or the decision of the general shareholders’ meeting. Director is not required to be a shareholder unless otherwise provided for by the Charter. Foreigners may become directors.

A corporation listed on the stock exchange has to elect a Supervisory Board composed of at least 3 members. The Supervisory Board’s rights and obligations are determined by the Charter.

Each Serbian company is obliged to appoint an auditor for the preparation and filing of periodic financial statements.

As a rule, Serbian companies are not required to obtain a business license, except for such activities as banking, insurance, stock exchange transactions, leasing, medical and other activities specially supervised for by the Government.

The standard tax rate for income (regardless of the place where it is generated) in Serbia is one of the lowest in Europe.

Capital gains, interests, dividends, royalties, proceeds from leasing, real estate sales and other similar payments are subject to withholding tax in Serbia (unless the double taxation agreement is in force).

Serbia is not a tax heaven or offshore jurisdiction, and a concept of Serbia tax exempt company (and/or Serbia offshore company, International Business Company, trust, foundation etc. registration) does not exist in Serbia as such. A company formation in Serbia could be arranged with a professional registered agent providing incorporation, virtual office and other corporate services in Serbia. To set up a company in Serbia is possible by correspondence, but to open a bank account in Serbia will, most probably, require a personal visit.

Serbia Double Taxation Agreements

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99 classical offshore, onshore and midshore jurisdictions of Europe, America, Middle East, Asia, Africa and Oceania‍