In this article, we’ll talk about how to register your company in Serbia, if it is possible to handle the process remotely, how to get residency through your company, and its details.
Is it possible to register your company remotely in Serbia?
Companies Act of the Republic of Serbia does not exclude the possibility for a foreign citizen to be the director of a domestic LLC. According to the Art. 382. of the Act, any natural person with legal capacity may be a director. However, foreigners appointed as directors of LLCs founded in Serbia often do not intend to work in Serbia or stay there for a long time. Moreover, we have repeatedly encountered clients’ questions, whether a foreign director has to come to Serbia at some point at all?
For the registration of an LLC in Serbia, the presence of neither the founder nor the legal representative – the director of the LLC is necessary. All actions in the registration procedure before the Business Registers Agency can be undertaken through a proxy in Serbia.
However, the foreign director of the LLC in Serbia will undoubtedly have to come to Serbia immediately after the registration of the company is accomplished, for at least two reasons:
- When opening an LLC account in a commercial bank.
Namely, when submitting the request for opening an account, the director must personally sign the so-called OP form. That action cannot be done through a proxy;
- When obtaining an electronic signature for the director.
An electronic signature is required for signing the company’s annual financial report and signing the application for registration in the Register of beneficial owners. In Serbia, a foreigner-director receives an electronic signature via the Post Office on a USB device. When handing over such a USB device, the director shall sign the contract on the use of electronic signature, also in person.
It should be noted that the deadlines for undertaking the actions mentioned above are extremely short and strict and amount to a maximum of 15 days from the date of receipt of the decision on registration of LLC. Therefore, as has already been emphasized, the foreigner-director must come to Serbia immediately after the registration of the LLC. In our opinion, for taking the actions mentioned above, the director will need a stay in Serbia lasting from a minimum of three days up to a maximum of two weeks.
Is it neccessary to stay in Serbia after registration?
In reality, the duration of the presence of a foreign director in Serbia will often be largely dependent on the nature of the company’s business. It should be borne in mind that the scope of obligations and responsibilities of the director of the LLC under present Serbian legislation is quite large. Besides, a director shall conduct the day-to-day business activity of the company. Therefore, our strong recommendation is for the foreign director to reside in Serbia whenever the circumstances require.
However, to be employed in an LLC on the basis of a labor contract, the foreign director must obtain a visa for a more extended stay based on employment, a temporary residence or permanent residence, and a work permit. The procedures for obtaining these documents are often complex and time-consuming, regarding the fact that they all have to be issued by different state bodies.
Terms of staying in Serbia after company registration for foreigners
The stated terms for employment of a foreigner do not apply to a foreigner whose stay in the Republic of Serbia does not last longer than 90 days within six months from the day of first entry into the Republic of Serbia if the foreigner is the owner, founder, representative or member of a legal entity registered in the Republic of Serbia if that legal entity does not employ him.
This provision is vital for foreign directors who don’t intend to run the company’s activity from Serbia. Such a director can regulate his relations with the LLC by a so-called managerial contract. As opposed to the labor contract, the managerial contract does not require a work permit and residence approval in Serbia to be issued. There is another equally important advantage of this type of contract over the labor contract. Unlike labor contracts, the elements of the managerial contract are not strictly prescribed in any specific regulation. Therefore, the content of such a contract will depend almost solely on the contractors’ will.
The tax treatment of a managerial contract is more favorable than that of a classic labor contract. For instance, if the managerial contract stipulates that the director works without compensation, no tax must be paid.
In addition, a foreigner is often the only member and the director of an LLC at the same time. In that case, there is no place for concluding a labor contract.
According to the Opinion of the Ministry of Labor, in a case when one person in a one-member company simultaneously performs the function of the assembly and the director, he cannot conclude a labor contract with himself and thus establish an employment relationship in the capacity of the director under the Article 48 of the Labor Law, because such a contract would not be considered a bilateral act governing mutual rights and obligations arising from employment between an employee in the capacity of the director and employer – the competent body of the employer.
An alternative to occasional visits of a foreign director to Serbia is for the LLC to appoint his deputy or procurator. It is recommended that it be a domestic natural person with permanent residence in Serbia. For this decision to have legal effect against third parties, it must be registered within the Business Registers Agency.
Suppose you need additional information on regulations by way of the formation and functioning of LLC in Serbia, the residence and employment status of foreigners in Serbia, or the position of director of the LLC. In that case, we will be pleased to try to answer your questions.
Gurcan Partners is a professional law and consultancy firm, located in Belgrade. We provide tailor-made incorporation services in Serbia
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All rights reserved. All rights of Registering a Company Remotely in Serbia article belong to Gurcan Partners. The author has no responsibility for the information in this article. This article is prepared just to inform.
Att. Milan S. Momcilovic
Gurcan Partners Belgrade Office