Serbia has a low level of bureaucracy, and there are no raider takeovers. So it is quite easy to set up and run a business in Serbia. The year 2021 in this country was a period of stagnation, and now the economy has just begun to develop. As a result, there are business opportunities and many unoccupied niches in Serbia.
Best Regions for Doing Business in Serbia
The capital of Serbia is Belgrade. It is an economic, cultural, and scientific center. 16% of the country’s population is concentrated here. So, when determining the location where to start a business in Serbia, the best decision would be to open your business in Belgrade.
The second-largest city is Novi Sad, it is also the capital of the autonomous region of Vojvodina and a river port. The population of the region is 26% of the total population of Serbia.
Small districts are distinguished by a narrow focus on the economy, therefore, if you are not engaged in a specific narrow specialization, you should not choose them to start your own business.
Tourist regions are also not recommended: Serbia has no access to the sea, so the main tourism there is walking; also, the popularity of Serbia, even in the high season, is relatively low.
Serbian business legislation
In Serbia, entrepreneurship is based on the principles of a free market. The government does not put obstacles to the development of small and medium-sized businesses.
As a business development program with Serbia, the government encourages direct investment through the financial support of up to EUR 10,000 per job. This way the following projects are supported:
- Greenfield. Type of investment with no infrastructure;
- Brownfield. Type of investment based on existing production sites that are undergoing reconstruction and/or major repairs.
Forms of ownership for doing business in Serbia
There are the following legal forms of business in Serbia:
Individual entrepreneur – preduzetnik
The founder is liable for the obligations with his/her property. It is the simplest form of business.
Limited Liability Company – D.O.O.
Liability for the company’s obligations is guaranteed by the authorized capital. The minimum authorized capital for LLCs in Serbia is 500 euros. A society can be founded by one person or a group of persons.
Joint Stock Company – A.D.
It opens to large-scale businesses and can be open or closed. The minimum authorized capital for opening a closed joint-stock company in Serbia is 10 thousand euros, for an open one – 25 thousand.
Company registration procedure in Serbia
Before starting the registration procedure, an entrepreneur needs to come up with the name of the company and take care of its legal address. It is necessary to prepare constituent documents, a real estate lease agreement, and a photocopy of the passport.
Next, a business person needs to open a bank account, and then submit the documents to APR (Agencija za Priivredne Registre).
After checking, a specialist will take them to work, and in seven days the company will be open. An entrepreneur will be given a document confirming the registration of a legal entity, as well as a personal tax number.
After registering a company, a business person needs to register with the tax office, the social security service, and the pension fund. It is worth noting that business owners are granted a residence permit in Serbia, which does not need to be renewed, as is the case with a residence permit with a work visa.
Buying a ready-made business
Buying a business in Serbia can be both direct and indirect. Direct is carried out through representative offices and branches. A branch and a representative in Serbia is an organizational part of the founders who are not legal entities. But a representative has restrictions on the implementation of entrepreneurial activities. When agreeing with a Serbian partner, it is necessary to stipulate the possibility of applying foreign law and the jurisdiction of a foreign state.
An indirect business can be purchased through a sales agent, merchant, or franchise. A franchise means that a Serbian franchisee gets instructions and a license from the franchisor and operates under its brand, paying royalties.
Obtaining a business visa to Serbia
To apply for a national visa, you need the following documents:
- copy and original of the passport;
- 2 photographs 3.5×4.5 cm;
- document confirming financial security;
- an insurance policy, a coverage amount of which is 20.000 euros;
- a receipt for payment of the consular fee;
- round trip tickets;
- official invitation from the employer.
Business taxation in Serbia
The Serbian tax system currently includes:
- income tax – 14%;
- Payments from the payroll – 20%;
- payroll tax – 3.5% (paid by the employer);
- pension insurance – 9.8% (employee and employer pay in half);
- medical insurance – 5.95% (employee and employer pay in half);
- employment insurance – 0.55% (employee and employer pay in half);
- corporate income tax – 14%;
- financial transactions tax – 0.3%;
- sales tax – 17 + 3%, not charged when exporting products;
- service tax – 17 + 3%, not charged when exporting services;
- real estate tax – 0.25-0.4%;
- inheritance and gift tax – 3-5%;
- property transfer tax – 5%.
There are also lump-sum taxes for entrepreneurs. They are calculated on a fixed basis, depending on the type of activity.