Work, in addition to employment, includes the representation of a company on the basis of entry in the register of Serbian Business Register Agency, as well as the performance of management powers and management tasks in accordance with the law governing the status of companies. There many situations where contribution for legal representatives of Serbian company must be paid, and these are just few of them.
FOREIGN CITIZENS who are the Founders of a company
Foreign citizen – natural person – who is not a resident of the Republic of Serbia, can be a Founder and / or a Member of a company in Serbia. Which regulations will apply to the determination and payment of compulsory social security contributions for the Founder and / or a Member of a company depends on the circumstances of whether a contract has been concluded with the state of residence of Founder and/ or Member in the field of social security.
If a bilateral agreement is concluded, there is no obligation for that person to pay social security contributions under the regulations of the Republic of Serbia if two cumulative conditions are met:
- If the natural person submits a certificate that s/he is a resident of the country with which the social security contract has been signed, certified by the competent authority of that state, and
- If the natural person submits a certificate that s/he is compulsorily insured in the State of residence (Contracting State), certified by the competent authority of that State.
Failure to provide the above evidence, as well as in the case where no bilateral social security contract is concluded, the regulations of the Republic of Serbia in the field of compulsory social security shall apply.
Founders who do NOT work in their company and are NOT registered to represent the company but are in a working relationship in their company regarding jobs that are not representation
Founder or a Member of a company who is employed by his company is obligatory insured on the basis of employment as an employee. This person may perform any business activity in that company, as well as any other employee, except to represent the business of the company, due to the fact that for these jobs’ s/he is not registered in the Serbian Business Register Agency (it is understood that there is another person registered to represent the company).
Founders and / or Members of a company who have established an employment relationship in their company are entitled to earnings, reimbursement and other income based on the employment relationship in accordance with the law governing employment, a general act with the employer and a contract of employment. This person has all the rights and obligations on the basis of employment like any other employee.
Income Tax is calculated and paid at the rate of 10%.
Founders and / or Members of a company are entitled to a dividend or a share in the profits of the company in accordance with the general act of the company (which is taxed as capital income at the rate of 15%).
Founders who WORK in their company and are REGISTERED to represent the company but are NOT in employment with their company or with another employer
For individuals who are Founders or Members of a company, and are registered to represent that company in which they do not have an employment relationship (and are not employed by another employer), the contribution base is at least the lowest monthly contribution basis.
For these persons, as Founders or Members of a company, all three contributions are calculated and paid as follows:
1. For compulsory pension and disability insurance – 26%;
2. For compulsory health insurance – 10.3%;
3. For unemployment insurance – 1.5%.
The personal income tax is NOT calculated because the individual does not receive the contractual remuneration for his / her employment as a Founder or a Member of a company.
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