Starting a company in Serbia

Who can start a company in Serbia?

Foreign person or a foreign company can be a founder of an LLC (limited liability company) company in Serbia.

LLC company in Serbia must have:

Founder of the company – it can be a natural person or a legal entity (such as your company originating from abroad).
Director of the company – it can be an employee, or a professional manager from Serbia (such as our agency).

If a director of a company is a Serbian resident, then a founder of a LLC doesn’t have to be physically present in Serbia, in order to establish a company here. However, if a director of a company is not a Serbian resident, then he/she must be present in Serbia for at least two weeks to open bank accounts and resolve other administrative issues.

Headquarters – this represents a physical address of a company in Serbia. LLC has two options:
- Option 1- Physical office lease – LLC can have legal offices for employees. You can lease an apartment or business premises as an office.
- Option 2 – Virtual office lease – LLC can have so-called virtual office. Our agency offers the service. This option means that your company has (registered) seat in our premises, while all employees work from home i.e. remotely. For this purpose, we prepare a special employee agreement covering work from home.

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tax advice

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registering a company

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administration

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accounting

Obligatory taxes and costs for an LLC in Serbia

Cost/ taxes	Price in EURO	Price in US dollars
Bank account costs – monthly	40	50
Bank account costs – monthly	40	50
Eco tax cost – yearly	40	50
Local tax for highlighting name of the company – yearly*	from 250 to 500	from 300 to 600
Accounting cost**	See bullet 4.	See bullet 4.

*This tax is paid only by companies that have an annual revenue exceeding 420.000 euro, or 500.000 US dollars. Amount varies, depending on revenue, location, and company size.

Income tax – 15% is paid at the end of every calendar year, provided that a company made a profit. If a company did not make a profit, then it does not pay income tax.

VAT (Value Added Tax) – 20% – A company can choose to be in the VAT system or not. If a company will have only export invoices i.e. invoices issued to companies abroad, then there is no mandatory VAT, since the export is free from it. On the other hand, if a company invoices to other companies in Serbia, then the limit for entering the VAT system is set to 8 mil revenue in RSD (i.e. 65 thousand euros, or 80 thousand US dollars) in one calendar year. If a company is in the VAT system, then it has VAT deduction on services and goods purchased in Serbia.

Salaries in Serbia and taxes and contributions for salaries

There are obligatory taxes and contributions paid for an employee’s salary in Serbia. It is prescribed that 63% are added to the net salary of an employee, in order to get total cost of a salary. Thus, if a net salary is, for example, 1000 euros, then the total costs of such salary are calculated as follows: 1000 x 1, 63 = 1630. The below table lists all obligatory taxes and contributions paid in relation to an employee’s salary:

Description	Amount in EUR	Amount in USD	%
Net Salary example	1.000	1.000
Income tax 10%	125	121
Pension contribution employee 14%	197	196
Health contribution employee 5,15%	72	72
Unemployment contribution employee 0,75%	10	10
Pension contribution employer 11,5%	161	161
Health contribution employer 5,15%	72	72
Gross 1 salary as basis for taxes	1.404	1.400
Gross 2 salary – total cost for employer	1.637	1.633	1,63
Work from home (remote)*	17	17
Total cost salary & work from home	1.654	1.650

*”Work from home” item is obligatory only in a situation when an employee works from home. The labor law prescribes no minimum cost for work from home. However, this is an obligatory cost that needs to be paid to employees, who work from home.

We can distinguish two types of gross salary: gross 1 and a gross 2 salary.

Gross 1 represents employee’s salary with tax and contribution for an employee, which is the basis for calculation of all taxes and contributions.

Gross 2 represents total costs for the employer. It contains amount from gross 1 and also contributions for employer, meaning that gross 2 represents the total cost for the employer. The above table shows that the coefficient for calculation of gross 2 from net salary is 1, 63.

Administrative and accounting work from PSK

PSK accounting agency offers total package of services for foreign founders of an LLC in Serbia. We offer the following services:

Service	Price in EURO	Price in US dollars
One time cost for starting a company	450	520
One time cost for starting a company	450	520
Accounting and administration services – monthly *	170	200
Virtual office lease – monthly**	50	60
Professional management service***	370	450

*Price is for up to 3 employees and up to 40 bookkeeping entries. The price increases by 10 euro for each additional employee, and by 1 euro for each additional bookkeeping entry.
One bookkeeping entry implies one salary calculation, one bank statement etc.

**This service is optional. If you already have company headquarters, then you don’t need to use this service.

*** Price is for 3 employees, after that the price is increased by 20 euro for each additional employee. This service is optional, if you have another director from abroad or from Serbia, then you don’t need to use this service.

Time frame and procedure of registering a company in Serbia

It takes approximately 20 calendar days to register a company in Serbia.

Steps are the following:

Client provides necessary information about the company to be registered in Serbia, by means of filling out of our questionnaire.
Our Agency prepares Power of Attorney and provides the client with detailed information about documents that need to be notarized and apostilled.
Client forwards all notarized and apostilled documents to Serbia, to the address of our PSK Accounting Agency by DHL (delivery DHL is approx. 7 days).
When documents arrive, PSK Accounting Agency will register company with our Registration agency in Serbia (approx. 5 days to register).
After the registration is completed, the director opens bank accounts and the company is ready to work (approx. 5 days).
PSK accounting agency then completes the obligatory administrative work prescribed by the Serbian law after registration of a company, which includes filling of a beneficial owner registry, tax report, and working contracts with employees.