Company registration in Serbia
Process of company registration in Serbia
The process of company registration in Serbia begins with decisions:
- who will be empowered for company registration in Serbia (owner or its proxy in Serbia)
- what legal form is selected (please see explanation of all legal forms below in text)
- who will be the owner (legal entity or individuals)
- what is business activity and business code
- what would be registered address
- what is subscribed equity
- who is legal representative of company
- would the company wishes to be automatically registered in VAT in Serbia
- what are expected revenues and expenses in first year of operations
After collecting of the above information, the Founding act should be prepared and stamped by official notary office.
The owner should provide evidence such as passport (in a case the individual is owner) or extract from official register (in a case legal entity is owner). Passport should be provided also by legal representative of company.
Next step of company registration in Serbia is filling registration form provided by Serbian Business Register Agency. Administration tax to be paid to Serbian Business Register Agency is approximately 50 EUR.
In case fonder wishes to empower a proxy for company registration in Serbia, Power of Attorney is mandatory.
For support in company registration in Serbia, please contact our legal team.
Legal forms of company registration in Serbia
According to the Serbian Law on Business Entities there are four legal forms for company registration in serbia
- General Partnership
- Limited Partnership
- Limited Liability Company
- Joint-Stock Company
A company can be incorporated for a limited or unlimited duration. Also, a foreign entity can incorporate a representation office.
General Partnership (o.d.)
A general partnership is a company with two or more partners with unlimited joint and several liability for the company’s obligations with their entire assets.
The company name must include the words “ortačko društvo” or the abbreviations “o.d.” or “od”.
All partners sign the Foundation Agreement. Partners invest the same stake in a company and share profits equally, unless regulated differently by the Foundation Agreement.
Decisions are adopted unanimously (“one partner = one vote” rule), unless regulated differently by the Foundation Agreement.
General partnerships prepare annual financial statements and are subject to corporate income tax. There are no minimum basic capital requirements.
Limited Partnership (k.d.)
A limited partnership is a company with a minimum of two members, at least one of which bears unlimited joint and several liability for the company’s obligations (general partner) and at least one other bears limited liability up to the amount of their outstanding contribution (limited partner).
The company name must include the words ‘’komanditno društvo’’ or the abbreviations “k.d.” or “kd”. General partners manage the operations of and represent a company. Limited partners may not manage the operations of a company or represent it.
Partners sign the Foundation Agreement, in which it is defined who the general partner is and who the limited partner is. Limited partners and general partners participate in sharing profits and covering losses in their company in proportion to their equity interests in the company, unless otherwise provided for by the deed of incorporation.
Limited partnerships prepare annual financial statements and are subject to corporate income tax. There are no minimum capital requirements.
Limited Liability Company (d.o.o.)
For company registration in Serbia, a limited liability company is the most popular form. This is a company in which one or more company members hold equity interests in the company’s share capital, except that company members are not liable for the company’s obligations, apart from in special circumstances defined by the Act on Business Entities.
The company name must include the words “društvo sa ograničenom odgovornošću” or the abbreviations “d.o.o.” or “doo”.
It is the most common legal form of company in Serbia because of the limited liability of its founders and low capital requirement (minimum basic capital is RSD 100, i.e. less than EUR 1).
If one person incorporates a company they sign a Foundation Decision. If two or more people incorporate a company, they sign a Foundation Agreement.
The company founders (or members) constitute the Assembly, which makes the statutory decisions. Their voting rights and rights in sharing profits are proportional to their stake in the company’s capital, unless otherwise regulated by the Foundation Act.
For a decision to be adopted, 50% plus 1 vote is needed, unless otherwise regulated by the Foundation Act.
The company’s business activities are managed by a director or directors, who are registered at the Business Register Agency. Directors may or may not be company members.
Limited liability companies prepare annual financial statements and are subject to corporate income tax.
A joint-stock company
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 special circumstances, as defined by the Act on Business Entities.
If a joint-stock company’s shares are listed on the stock exchange, it is called a public joint-stock company. If a joint-stock company’s shares are not listed on the stock exchange, it is called a private joint-stock company.
The company name must include the words “akcionarsko društvo” or the abbreviations “a.d.” or “ad”.
The company’s shareholders sign the Foundation Act and the Statutory Act upon the company’s incorporation.
The shareholders constitute the Shareholders’ Assembly, which makes the statutory decisions. Their voting rights and rights in sharing profits are proportional to their share in the company’s capital.
The minimum basic capital is RSD 3,000,000 (around EUR 25,000). Corporate governance can be one-tier and two-tier. In the one-tier model of governance, the Shareholders’ Assembly elects a Board of Directors, which consists of executive directors who manage the business operations, and non-executive directors (obligatory if a company is a public joint-stock company), who control the executive directors, consult on the company’s business strategy and monitor strategy implementation.
In the two-tier model of governance, the Shareholders’ Assembly elects a Supervisory Board, which elects and controls the Executive Board, comprising the executive directors who manage the business operations.
Financial audit requirement
For joint-stock company a financial statements must be audited.
In regard with other forms, there is a legal requirement for an audit of the financial statements if the company generates more than EUR 4.4 million of revenue in a year, or is classified as a large or medium-sized entity, according to the Act on Accounting.