Doing business in Serbia: Business Formation

Notarize the memorandum of association

Agency: Public Notary

The founders shall notarize 3 copies of agreement on foundation of the company before the Public Notary and provide Serbian Business Registers Agency (hereinafter the “SBRA”) with one notarized copy, among other documents, according to the Article 10 of the new Rulebook on the Contents of the Register of Business Entities and the Documentation Needed for Registration (“The Official Gazette of the Republic of Serbia”, no. 6/2012).

The notary fees are regulated by the Tariff for Public Notaries (Javnobeležnička tarifa, “Official Gazette of RS”, No. 91/2014, 103/2014, 138/2014, 12/2016, and 17/2017), which provides for a “points”-based amount of the fees. According to Art. 10, the value of one point is RSD 150 without VAT. According to Tariff 8 of the Art. 21, the notary fee for verification of signatures on a private document by which the notary confirms that the parties in the legal transaction or the parties which make a legal statement personally signed or personally placed a fingerprint, is 2 points per signature and per copy of a notary document. Therefore, notary fee for certification of one signature on the MoA is RSD 300 (i.e., 2 points * 150 RSD/per point) without VAT. Provided that it is assumed that 5 founders are creating an LLC, the applicable fee for the case study company is RSD 1,500 (i.e., RSD 300 * 5 signatures) per copy.

Two additional copies of the MoA need to be certified. This can be done by either “original” certification (i.e., RSD 300 per signature per copy), or by certifying the copy of the original MoA, which is done at the rate of 2 points (i.e., RSD 300 without VAT, based on the Tariff 10 of the Art. 21) per page.

Time and cost: 1 day, RSD 300 per signature per copy (without VAT)

Open a bank account and pay registration fees

Agency: Bank

The registration fees must be paid at a commercial bank. The proof of payment is required at the moment of registration with the Serbian Business Registration Agency.

The Company Law does not provide for the minimum amount of the company’s initial capital that needs to be paid-in until the company’s registration with the SBRA. However, in case the Foundation Act prescribes that the relevant amount of the capital contribution is going to be paid until the company’s registration, the temporary bank account should be opened with the commercial bank. Otherwise, once the company is registered with the SBRA, the capital contribution will be paid-in directly to the company’s permanent bank account.

Once the company is registered with the SBRA, the permanent bank account should be opened with the commercial bank. In case the temporary bank account was opened before the company’s registration with the SBRA, the funds will be transferred to the permanent bank account.

Otherwise, once the company is registered with the SBRA, the capital contribution will be paid-in directly to the company’s permanent bank account.

In order to open the permanent bank account, the bank is generally provided with the following documents:

Request for opening of the permanent bank account (original);
Specimen signatures card (original);
Contract on opening and maintaining of a RSD/foreign currency account (original);
The company’s excerpt from the SBRA, not older than three months (original or certified copy);
Certificate on the tax identification number, issued by the Tax Authority (copy);
Certified signatures of the persons authorized to dispose with the funds (original or certified copy); and
Passport or ID card of the persons authorized to dispose with the funds (copy).

In case an authorized person opens the permanent bank account, on behalf of the company, the bank should also be provided with (i) a Power of Attorney (original or certified copy), and (i) a copy of passport or ID card of the authorized person.

The Law on Prevention of Money Laundering and Financing of Terrorism (Zakon o sprečavanju pranja novca i finansiranja terorizma, “Official Gazette of the Republic of Serbia”, Nos. 20/2009, 72/2009, 91/2010 and 139/2014) provides that in order to open the permanent bank account, the bank must verify the company’s ownership structure. Therefore, the bank must be provided with the registry excerpt for each legal entity in the company’s ownership chain, holding directly or indirectly 25% or more of the ownership interest. This procedure shall be repeatedly carried out down to the ultimate owners, i.e. private individuals who hold directly or indirectly 25% or more of the ownership interest.

Time and cost: 1 day (simultaneous with previous procedure), RSD 4,900 (administrative fee for foundation of a limited liability company) + RSD 1,000 (fee for registration and publication of the Incorporation Act)

Apply and obtain the registration certificate, tax identification number, pension fund (PIO Fund)and Health Fund certificates, certify the signatures (three copies) for opening bank account

Agency: Serbian Business Registers Agency (SBRA)

According to the Rulebook on Issuing of Tax Identification Number for Legal Entities, Entrepreneurs and Other Entities Registered with the Business Registers Agency (Pravilnik o dodeli poreskog identifikacionog broja pravnim licima, preduzetnicima i drugim subjektima za čiju je registraciju nadležna Agencija za privredne registre, “Official Gazette of the Republic of Serbia”, no.32/2009, 70/2010, 6/2012 and 11/2016), the Serbian Business Registers Agency provides the company with the certificate on the tax identification number (issued by the Tax Authority) together with the certificate on registration of the company with the Serbian Business Registers Agency.

Legal entities, sole traders and other entities when apply for incorporation with SBRA submit only JRPPS form through which they can simultaneously apply also for flat-rate taxation or VAT with Tax authority. Legal entities, sole traders and other entities are no longer required to submit additional documents to the local Tax authority.

Upon receiving the required authorization in the application for the company’s registration, the Serbian Business Registers Agency:

Forwards to the competent Pension and Disability Insurance Fund the application for insurance, on behalf of the founders who state in their application that they will not be employed in the company, and an application for registration of commencement of the company’s business activity; and
Forwards to the Republic Health Insurance Fund the necessary data for registration of a payer of health insurance. If the requirements for registration of a payer of health insurance with the Republic Health Insurance Fund are not fulfilled, the company will be registered with the Serbian Business Registers Agency and referred to the Republic Health Insurance Fund for the registration as a payer of health insurance.

In order to register the company with the SBRA, the following documents need to be submitted:

Application form (can be downloaded free of charge from the official web page of the SBRA www.apr.gov.rs);
Foundation Act with certified signatures of the company’s founders (shareholders);
Proof of identity of the company’s founders (if the founder is natural person: for Serbian nationals – photocopy of personal ID card, and for foreign nationals – photocopy of passport; if the founder is legal entity: original extract from the commercial registry);
Decision on Appointment of Representatives (if the representatives are not specified in the Foundation Act);
Bank confirmation of the payment of the contribution in cash if the contribution is payable prior to incorporation, i.e., founders’ agreement on the appraisal of the value of contribution in kind if the contribution is made to the company prior to incorporation;
Proof of payment of the registration fee; and
Power of Attorney (if an attorney files the registration).

Documents in a foreign language must be accompanied by their translation into Serbian, certified by a certified court interpreter.

Under the Law on Procedure of Registration with the Business Registers Agency (Zakon o postupku registracije u Agenciji za privredne registre, “Official Gazette of the Republic of Serbia”, No. 99/2011), the Serbian Business Registers Agency must issue its decision on registration within 5 (five) days from the date of receipt of the application for registration. Usually the Agency brings decree on the next business day, and in more complicated cases within 3 days. The company’s registration is published on the official web-page of the Serbian Business Registers Agency.

The amendments of the Companies Act, which were adopted in June of 2018 and became effective in October of 2018, allow for digital signing of the memorandum of association, in which case a registration of the new business can be made electronically. However, online registration is currently available only for single-shareholder companies (either individual or a domestic legal entity).

According to the Serbia Law on Chambers of Commerce, all companies registered with the Serbian commercial registry (i.e. Serbian Business Registers Agency) are automatically registered with the Serbian Chamber of Commerce as its members as of the date of their registration with the Serbian commercial registry. There is no separate registration form or proceeding. In the first year after the registration with the commercial register, the Chamber of Commerce does not charge the membership fee. Afterwards, the membership fee is determined by the General Assembly of the Chamber of Commerce on annual basis. It depends on the size of the legal entity and its revenue.

Time and cost: 2 days, no charge

Make stamp and seal

Agency: Sealmaker

Although use of the stamp is not mandatory under the new Companies Act, a majority of the companies in Serbia are still using the stamps in their business operations in order to have additional level of security in the legal actions. In addition, contrary to the provisions of the new law, some authorities still require the stamps to be affixed on business letters/documents of the companies. Although the National Bank of Serbia adopted changes to legislation according to which seal is not mandatory for opening bank accounts and in bank transactions, some commercial banks have not implemented these changes in practice yet and continue asking for a seal due to the bank’s templates of documentation.

Time and cost: 1 day, RSD 1,660 – RSD 2,800

Register the employment contracts with the Employment Organization/Fund

Agency: Employment organization/Fund – Central Registry of Compulsory Social Insurance (CROSO)

The new and old forms M1 are replaced by the form M, which includes employee’s application for registration with social insurance, health care insurance and insurance against unemployment (application may be downloaded online from the website http://www.pio.rs). Starting from January 2018, the registration of employee must be performed before employee’s commence work.

Companies register employees online at www.crosco.gov.rs.

Pursuant to the Regulation on Unique Application for Mandatory Social Insurance (Uredba o sadržini, obrascu i načinu podnošenja jedinstvene prijave na obavezno socijalno osiguranje, jedinstvenim metodološkim principima i jedinstvenom kodeksu šifara za unos podataka u jedinstvenu bazu centralnog registra obaveznog socijalnog osiguranja, “Official Gazette of the Republic of Serbia”, Nos. 54/2010 and 124/2012), which is applicable as of 1 October 2010, the company, as an employer, is obligated to submit the following documents for registration of each employee either to the Republic Health Insurance Fund or Pension and Disability Insurance Fund:

Unique application form M (which can be downloaded free of charge from the official web-page of the Republic Health Insurance Fund www.rzzo.rs);
Employment contract;
ID card; and
Old medical care booklet (if applicable).

Work booklet is not being issued as of January 01, 2016. Therefore, employees who has been employed before this date have work booklet and can use the same as the evidence of their previous work experience. However, employees who are being employed after January 01, 2016 do not have work booklet. This documents is not necessary for registration of the employment contracts with relevant authority.

In addition, under the Law on Employment and Insurance in Case of Unemployment (Zakon o zapošljavanju i osiguranju za slučaj nezaposlenosti, “Official Gazette of the Republic of Serbia”, Nos. 36/2009 and 88/2010), the employer is obligated to submit application on vacancy for working place to the National Employment Office.

Time and cost: Less than 1 day (online procedure), no charge

Obtain electronic certificate

Agency: Chamber of Commerce

The electronic certificate is a prerequisite for the online submission of the information on company’s beneficial owners with the Serbian Business Registers Agency.

The electronic certificate may be obtained from any of the following Serbian authorized certification bodies, either as a smart card or USB token:

Chamber of Commerce (http://www.pks.rs/Usluge.aspx?IDUsluge=4&t=2).
Post of Serbia (http://www.ca.posta.rs/postupak_izdavanja.htm).
Halcom a.d. (http://www.halcom.rs/rs/proizvodi/kvalifikovani-sertifikat/narucivanje-pravna-lica/).

It is most common for founders to visit the Chamber of Commerce for obtaining the electronic certificate since it can be done within a few hours. The electronic certificate must be obtained personally.

If the statutory representative is a local citizen, his/her electronic certificate must contain the unique master citizen number (JMBG in Serbian), and if the statutory representative is a foreign citizen – a registration number for foreigners.

Time and cost: 1 day, RSD 3,000 (without VAT)

Register Ultimate Beneficial Owners (UBO)

Agency: Serbian Business Registers Agency website

The Registry of Ultimate Beneficial Owners is operational since January 31, 2019. An obligation to register the ultimate beneficial owners applies to all legal entities, excluding public joint-stock companies, entrepreneurs, government-owned companies, political parties, trade unions, sports organizations and associations, churches and religious communities, legal entities in bankruptcy, legal entities in forced liquidation.

The data on beneficial owners are registered online at the website of the Serbian Business Registers Agency (reid.apr.gov.rs) by a statutory representative holding the electronic certificate. Pursuant to the Serbian Law on Ultimate Beneficial Owners Central Registry, the statutory representative is required to provide the following data (depending on who is ultimate beneficial owner):

For domestic natural person – name and surname, unique master citizen number (JMBG in Serbian) and state of residence;
For foreigner – name and surname, passport number and state of issuance and/or registration number for foreigner and/or ID card number and state of issuance, and place and date of birth, state of residence and citizenship;
For refugees – name and surname, number of ID document, place and date of birth and state of temporary residence;
Legal ground for being considered as beneficial owner.

The beneficial owners should be registered within 15 days from date of entity registration or any change of the beneficial owners. Company registration must be completed prior to registering the ultimate beneficial owners. The registration process is rather simple, and on average takes approximately 30 minutes. The registration is completely free of charge.

Time and cost: Less than 1 day (online procedure), no charge