Establishment of a Company in the Republic of Serbia

In the last 10 years, the Republic of Serbia has become an interesting country for international companies that establish their companies and invest capital. This is supported by the fact that the Republic of Serbia took 1st place on the FDI 2019 European list, based on the criteria of greenfield investments in relation to the size of the economy. The largest growth in the establishment of companies is recorded in the IT sector. Various international companies in the Republic of Serbia are motivated to join and expand their business. Some of the largest foreign investors in the Republic of Serbia come from Germany, Italy, the USA, Russia, China.

Considering that Serbia In Serbia, the number of Chinese companies is significantly increasing, such as Serbia Zijin Mining, HBIS GROUP Serbia Iron & Steel, SERBIA ZIJIN COPPER and many others. Great support to Chinese companies in Serbia is certainly provided by the Chamber of Chinese Companies in Serbia, as well as the Bank of China, which has been present in Serbia since 2016. In the last 2 years, the number of established business entities whose owners are Russian citizens has increased, primarily due to the easier obtaining of temporary residence and work permits. When considering opening a company in Serbia, one of the decisions to be made is which legal form of company to choose. The Law on Companies in Serbia prescribes the following legal forms:

General partnership (OD) – a company of two or more partners who are unlimitedly jointly and severally liable with their entire property for the obligations of the company. Unless otherwise stipulated in the memorandum of association, the company’s profit is distributed among the partners in equal parts, and the partners contribute contributions of equal value to the company. Regarding the regular business of the company, each partner has the authority to perform actions. A partner is entitled to compensation from the company for all expenses he had in connection with the business of the partnership, and which were necessary given the circumstances of the case. It is also possible for a new partner to join the company after its establishment. In that case, the new partner would be liable for the company’s obligations as an existing partner, including obligations assumed before his accession to the company.

Limited partnership (KD) – A limited partnership is a company that has at least two members, of whom at least one is unlimitedly jointly and severally liable for the company’s obligations (general partner), and at least one is liable limited to the amount of his unpaid or unentered contribution (limited partner). General partners have the status of the aforementioned partners of a general partnership. Limited partners and general partners participate in the distribution of profit and coverage of the company’s loss in proportion to their shares in the company. General partners manage the company’s business and represent it, and the limited partner can only object to the undertaking of actions or the conclusion of transactions by the general partners that are outside the regular business of the company, in which case the general partner cannot undertake that action or conclude that transaction. A procuration can be given to the limited partner – a business power of attorney by which the company authorizes one or more natural persons (procurator) to conclude legal transactions and undertake other legal actions in its name and for its account.

Joint stock company (AD) – For certain activities, the establishment of a business entity in the form of a joint stock company is exclusively foreseen (e.g. banks). A joint stock company is a company whose share capital is divided into shares held by one or more shareholders who are not liable for the company’s obligations (except in certain cases provided for by the Law on Companies of Serbia). The company is liable for its obligations with its entire assets. The minimum share capital of a joint stock company must amount to RSD 3,000,000.00. There are 2 management models – one-tier (Assembly and one or more Directors or Board of Directors) and two-tier (Assembly, Supervisory Board and one or more Executive Directors or Executive Board). The Board of Directors determines the business strategy, manages the company’s business, performs internal supervision over the company’s business, etc. In both cases, the Company’s Assembly consists of all shareholders and decides on changes to the rights or privileges of any class of shares, acquisition and disposal of assets of great value, distribution of profits, etc. Executive directors manage the company’s business and are the legal representatives of the company, while the consent of the Supervisory Board is required for the acquisition, disposal and encumbrance of shares and stocks that the company owns in other legal entities; acquisition, disposal and encumbrance of real estate; taking out loans, i.e. taking and giving loans; etc.

How much does it cost to open a company in Serbia?
The fee for opening a company in Serbia that is paid to the Business Registers Agency (APR) amounts to RSD 6,500.00.

Entrepreneur in Serbia
It is also possible to register an entrepreneur, who is a business-capable natural person who performs an activity in order to generate income. The entrepreneur is liable for all obligations arising in connection with the performance of his activity with his entire property, and this property includes the property he acquires in connection with the performance of the activity. The entrepreneur can entrust the management to a business-capable natural person – a manager. Registration of an entrepreneur is a frequently chosen option, given that only an identity card is required for registration. The fee to the Business Registers Agency (APR) for registering an entrepreneur in Serbia is RSD 1,600.00. Considering that opening a DOO company in Serbia and registering an entrepreneur are the most frequently chosen options, let’s briefly compare them:

DOO	ENTREPRENEUR
Member’s liability for the company’s obligations: NO	Member’s liability for the company’s obligations: YES
Documentation required for registration: – Memorandum of association with certified signatures – Personal documents	Documentation required for registration: – Personal document
Establishment fee payable to the Agency for business registers: 6,500.00 RSD	Establishment fee payable to the Agency for business registers: 1,600.00 RSD
Registration duration: 5 working days	Registration duration: 5 working days
Obligation of electronic establishment: YES (From May 2023, the obligation is prescribed electronic submission of documentation I establishment of companies)	Obligation of electronic establishment: NO (The obligation of electronic establishment is provided only for companies and not for for entrepreneurs)

Opening an IT company in Serbia
Many IT companies in Serbia decide to open a company in Serbia in the legal form of DOO. VEGA IT, QUANTOX TECHNOLOGY, DEVTECH, NORDEUS – all are limited liability companies. Probably the fact that the members of the company are not liable for the obligations of the company makes this legal form so popular. Opening an IT company in Serbia does not take longer than 5 working days, and can be done remotely.

Opening a company in Serbia remotely – do you need an Apostille?
If opening a company in Serbia remotely is the most convenient option for you, you should authorize someone in Serbia, usually a lawyer, to establish a company in your name. In that case, you will need a special power of attorney. Whether that special power of attorney should be subject to “full legalization”, whether only an Apostille is required, or even an Apostille is not required, depends on which country the document is from. An Apostille is required for public documents from Hong Kong, Germany, India, Singapore, UK, USA,
etc. An Apostille is not required for public documents from Austria, France, Greece, Hungary, the Russian Federation, etc. In that case, you will only have to certify your signature on a special power of attorney, in the office of a Notary Public in your country. After that, you will send the special power of attorney to an authorized person in Serbia, usually a lawyer for opening a company in Serbia, who will do everything necessary in your name.

Lawyer for opening a company in Serbia
Opening a company in Serbia is an important business decision for every individual, and if you are not familiar with the procedure for opening a company in Serbia, it is advisable to hire a lawyer for opening a company in Serbia. If you have any questions, such as how to register a company in Serbia, or how much it costs to open a company in Serbia, you can contact our law office via the contact page or email address: kancelarija@deliclawoffice.rs