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.

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.

Serbian Law stipulate very strict rules on who can acquire Serbian citizenship. These rules are stipulated in the Law on the Citizenship of the Republic of Serbia. There are several ways how someone can acquire Serbian citizenship, and ancestry is one of those ways. Provisions regarding this matter are state in the Article 7 to 12 of the stated Law.

Who can acquire Serbian citizenship by ancestry?

As stipulated by the Serbian Law, Serbian citizenship by ancestry can acquire:

1. A child whose parents at the time of her / his birth were citizens of the Republic of Serbia;
2. A child born on the territory of the Republic of Serbia; whose one parent was a citizen of the Republic of Serbia at the time of her / his birth;
3. A child born abroad; whose one of parents was a citizen of the Republic of Serbia at the time of her /his birth, while the other parent is unknown, or citizenship of that parent is unknown, or that parent is stateless;
4. A child whose one of the parents was a citizen of the Republic of Serbia at the time of her / his birth and the other is a foreign citizen, if the parent who is a citizen of the Republic of Serbia registers him by the age of 18 with the competent diplomatic or consular mission of the Republic of Serbia as a citizen of the Republic of Serbia and if that parent applies for registration of the child in the Register of Citizens with the competent authority in the Republic of Serbia;
5. A child born abroad, whose one of the parents was a citizen of the Republic of Serbia at the time of birth, is to become stateless, she / he will acquire Serbian citizenship regardless of the fact that above stated conditions are not fulfilled.

Who can submit Application for the entry in the birth registration?

In case when both or one parent at the moment of birth of the child are citizens of the Republic of Serbia, and the child is born abroad, a Request for entry in the birth registry, where citizenship of the Republic of Serbia is also recorded, is submitted to the competent diplomatic or consular mission of the Republic of Serbia, where the parent that is submitting a Request has resides temporarily.

In cases when both or one parent citizens of the Republic of Serbia, the Applicant must also submit together with the Application:

• An original of the Birth Certificate of a foreign authority issued on an international form, all in accordance with the Paris or Vienna Convention or under a bilateral agreement. If the Birth Certificate is not on an international form but on the form of the country concerned, it must be translated, and a copy must be certified by the competent diplomatic or consular mission of the Republic of Serbia.
• Proof of citizenship of the Republic of Serbia for the parent.

As proof of the citizenship one of the following documents must be submitted:

• A Citizenship Certificate of the Republic of Serbia, not older than 6 months, which contains a clause on the basis and date of entry in the register of Serbian citizens; or
• An Extract from the Register of Citizens kept in the Ministry of the Interior, issued in accordance with the Law, or
• Birth Certificate where, in accordance with the Law, the fact of citizenship of the Republic of Serbia is stated, not older than 6 months, or
• Passport, and
• If the child is born extramarital proof of acknowledgment of paternity.

On the other hand, if a person is of legal age and has become stateless as a child and has not been registered nor she /he applied for registration, the Applicant shall also submit:

• Birth certificate;
• Proof that he or she is stateless (travel document for stateless person).

For all your question regarding this matter, and if you need assistance to acquire Serbian citizenship by Ancestry feel free to contact Asst Office at any time.

Serbia keeps on proving that when it comes down to offering best possible business environment for IT companies, things will be done. Therefore, it is not surprise that Google added Serbia to Merchant Account platform.

What does this mean?

Until now Serbian IT companies had a huge problem with charging for their services and products. After Google added Serbian to Merchant Account platform all companies registered in Serbia, from now on, can charge for their services and products that are available on the Google Play Store worldwide. In the end, this means that Serbia is being recognized as important part of international IT community, and that Serbian legal framework is side by side with world leading IT markets.

Who can benefit from this?

Serbian IT sector, or better said it exports will reach 1.5 billion Euro in 2019. Now, when there is opportunity for access to the worldwide market via Google Play Store, it is too being expected that mobile app developers and mobile app industry in general will benefit the most. Mobile app companies from Serbian will be able to plan sale of their products to smartphone users globally.

In addition to all this, special incentives have been introduced for investing in fields of research, development and creation of intellectual property in Serbia. These incentives stipulate that the profit from the income from intellectual property is taxed at the tax rate of 3%, instead of the 15%, as it was rated before.

All of this, together with the decision that from January 1, 2020, all digital nomads who stay in Serbia for up to 90 days will be tax-exempt, makes Serbia become one of the most competitive countries in these fields.

What are next steps?

Beside all mentioned, Serbia is planning to implement liberal visa policy for employment in Serbia, electronic visa application and special start up visas. By doing so, Serbia will become even closer to all those that want to start their business and live in Serbia.

If case you want to know more about Serbian legal framework regarding company formation, visa application or immigration feel free to contact Asst Office.

There are certain conditions that must be met for foreigners to acquire real estate in Serbia. First there must be reciprocity concerning the acquisition of property rights of the real estate. This means that, both individuals and legal entities, can acquire property right of real estate on the territory of the Serbia, either through legal transaction inter vivos (Sales Contracts, Gift Contract, etc.) and legal transactions mortis causa (by inheritance) only if there is reciprocity.

Acquisition through legal transactions among the living (inter vivos)

Law on Fundamentals of Property Relations (The Law) stipulates that foreigner individuals or legal entities that do business in Republic of Serbia can upon reciprocity acquire property rights of real estate which they need for their business activities. On the other hand, foreigner that does not do business in Serbia can upon reciprocity acquire property rights of real estate on the same conditions as citizens of Serbia.

In addition to this, foreign individual or legal entity cannot acquire agricultural land, as stipulated by the Law on Agricultural lands, unless it is differently stipulated by Stabilization and Association Agreement between the European Community and its Member States and the Republic of Serbia. Same Agreement stipulates that agricultural land means land used for agricultural production (arable land, gardens, orchards, vineyards, meadows, pastures, ponds, reeds and wetlands) and land that can be used for agricultural production.

The Court or other authority before which the question of reciprocity is raised (e.g. the Real Estate Cadastre), if it is not already aware of this, should seek the necessary explanation of reciprocity from the Ministry of Justice. Any other interested person may request clarification on reciprocity, as well.

The question of the kind of reciprocity required for the acquisition of real estate is not regulated by the Law, and its initial premise is that this acquisition does not require the existence of contractual (diplomatic) reciprocity with the foreign country, but rather that the legislation of that country allows the possibility of acquiring real estate for foreigners under conditions not significantly more severe than those stipulated by Serbian law, as well as in practice allowing citizens of Serbia to acquire real estate on the territory of the respective country (factual reciprocity).

The Republic of Serbia has established contractual reciprocity for the acquisition of property rights of the real estate through legal transactions, inter vivos, by individuals with only a small number of countries, based on trade and navigation contracts concluded in the first half of the 20th century.

In some of them reciprocity is explicitly contracted, and with some of them reciprocity exists by applying the Clause of the post privileged nation. These Agreements were signed with United Kingdom, United States, Kingdom of the Netherlands and Japan.

For other countries that Serbia has reciprocity with, but has not been contracted, the Ministry of Justice has, on the basis of the legal regulations of the respective states governing this matter, that is, by exchanging notes, established the existence of reciprocity.

Those countries are: Argentina, Australia, Austria Belize, Belgium, Belarus, Brazil, British Virgin Islands, Bulgaria, Greece Denmark, Dominican Republic, Israel, Iran, Ireland, Japan, Armenia, South Africa, Republic of Kazakhstan, Canada, China, Lebanon, Latvia, Lithuania, Luxembourg, Hungary, Malta, Mexico, Moldova, Germany, Norway, Panama, Peru, Portugal, Russian Federation, Romania, Singapore, Syria, Slovakia, Turkey, Uzbekistan, Ukraine, France, Netherlands, Croatia, Czech Republic Swiss, Confederation, Sweden, United Arab Emirates, Azerbaijan, El Salvador, Cuba, Senegal Yemen, Colombia, Republic of Korea and Sri Lanka.

Acquisition through legal transactions mortis causa

Foreigners may, under conditions of reciprocity, acquire the right of ownership of real estate located in Serbia by inheritance under the same conditions as domestic citizens.

Acquisition of immovable property is governed by a number of countries by bilateral Legal Assistance Treaties containing a national treatment clause, that is, stipulates that nationals of one Contracting Party may inherit property in the territory of the other Contracting Party under the same conditions and to the same extent as nationals.

In this way, contractual (diplomatic) reciprocity is ensured. Such a solution is contained in Legal Aid Agreements, Trade and Navigation Contracts with the following countries: Austria, Belarus, Bosnia and Herzegovina, Bulgaria, United Kingdom, Japan, Hungary, Mongolia, Poland, Russia Federation, Romania, Ukraine, USA, Slovakia, Montenegro, Netherlands, Czech Republic and Slovenia.

Relative to countries where there is no contract reciprocity for the acquisition of property rights by inheritance, for many years the starting point has been that reciprocity need not be determined in relation to each individual country, but rather to assume that each country recognizes the right of inheritance of real estate of our citizens to the evidence to the contrary, which means that foreign nationals may inherit real estate in the Serbia on the basis of assumed factual reciprocity, provided that the interested parties can prove otherwise.

Article 17 of the Law on the Centralized Records of Beneficial Owners (The Law) stipulates that all registered entities, established until 31st December 2018, must record the beneficial owners data in the Central Record of Beneficial Owners at the latest until 31st January 2019.

These subjects, as well as the legal entities established after 31st December 2018, on the basis of Articles of the Law have the obligation to record stated changes, within 15 days from the day of the founding or changes of the ownership structure, organ members and other changes on which basis the conditions of the beneficial owner of the registered subject can be estimated.

What are the consequences of failing to record beneficial owner of a legal entity in Serbia?

The consequences of failing to fulfill the obligation of recording are stipulated by Article 13 and the Article 14 of The Law.

In accordance to the Article 13 of the Law, who, in order to conceal the beneficial owner of a legal entity in Serbia, does not enter into the Central Registry information about the beneficial owner of the registered entity, submits false information about the beneficial owner of the registered entity as true, change or delete the true information about the beneficial owner of the registered entity, shall be punished by imprisonment for a period of time between three months and five years.

As an violation, Article 14 stipulates non-registration of data on the beneficial owner within 15 days from the date of establishment or change of ownership structure, members of the bodies of the registered entity and other changes on the basis of which the conditions for acquiring the property of the beneficial owner of the registered entity and non-possession and the non-preservation of relevant, accurate and up-to-date information and documents on the basis of which the beneficial owner of the registered entity is registered.

Fines for not fulfilling the obligation

For the stated violations, a registered entity shall be fined – a legal entity with a fine of 500.000,00 to 2 million dinars, and a responsible person in legal entity with a fine of 50,000 to 150,000 dinars.

Therefore, if you want to register a company in Serbia bear in mind that you will have these obligations towards Serbian Business Registers Agency. Also, if you already have ownership in Serbian legal entity or you are beneficial owner of a legal entity in Serbia, and you did not fulfill this obligation feel free to contact us and ask for advice or our assistance.

For many outsides of Europe, meaning of Value Added Tax (VAT) is unknown.

In general, VAT is a consumption tax levied and paid on the delivery of goods and services, at all stages of production and trade in goods and services, as well as on the import of goods. Additionally, Value Added Tax is a consumption tax that replaces the existing sales tax on products and services. It is important to understand that at each stage of the production-traffic cycle, a tax is calculated and paid on that part of the value, added at that stage.

Subjects of this taxation in the Republic of Serbia are delivery of goods and provision of services performed for a fee by the taxpayer in the Republic of Serbia within the scope of their business activity and imported goods (entry of goods into the customs territory of the Republic of Serbia).

Taxpayers are entities that perform sale of goods and services or imports goods within the scope of its business activity, as a permanent business activity, for the purpose of earning income, as well as Republic of Serbia and its bodies and special organizations, bodies of territorial autonomy and local self-government, as well as legal entities established for the purpose of carrying out activities within the scope of the state administration bodies are not obliged.

On the other side, tax debtor are taxpayers, a tax proxy appointed by a foreign individual or legal entity who has no headquarters or permanent establishment in the Republic of Serbia, but who carries on the supply of goods and services in the Republic of Serbia.

This type of taxation occurs on the day when traffic of good and/or services are completed, on the day when the payment is done, and on the day of the obligation of paying the customs debt.

In the Republic of Serbia VAT is rated at 20%, but some exemptions are known, and those are stipulated in the Law on Value Added Tax of Republic of Serbia in the Article 23.

Also, special taxation procedures are Stipulated in the previously mentioned Law, and they refer to small taxpayers – sole proprietor and companies whose total year turnover is less than 8.000.000,00 RSD (around 65.000,00 EUR), farmers, travel agencies. Used goods, works of art, collectibles and antiques also fall into the group for special taxation procedures.

If you have any question or doubt about VAT in Republic of Serbia or in other European countries like Slovakia, Hungary, Slovenia, etc. feel free to contact us, and let our team of accounting professionals and business consulting partners provide you with all necessary information.

If you want to register a limited liability company in Slovakia and start your business venture there, you will need to fulfill certain conditions and meet certain criteria.

Business name and business activity

First and foremost, you will need to decide what will be the name of the limited liability company and to find a legal address – business address – for the company. For legal seat – business address – you can find providers of Virtual Office Services or you can find a suitable office and rent it.

Next step is to determine the what type o business activity will your limited liability company perform – object of the business. In case you wish that your company performs more than just one business activity, it is possible, in accordance with Slovak Law, to register few business activities.

Shareholders

Each and every limited liability company must have a least one shareholder. This means that one company can have more than one shareholder, but minimum value of share that each shareholder holds must be at minimum of 750,00 EUR. If a shareholder is individual than he or she must provide copy of ID or passport where name, surname, date and place of birth, citizenship and residency are state. For legal entity to be registered as a shareholder you will need to provide Excerpt from Commercial Register or Business Agency Register where name of the entity, identification number and other relevant information will be stated.

Share capital

Minimum share capital is rated at 5.000,00 EUR, but before submitting Registration Application before Slovak Trade Register, only 2.500,00 EUR of share capital must be deposited. So, it is stipulated that only 50% of the share capital is deposited before registering a limited liability company. In addition to this, Slovak Law stipulate that, within this 50 % of total share capital, 30% of shareholder’s contribution have to be paid.

Other information

Once all these facts are determined, you will need to draft Company’s Articles of Association and other related documents and certify them before Public Notary.

Final steps after completing all of above stated includes, registering for tax income, opening a bank account for legal entity and registering before Social Insurance Company.

For business purposes most important taxes are Personal Income Tax – rated at 19% for wages up to 34.401,74 EUR and 25% for what exceeds that amount; Corporate income Tax – rated at 21%; and Value Added Tax (VAT) – rated at 20%.

If you want to register a company in Slovakia or you need any additional information on this topic, feel free to contact us and let us  assist you.

Although this subject may not be on top of your mind when talking about company formation or immigration, we believe that this subject is important when talking about business, entrepreneurship, and law. It is not that rare to see one company having disputes with another one. Therefore, it is our firm belief here at Asst Office that you will find this information helpful.

In principle, a domestic arbitral award is one rendered in an arbitration seated in Serbia, while a foreign arbitration award is one rendered in an arbitration seated abroad. A domestic arbitration award can be enforced directly in Serbia since it has the force of a final domestic court decision. However, a foreign arbitral award must first be recognized by the competent court in Serbia.

The recognition and enforcement of foreign arbitral awards in Serbia are governed by the Serbian Law on Arbitration. Serbia is also a signatory to the New York Convention on the Recognition and Enforcement of Arbitral Awards (the New York Convention) and the European Convention on International Commercial Arbitration of 1961.

Grounds for refusal of recognition under the Serbian Law on Arbitration correspond to those listed in Article V of the New York Convention, and they are not country-specific. There are two groups of reasons, one which courts examine ex officio and the other which courts examine only at a party’s request. Reciprocity is not a requirement for enforcement; thus, the country of origin should not be a concern from that aspect.

Recognition of a foreign arbitral award can be the subject matter of an independent proceeding, or it can be decided as a provisional/preliminary question in an enforcement proceeding.

• The advantage of an independent proceeding is that once an arbitral award is recognized, it obtains the force of a domestic final court judgment. In other words, it has an effect on everyone and can be enforced in as many enforcement proceedings as necessary to recover the entire amount of the claim. There is no need to repeat the recognition process. The disadvantage is that this proceeding can take a significant amount of time if the appeal is lodged.
• On the other hand, recognition of the foreign arbitral award as a provisional/preliminary question directly in the enforcement procedure can be faster than the independent proceeding. However, if recognition of an arbitral award is decided as a provisional question within the enforcement proceeding, then the recognition is effective only in such enforcement proceeding. In other words, if the lender does not manage to enforce the entire claim in one proceeding, it would have to go through the recognition process again.

If you need any assistance or additional information regarding this matter, feel free to contact us, and let our Legal team provide you with valuable advice.

A Sole Proprietor can transfer her /his business to third party only if conditions stated by the Serbian Company Law and The Law About the Registration Procedure at the Agency for Business Registers. Some of them refer to who can Sole Proprietor transfer his / her business to, and other refer to what steps need to be undertaken so that this procedure can be finished.

When does Sole Proprietor can transfer to third party?

Transfer of Sole Proprietors business is possible in two cases:

1. Between spouses;
2. From parents to children.

In other cases, the transfer of an entrepreneurial action is not possible, nor is it allowed.

What steps need to be undertaken for this procedure?

To make this transfer possible, it is necessary:

• Make an Agreement on the Allocation of Life Assets;
• Verify the contract with the Notary;
• Submit an application for verification of data in the Business Registers Agency;
• Pay a fee to the Business Registers Agency.

What is important to emphasize is that during the transfer of the Sole Proprietors business, the name change also occurs, so it is necessary to create a new stamp at the end of the procedure. Also, new Sole Proprietor can decide to operate without the stamp. The registration number and Tax Identification Number will not change on this occasion, and the number received when previous Sole Proprietor register will be transferred as well.

An individual who took over the business and became Sole Proprietor is responsible for all previously undertaken commitments of a previous Sole Proprietor action with all her/his property, including the property she/he acquires in connection with the performance of his business. 

If you need advice or assistance regarding the transfer of a Sole Proprietors business or you wish to register as Sole Proprietor, we are at your service.