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Dissolution of a Serbian Limited Liability Company

Dissolution of a Serbian Limited Liability Company

Dissolution of a Serbian limited Liability Company is the procedure that is completed before Serbian Business Register Agency. This procedure is hard and rather complicated, which includes preparation of all acts necessary for conducting the dissolution procedure, filing relevant registration applications to the Business Registers Agency, as well as all other actions aimed at lawful implementation of the dissolution process.

What are the legal grounds for dissolution?

Dissolution before Serbian Business Register Agency can be done on 4 legal grounds:

  1. After the dissolution or compulsory dissolution procedure has been carried out;
  2. After the conclusion of bankruptcy proceedings;
  3. In accordance with The Decision or Termination of the Founding of a Representative Office / Branch of a Foreign Company;
  4. Due to a status change that results in the deletion of one of the participants from the Register.

If a company is deleted from the Register after the dissolution bankruptcy or status change process has been carried out, it is obliged to submit Extraordinary Financial Statement to the Register of Financial Statements and Credit ratings. In cases of deletion, branches of a foreign legal entities are also obliged to submit Extraordinary Financial Statements.

What is Extraordinary Financial Statement (the Statement)?

The Statement is to be submitted within 60 days from the date of preparation. It is to be submitted using the Agency’s special information system, in electronic form, by selecting the appropriate request, signed by a qualified electronic signature of the legal representative.

If the obligors does not submit the Statement through a special information system, but submit it in paper form, the Agency will inform the obligor in a special letter that the stated Statement has not been submitted in accordance with the Law on Accounting, in electronic form, and that it will not be processed or published on the website Agencies. Also, it must be signed by a qualified electronic signature of the legal representative.

This Statement consists of the following documents:

  • Balance Sheet; and
  • Profit and Loss Sheet.

What documents must be submitted in this process?

To successfully finish this procedure following documents must be submitted:

  • Application for Deletion from the Business Register Agency, after the completion of the dissolution procedure,
  • The Decision of the General Assembly to end the dissolution procedure,
  • Statement of the Liquidator that the dissolution has been finished,
  • Statement of the Liquidator that all obligations of the Company on the basis of reported claims have been fully settled and that no other actions are to be undertaken against the Company,
  • Decision on Division of the Dissolution Residue of the Company,
  • Decision of the company on the person to whom the books and documents are entrusted for safekeeping or the statement of the Liquidator on the name and address of that person,
  • Proof of termination of tax liabilities issued by the competent Tax Authority, which is not older than five days at the moment of filing a request for deletion from the stated Register, pursuant to the provision of Article 29, paragraph 7 of the Law on Tax Procedure and Tax Administration.

If you want to know more on this topic, or you need assistance regarding dissolution of a Serbian Limited Liability Company, contact Asst Office team today!

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Corporate Tax in Serbia

Corporate Tax in Serbia
Prof. Dr. Jelena Šogorov Vučković Legal & Banking Consultant

Corporate Tax in Serbia is defined by the Law on Corporate Tax. Corporate Tax rate is proportional and uniform, and it is rated at 15%.

Unless otherwise stipulated by the International Agreement on Avoidance of Double Taxation, the Corporate Deduction Tax rated at 20% will be calculated and paid on income derived by a non-resident legal entity from a resident legal entity on the basis of:

  1. Dividends and profit share in a legal entity, including the dividend referred to in Article 35 of this Law on Corporate Tax;
  2. Compensation for copyright and related rights and industrial property rights (hereinafter referred to as: royalties);
  3. Interest;
  4. Compensation from the lease and sub-lease of real estate and movable property in the territory of the Republic;
  5. Compensation from market research, accounting and auditing services and other legal and business consulting services, regardless of the place of their provision or use, or the place where they will be provided or used.

The Deduction Tax will also be calculated and paid on the income of a non-resident legal entity on the basis of performing entertainment, artistic, sports or similar programs in the Republic of Serbia, which are not taxed as income of individuals (performers, musicians, athletes, etc.), in accordance with the regulations governing the taxation of personal income.

Are there any exceptions?

The exception from above stated, can be find regarding the revenues generated by a non-resident legal entity from a jurisdiction with a preferential tax system on the basis of royalties, interest, fees on the lease and sub-lease of real estate and movable property in the territory of the Republic of Serbia, as well as fees on the basis of services, regardless of the place of their provision or use, that is, the place where they will be provided or used, the Deduction Tax is calculated and at the rate of 25%.

Additionally, Deduction Tax will not be paid on the income generated by a non-resident legal entity, that is, a non-resident legal entity from a jurisdiction with preferential tax system, from interest on debt securities issued in accordance with the law by the Republic of Serbia, Autonomous Province, a Local Government or the National Bank of Serbia.

When does tax return must be filed?

The resident legal entity is obliged to, within 3 days from the day of payment of the income to file a tax return. Non-resident legal entity – recipient of income, is obliged to submit a tax return to the competent Tax Authority within 30 days from the day of income generation, through a tax representative determined in accordance with the Regulations Governing the Tax Procedure and Tax Administration, in the Municipality in whose territory the real estate is situated, where the seat of a Company in which the non-resident taxpayer holds a share or securities that are the subject of sale, that is, the seat or residence of the taxpayer of the lease or sub-lease of movable property, depending on the basis of which the competent Tax Authority makes a Decision.

For all questions regarding Corporate Tax, Value Added Tax (VAT) or any other taxation feel free to contact Asst Office at any time.

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How to Register a Branch Office of a Foreign Company in Serbia

How to Register a Branch Office of a Foreign Company in Serbia
Vuk Vučković Attorney at Law - Legal Consultant

Both domestic and foreign companies can register their Branch Offices in Serbia, and to understand how to register a Branch Office of a foreign company in Serbia it is important to follow certain steps and submit certain documents. Also, it is important to stat that in accordance with the Foreign Exchange Law, branches of foreign companies are considered residents and operate through their resident bank accounts in Serbia.

What steps have to be followed to complete this procedure?

First of all, competent body of foreign company must adopt a Decision on forming branch office in Serbia. Depending on the company’s structure this Decision can be adopted by the General Assembly, Manager, Board of Directors, etc.

After this, legal representative of stated foreign company must provide Statement on taking responsibility for all obligations of a branch office. This Statement must be notarized before Public Notary and translated into Serbian language.

What documents are needed to complete this procedure?

Beside above-mentioned Decision and Statement, following documents are needed to successfully complete procedure of registering a Branch Office of a foreign company in Serbia:

  • Registration form (Serbian Business Register Agency);
  • Excerpt from Business Register where company has been registered translated into Serbian;
  • Proof of bank account numbers of foreign company;
  • Proof of paid state fee.

Branch office must have predominant activity which is to be registered and can perform all other allowed activities. Branch office is not a legal entity but in taxation sense has a status of resident (important for a Profit Tax rated at 15% in Serbia).

All stipulations that refer to Limited Liability Company also apply for Branch Offices.

If you need more information on  how to register a Branch Office of a foreign company in Serbia, or you want to register Limited Liability Company or any other form of company contact Asst Office today, and let us guide you through this process and assist you to establish business in Serbia.

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How to Start a Limited Liability Company (LLC) in Serbia

How to Start a Limited Liability Company (LLC) in Serbia
Prof. Dr. Jelena Šogorov Vučković Legal & Banking Consultant

Choose the Appropriate Name for Your Company

The company name must contain the business name, legal form, and place where the head office of the company is located, for example, AsstOffice LLC Novi Sad. Also, when choosing a business name, you should pay attention to whether your business name is identical or similar to the business name of another company.

Therefore, you should make sure that business name you want is available and that it differs from other business names by at least three characters. In case your business name is available, and in accordance with regulation, we suggest that you reserve that business name. By doing so, you will be certain that no one will register another company by that name. The name reservation is valid for 60 days.

Draft Memorandum of Association

There are two different types of Memorandum of Association, which represent the constitutive act of every Company. One is Decision on Establishment of Limited Liability Company, and it is drafted when only one person is the founder of the Company. Another one is Agreement on Establishment of Limited Liability Company, and it is drafted when two or more people stated as founders. When drafting these documents there are obligatory elements, prescribed by the Company Law, which must be included in every Decision or Agreement.

Notarize the Signature(s) of the Founder(s)

It is stipulated by the Company Law that the signature(s) of the founders must be notarized before a public notary. We recommend notarizing at least 4 copies of the constitutive act, one for the public notary, one for the chosen bank, one for Business Registers Agency and one to keep in your files/folders.

Pay Prescribed Share Capital

Before going to Business Registers Agency to submit all the document, you must pay a prescribed share capital for the company, whether monetary or non-monetary. Minimum share capital according to Serbian Company Law is 100,00 RSD, around 0.83 EUR unless a larger amount is stated by the Law for specific business activity. Bank will open a temporary account for this transaction and will issue a Proof of Payment.

Prepare Registration Forms and Submit the Paperwork to Business Registers Agency

Business Register Agency represents government One Stop Shop Registration System. Before submitting all the previously drafted, notarized and prepared documents, together with Proof of Payment, Registration Forms must be filled and state fees must be paid, as well. When you submit all these documents to the Business Register Agency, it takes 3 to 5 days for them to make Decision on Registration of the Company.

Open a Bank Account

Company Formation in Serbia is completed by opening a bank account for a newly registered company. Usually, a permanent bank account is opened at the same bank where you paid prescribed share capital, but it is not obligatory. This means that you can open a temporary bank account for prescribed share capital in one bank, and a temporary company bank account in a different bank.

Choose an Accountant

Although this may not seem like part of the process of company formation and registration, we at AsstOffice want to make sure that all the aspects of your business are satisfied. Therefore, it is our professional opinion that accounting services are an important part of running a successful business and that is why we recommend choosing an accountant during the process of company formation. All of this can be done without you being in Serbia, through Power of Attorney. So, contact us for any additional information.