Company registration in Serbia
Company registration in Serbia in the legal form of LLC, entrepreneur, branch office or representative office
Step 1: Determining the legal structure of your business
There are two most common legal structures in Serbia:
- Lump sum taxable entrepreneurship (under Individual Income tax Law)
- Limitted liability company (LLC – under Company Law)
A lump sum taxable entrepreneurship is a business that’s owned and run by one person, where the government makes no legal distinction between the person who owns the business and the business itself. It’s the simplest way to operate the business. You don’t have to name your business anything other than your own, personal name, but if you want to, you can add it its own distinctive name.
It’s easy and inexpensive to create an entrepreneurship because there’s only one owner, and that owner has complete control over all business decisions.
Since the owner and the business are legally the same, the owner is personally liable for all the debts and obligations of the business.
Taxes (income tax and social security taxes) are calculated by tax authorities based on lump sum income. Taxes are fixed and do not depend on your real income.
LLC is a type of business structure that’s more complex than sole entrepreneurship. Members can include individuals other LLCs and foreign entities. “Single-member” LLC, those having only one owner is allowed as well.
As the name suggests, owners of an LLC have limited liability, meaning that they personally are not responsible for any financial or legal faults of the business. This reduction in risk is what makes an LLC a very popular business structure.
Step 2: Choose the Appropriate Business Name for Your Company
The company conducts business activities under its business name registered at the Business Registers Agency. When choosing the business name, it is important to follow certain rules. That is due to the fact that the business name not in accordance with the rules prescribed by the law cannot be registered, which is often the reason for dismissing the application for company registration in Serbia.
It is also necessary to conduct a search of the desired business name in the National Database of Trademarks at the website of the Intellectual Property Office, in order not to file an application for a name which contains the sign already protected as a trademark.
Step 3: Draft the Memorandum of Association for LLC
A Memorandum of Association is the constitutive act of every LLC, which may be in the form of:
- Decision on the formation of the llc – if one person is the founder of the LLC
- Articles of association – if several persons are the founders of the LLC
The minimum amount of the registered share capital (monetary and non – monetary) is 100.00 RSD unless the law prescribes for a higher amount.
Step 4: Notarize the Signature(s) of the LLC Founder(s) on the MoA
The signature(s) of the founder(s) needs to be notarized in the office of a public notary.
Step 5: Pay the Fees for the Agency’s Services
Prior to submitting the documentation for the LLC registration in the Agency, in accordance with the following step, you are required to pay the LLC registration fee (4,900.00 RSD) and the fee for registration and publication of the LLC’s MoA (1,000.00 RSD).
Registration fee for entrepreneur is 1,000.00 RSD for on line registration.
Step 6: Submit Paperwork for LLC Registration to the Agency
The LLC registration procedure is done in the Agency via a one-counter registration system, which enables that the LLC, along with registration, receives:
- Company number (CN)
- Tax identification number (TIN)
- Health insurance number, issued by National Health Insurance Fund (NHIF)
The deadline for filing the application for registration is 15 days from the effective date of the MoA.
Step 7: Completing and Notarizing the OP Form for LLC
In order to be able to dispose of the funds on the bank account, which you would open in accordance with the following step, the so-called “OP form” needs to be completed, i.e. the form of notarized signatures of persons authorized for representation.
Step 8: Opening a Company Bank Account
After the Agency enacts the decision on registration of the LLC or entrepreneur, you will need to open the company’s bank account in the bank of your choice.
Step 9: Submitting tax returns to tax authorities
LLC has to submit PDP tax return form for company tax in 15 days from the date of registration.
Entrepreneur has to submit PPDG1R tax return form for lump sum taxation in 15 days from the date of registration.
Establishing Branch and Representative Offices of a Foreign Company in Serbia
The branch of a foreign company does not have the status of a legal entity but is rather the company’s organizational unit through which the company conducts business in Serbia. The Company law provides for obligatory registration of the foreign company’s branch. The foreign company’s liability for obligations of its branch toward third parties is unlimited.
The foreign company’s representative office is its organizational unit which may conduct only preliminary and preparatory actions for the conclusion of a foreign company’s business, as well as its current legal affairs. As with the foreign company’s branch, the registration of the foreign company’s representative office is obligatory, it does not have the status of a legal entity, and the foreign company is liable for obligations towards third parties that arise in the business conduct of its representative office.
Documents needed for registration:
- Completed registration form for the formation of foreign company’s branch/representative office
- Decision of the competent corporate body of company on the formation of branch/representative office
- Excerpt from the registry in which the foreign company is registered, with the Serbian translation by an authorized court translator
- Evidence of the account numbers through which the foreign company conducts business
- Statement of the authorized person of the foreign company on taking responsibility of the company for all obligations which arise in the business conduct of its branch/representative office, notarized by the competent authority, translated to Serbian and certified by an authorized court translator
- Certificate of payment of registration fee for the formation of foreign company’s branch/representative office (4,900.00 RSD)