There are a lot of acts and documents that one company will draft, write, sign and distribute. While some will be related to cooperation with Clients, Partners, Suppliers or Distributors, others will be concluded with employees, office landlords or banks.

The question is what acts and documents Serbian company has to keep permanently, who has access to company’s acts and documents, who has right to be informed with the content of those acts and documents and when can that right be denied?

Obligation to keep acts and documents

Serbian company is obliged to keep the following acts and documents:

• The Founding Act;
• Decision on registration of incorporation;
• General Acts of the company;
• Minutes of the sessions of the General Assembly and Decisions made by the General Assembly;
• Act on the formation of each branch office or other organizational part of the company;
• Documents proving the ownership and other property related rights of the company;
• Minutes of meetings of the Supervisory Board, if the management of the company is two-tier;
• Reports of the Director and the Supervisory Board of the company, if the management of the company is two-tier;
• Records of the addresses of Directors and Members of the Supervisory Board;
• Records of the addresses of Members of the company;
• Contracts concluded by Directors, or Members of the Supervisory Board if the management of the company is two-tier and Members of the company, or related persons with the company.

All of the mentioned acts and documents must be stored at headquarters or at another place known and accessible to all Members of company.

Who has right to be informed with the content of those acts and documents and when can that right be denied?

At written request, the Director is obliged to make available all previously mentioned acts and documents, the Financial Statements of the company, as well as other documents related to the business operations of the company or to the exercise of the rights of Members of the company, to each Member of the company, as well as to the previous Members, for the purpose of inspecting and copying at his own expense, during working hours.

Additionally, the Director is obliged to inform every Member of the company without delay about the relevant facts related to the company’s operations or the exercise of the rights of the Members of the company. Also, each Member of the company has right to request in written that Director within eight days from the day of receipt of the request, at the expense of the Member send him/her a copy of every decision made by the assembly.

Denial of the right of access to company acts and documents and of the right to information

In only two cases can Director deny stated right to the Member of the company, one being when there is a justifiable fear that this right would be exercised for purposes contrary to the interests of company, or for purposes that are not related to membership of the company. Second case is if significant damage could be done to the company or its affiliate.

To make sure that your company operates in accordance with law we would recommend to contact experienced legal and business consultant and ask for their evaluation and professional opinion.

The management of a Serbian company can be organized as one-tier or two-tier management. In the case of one-tier management, the organs of a company are the General Assembly and one or more Directors. On the other hand, in the case of two-tier management, the organs of a company are the General Assembly, the Supervisory Board and one or more Directors.

The General Assembly

The Assembly is composed of all members of the company. Unless otherwise provided in the Memorandum of Association, each member of the company has the right to vote in the General Assembly in proportion to the share, but that act cannot provide that the member of the company has no vote.

Its competence is very wide, and it includes making changes of the Founding Act, supervision the work of Directors and adopting Directors reports, if the management of the company is one-tier, election and dismissal members of the Supervisory Board and determines remuneration for their work, if the management of the company is bicameral. The General Assembly sessions may be regular and extraordinary, and they are convened by the Director, if the management of the company is one-tier or by Supervisory Board, if the management of the company is two-tier.

Directors

The company has one or more Directors who are legal representatives of the company. The number of Directors is determined by the Founding Act or by the Decision of the General Assembly. If the number of Directors is not determined by the Founding Act or by the Decision of the General Assembly, it is considered that the company has one Director.

The Director represents the company towards third parties in accordance with the Founding Act, the Decisions of the General Assembly and the instructions of the Supervisory Board, if the management of the company is two-tier. If the company has more than one Director, all Directors represent the company jointly, unless otherwise stipulated by the Founding Act or the Decision of the General Assembly of the company.

The director is entitled to remuneration for his work and may also be entitled to incentives through the allocation of shares.

The Supervisory Board

A member of the Supervisory Board must meet the conditions prescribed by the Company Law, such as to has business capacity and must not be employed in the company. Determining the business strategy of the company, establishment of the Company’s accounting policies and risk management policies and deciding on initiating the procedure and giving Power of Attorney to represent the company in dispute with the director are just some of the tasks that Supervisory Board in obliged to cope with.

If you are not sure whether to organize company as one-tier or two-tier it would be good to speak to legal consultant. Also, if you know how you want to organize but you need help to register a company experienced legal and business consultants can help you to set up business on firm grounds.

A Joint Stock Company is a company whose share capital is divided into shares that have one or more shareholders who are not responsible for the company’s liabilities. Consequently, a Joint Stock Company is responsible for its liabilities with all its assets. Beside this general information there are many other that are important and have to be taken into account when we are answering on the question how to register a Joint Stock Company in Serbia.

What documents are needed to complete this procedure?

List of documents that are needed to complete this procedure is quite long one. Therefore, here we will just mention them, and we will not go through every document. Having said that, the list of needed documents is as follows:

1. Registration Application for the establishment of legal entities and other entities and entry in the unique register of taxpayers – joint stock company,
2. Founding Act of the Company with certified signatures of members of the Company,
3. Memorandum of Association of the Company signed by the members of the Company,
4. Credit Institution’s Confirmation of the paid-in shares in cash, or the valuation of an authorized non-cash value appraiser or a certificate from the competent authority of the non-cash value assessment in accordance with the law,
5. Several different Decisions, for all facts not stipulated by the Founding Act,
6. Proof of payment of the state fee.

Shareholders who are founding a Joint Stock Company must sign the Founding Act, and their signatures are certified in accordance with the law governing the certification of signatures before the Public Notary. The founding shareholders also sign the first Memorandum of Association.

What is the minimum share capital of a Joint Stock Company in Serbia?

Subscribed shares that are paid in cash in accordance with the founding act shall be paid prior to the registration of the establishment in a temporary account with a commercial bank in the Republic of Serbia. Prior to the registration of the company, the shareholders who set up the company are obliged to pay or deposit deposits representing at least 25% of the share capital, whereby the paid-up amount of the cash part of the share capital may not be lower than the amount of the minimum share capital amounting to 3.000.000,00 RSD ( around 25.500,00 EUR).

What does the Memorandum of Association have to stipulate?

The Memorandum of Association of a Joint Stock Company contain in particular:

1. Business name and registered office of the company,
2. Predominant activity of the company,
3. Information on the amount of subscribed and paid-up share capital, as well as data on the number and total nominal value of authorized shares, if any,
4. Essential elements of the issued shares of each type and class in accordance with the law governing the capital market, and in the case of shares that do not have the nominal value and the amount of the share capital for which they have been issued, or accounting value, including any obligations, restrictions and privileges related to each class of actions,
5. Types and classes of actions,
6. Special conditions for the transfer of shares,
7. The procedure for convening a General Assembly,
8. Determining the organs of the company and their scope, the number of their members, regulating in more detail the manner of appointment and recall of these members, as well as the decision-making methods of those bodies.
9. Other information in accordance with the Company Law or other competent Law.

If you need any additional information on how to register a Joint-Stock Company in Serbia, or you wish to know more on this topic in general, feel free to contact our team.

When registering a business, especially when registering Limited Liability Company or Joint Stock Company, the share capital is one of the most important parts of the process. This is also true when we talk about the share capital of the Serbian company. Due to complexity here we will resent basic information regarding share capital for Serbian Limited Liability Company.

What is minimum share capital for Limited Liability Company in Serbia?

The minimum share capital of a company is at least 100,00 RSD (around 0.87 EUR), unless a special law provides for a larger amount of share capital for companies performing certain activities. The members of the company are obliged to pay the registered founding capital within 5 years from the date of registration of the Founding Act. This means that you can register a company without previously paying share capital.

How can share capital be increased?

There are 5 different grounds on which the share capital of the Serbian Company can be increased:

• new contributions of existing members or members joining the company;
• converting reserves or profit of the company into share capital;
• converting of claims from the company into share capital;
• status changes that result in an increase in share capital;
• conversion of additional payments into share capital.

How can share capital of the Serbian Company be decreased?

The share capital of a limited liability company may be reduced, but not below the minimum share capital in following situations:

• to cover losses of the company;
• to create or increase the Company’s reserves to cover future losses or to increase its share capital from the Company’s net assets;
• in the cases referred to in Article 46, paragraph 3 and Art. 155 (withdrawal and cancellation of shares) and 159 (disposing of own share) of Company Law;
• in case of cancellation of the reserved own share.

The share capital of a company is considered to be a decreased on the day of registration in the Register of Business Entities.

What documents you need to submit depend on the legal ground on which share capital is being increased or decreased.

If you want to know more about how to increase or decrease share capital in Serbian company, what documents are needed to complete company formation process, what are state fees and how long procedures last, contact Asst Office and we will provide you with all necessary information.

The Serbian government has invested around $79 million in technical infrastructure to nurture start-ups, including initiatives like free work spaces and a focus on tech in universities. This, as well as the fact that export of ICT services of Serbia is worth more than 1.4 billion EUR and that it represents nearly 15% of Serbian GDP, shows that there are many reasons to incorporate an IT company in Serbia. Here we will mention just few of them.

1. Well educated and skilled employees

To begin, it is important to say that at every state University there is Faculty of Technical Sciences, where those from University of Novi Sad and Belgrade are ranked at Shanghai Ranking Lists. Beside knowledge of numerous programming languages, Serbian programmers are quite fluent in English. Also, it is not that uncommon that some of them speak third language, as well. Also, the fact that Serbia is ranked in top 5 countries in the world when it comes to Global Ecosystem for Affordable Talents and Activation Ecosystem for Blockchain. In addition to all of this, Novi Sad is considered to be capitol of IT sector in this region.

2. Favourable Taxes

To be honest, apart from having skilled employees, tax regime represents one of the most important parts when expending business to new market. Serbia has low corporate income tax rate for Tech start-ups. These start-ups enjoy stimulative Research and Development deduction and intellectual property box regime, also known as innovation box or IP box, tax regime rated at 3%. This means that star-ups pay very little for corporate income tax.

3. Developed Market

We firmly believe that if there is healthy competition everyone can benefit from that. Therefore, that Serbian has really developed IT market says a lot about opportunities that this country offers. We already mentioned skilled workforce and favourable taxes, being most important, but fact that many companies already have a strong presence at Serbian market tells a story of success of IT sector in Serbia.

4. Price / quality ratio

Maybe you already read that price of work is low in Serbia, and that prices in general are lower than in other countries in Europe. But what is more important is what you will get for your money. Beside affordable yet highly skilled workforce that you will most certainly find in Serbia, you will also find great office spaces and excellent infrastructure at lower price than in other countries in the region.

5. Future of IT in Serbia

As stated above, Serbian government is doing everything in their power to assure bright future for IT companies in Serbia. In order to secure constant influx of IT experts, computer science and informatics are as a compulsory subject in primary schools. Secondly, number of specialized IT departments in high schools is growing rapidly. Finals step is reform of higher education in the area of IT and expanding the educational capacity of future top experts in this field.

These would be 5 main reasons to incorporate an IT company in Serbia. In case that you have questions about how to register a company in Serbia, employment and labour law in Serbia and tax regime, contact our tax, legal and HR experts.

The right to free access to the labor market in Serbia, i.e. employment, self-employment and practice the right in case of unemployment, unless otherwise stipulated by an international treaty binding to the Republic, shall have:

1. EU citizens;
2. Members of the family of citizens referred to under 1., who are not EU nationals and who are granted temporary residence or family residence in those countries proving their right to free access to the labor market.

Who is considered as a family member?

Family members of EU citizens are:

1. Spouses married or extramarital of EU citizens, in accordance with the law;
2. Direct descendants of EU citizens under 21 years of age or direct descendants of their spouse, whether married or extramarital, under 21 years of age;
3. Adopted children under 21 years of age or pastors of EU citizens or their spouse, whether married or extramarital, under 21 years of age;
4. Natural persons stated under 2. and 3. of this paragraph older than 21 years of age who are unable to support themselves on their own, i.e. who is obliged to support an EU citizen or his or her spouse in marriage or extramarital;
5. The direct ancestors of EU citizens or the direct ancestors of their spouse, whether married or extramarital, which the EU citizen or his or her spouse is obliged to support.

Natural persons who have the right to free access to the labor market do not need a work permit within the meaning of the provisions of Law on Employment of Foreigners.

Can foreign employer direct non-EU foreigner to work in Serbia?

A foreign employer domiciled in a Member State of the European Union, the European Economic Area or the Swiss Confederation may send a non-EU foreigner to work in Serbia without a work permit within the meaning of the Serbian Law, unless otherwise provided by an International Treaty binding for the Serbia.

The foreign employer may direct the foreigner referred to in previous paragraph of this Article provided that he has:

1. Contract concluded with the employer or the end user of the services, which must include the place and deadline for performing the work;
2. Concluded an employment contract with the foreigner referred to in previous paragraph this Article in accordance with the law in force in the Member State in which the foreign employer is established;
3. The Act on Reference to Temporary Work in the Republic of Serbia, which determines the manner of exercising rights and obligations from work, as well as the manner of accommodation and food during the stay and work in the Republic.

The employment of a foreigner is realized on condition that he / she has a long-stay visa on the basis of employment, a temporary residence permit or permanent residence permit and a work permit, unless otherwise stipulated by Serbian Law.

Work permits for foreign workers

A work permit, shall be considered an Act on which grounds a foreigner may be employed or self-employed in Serbia.

A work permit may be issued as:

• Personal Work Permit; or
• Work Permit.

Only one type of work permit is issued for the same time period.

For all additional information regarding employment of a foreigner in Serbian, temporary and permanent residence permits, and work permits contact Asst Office, and our team will provide you with all necessary information.

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!