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.

Working time in Serbia is defined as the period of time during which the employee is obliged, i.e. available to perform tasks according to the orders of the employer, at the place where the work is to be performed. It is also possible that the employee and the employer agree that one period of working time within the agreed working hours shall be performed by the employee from home.

What types of employment there are in Serbia?

There are two types of employment in Serbia: full time and part time. The standard for full time employment is 40 hours per week, as stipulated by Labour Law. Employer can determine by General Act that full time work is shorter than 40 hours, but not shorter than 36 hours per week. Employee that works shorter than 40 hours per week still has all employments right as if he is working 40 hours per week.

On the other side, part time employment is referred as working shorter than stated 40 hours, or in mentioned situations 36 hours, per week.

Additionally, employee who works in particularly difficult, arduous and unhealthy jobs, that are determined by Law or General Act, on which despite the implementation of appropriate safety and health measures, personal protective equipment and or other equipment has an increased adverse effect on health of the employee – shortening of working time is proportional to the adverse effect of working conditions on the health and working capacity of the employee, and up to a maximum of 10 hours per week (jobs with increased risk).

Working time schedule and redistribution of working hours

As a rule, a working week lasts five working days, where one working day last for 8 hours. The employer with whom the work is performed in shifts, at night or when the nature of the work and the organization of work requires it – can organize the working week and working hours in another way.

The employer may redistribute working hours when required by the nature of the business, the organization of work, better use of means of work, the more rational use of working time and the execution of certain work within the set deadlines. It is important to know that redistribution of working time is not considered as overtime.

Night work and work in shifts

Work performed between 10 pm and 6 am the following day is considered night work. For an employee who works at night for at least three hours each working day or one third full-time during one working week, employer shall be obliged to ensure that work is carried out during the day if, in the opinion of the competent health authority, such work would lead to a deterioration of his health condition.

Shift work is the organization of work with an employer according to which employees in the same jobs are shifted according to a fixed schedule, whereby shift shifts can be continuous or intermittent for a specified period of days or weeks.

All of this is stipulated by Labour Contract between employer and employee. That is why you should make sure that you do everything in accordance with Labour Law, and check with legal consultant all aspects of Contract with employees.

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:

1. 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
2. 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.

If you need trustworthy associates with experience and knowledge regarding contributions for legal representatives of Serbian Company contact Asst Office.

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.