Serbia is a country in the southeast of Europe with a population of 6.8 million people. Even though it is a landlocked country, it has a favorable geographical position with the Danube River crossing trough (2nd largest river in Europe) and for centuries it is considered the place where Asia and Europe are connecting. Today, the country is in the process of obtaining the membership in European Union and has good political and economic relations with Russia, Turkey, and China. Serbia has 15 free trade zones, and because of the free trade agreements with Russia and Turkey, there is customs-free access to 1.3 billion consumers.

According to the Business-Friendly Cities Perception Index Belgrade, the capital of Serbia is considered the city with the biggest economic potential in Europe. Corporate profit tax is 15% and the average gross monthly salary is 772 EUR. The workforce in Serbia is well educated, skilled, and motivated. With all these advantages, Serbia can and will become an ideal base for business activities throughout eastern Europe.

As foreign investments are very important for the further development of Serbia, the government is constantly adjusting the local legal framework to create more benefits and tax reliefs for foreign investors.

In Serbia, a company can be set up and owned by both domestic and foreign citizens and legal entities, which means that a foreign natural person, as well as a foreign legal person, can form a company in Serbia without any restrictions.

The very first step in the entire process is choosing the most suitable legal form for the future company. Apart from an entrepreneur, the Serbian legal system recognizes the following legal forms of companies: 

  1. A limited liability company

  2. A partnership company

  3. A limited partnership company

  4. A joint-stock company

Additional legal forms are as follows:

  1. A branch office of a domestic legal entity

  2. A branch office of a foreign legal entity

  3. Representative office of foreign legal entity

The most common legal form of company in Serbia is a limited liability company – LLC. ( DOO in Serbian)

An LLC is a type of company that can have one or more founders and in which each member has a share in the share capital of the company. The minimal amount of share capital is 100 Serbian dinars with less than 1 US dollar. This is the most popular form of legal entity that is established by foreign companies or natural persons in Serbia. The advantage of this legal form is that the members of the LLC are responsible for the company’s commitment only to the value of their share. They are not responsible for the commitment with their property nor personally, but they bear risk proportional to their share. So, the whole risk remains in the Serbian firm and cannot be transferred to a shareholder who is abroad. Also, the Serbian legal system allows ‘’one-man show’’ LLC where one person can be a 100% owner and a manager of the company.

The procedure of forming the LLC in Serbia has two parts. The first part involves the preparation and notarization of the founding act and application to the Business register. In 5-7 days from the application, the investor will obtain the decision of formation. This part can be done with an investor in person or without his presence but with properly legalized authorization. The second part involves applying for a bank account and finding an accountant. For a bank account opening the presence of an investor is necessary. After the completion of these proceedings, the investor will have a full set up company which he can operate from anywhere around the world.

Written by Att. Rade Zatezalo and Att. Milan Momcilovic from Nis, Serbia