Sources of positive law in Serbia

An Overview of the Sources of Positive Law in Serbia

November 3, 2017 by Nebojša Stanković

In the following overview, you'll find the Sources of Positive Law in Serbia – statutory laws, bylaws, and other sources of law, including the international law of the Republic of Serbia.

Statutory Laws and Bylaws

According to the Foreign Investments Act, foreign investment involves capital flows from one country to another, whereas the foreign investor gains a share or stock in the equity capital of a domestic company, or the acquisition of any other property right by which the investor realizes his/her business interests on the territory of our country.

A foreign investor can be any foreign legal person with headquarters abroad, a foreign natural person, or a citizen of the Republic of Serbia with permanent or temporary residence abroad for a period of more than one year. 

In accordance with the law, a foreign investor can establish a company, buy shares in existing companies, or acquire permits, i.e. concessions, for the exploitation of natural resources or common goods, or for conducting activities of common interest. These forms of investments a foreign investor can submit alone, or together with another foreign or domestic investor.

Forms and general terms of investment of foreign capital in domestic companies are prescribed by the Foreign Investments Act, while in the financial sector (banks, funds, insurances, securities) they are prescribed by the laws such as the Law of Banks, the Insurance Law, the Law of Securities and other financial instruments, the Law of Investment Funds. The investments of foreign capital, the property of a foreign person and the free zone are regulated by the foreign-trade, customs, and foreign exchange regulations, the Law of Foreign Trade, the Law of Customs, the Law of Foreign Exchange, the Law of Free Zones, the Law of Property Relations, and the Law of Foreigners.

According to the Foreign Investments Act, an investment from a foreign investor may be expressed in the convertible foreign currency or in dinars, in assets, intellectual property rights, securities and other property rights, or in shares of a debtor-company. Non-monetary investments must be expressed in monetary terms.

Other Sources of Law

Foreign investors may be interested in simplified procedures for establishing and registering a company, for simple foreign-trade business procedures, realization of foreign investments, and the portability of goods in accordance to the agreement on free trade.

This is where international regulation is of the utmost importance – Central European Free Trade (CEFTA), European Free Trade Agreement (EFTA), the Autonomous Trade Preferences of E.U, the application of traditional Trade Agreement with E.U, agreement with the Russian Federation, with Belorussia and Kazakhstan, and agreement with Turkey, in which the Republic of Serbia is one of the signatories.

The Republic of Serbia has signed agreements on the Avoidance of Double Taxation in the form of Bilateral Contracts on the Mutual Support and Protection of Investments with 50 countries. These contracts are of vital significance for further collaboration. One of the main purposes of a Bilateral Contract on the Mutual support and Protection of Investments is the improvement of terms and the increase in the influx of foreign direct investments.

According to the Serbian Chamber of Commerce, the Serbian Parliament has signed a total of 77 contracts with foreign countries. A majority of this has been signed after 2001, although some of the contracts in effect have been signed during the Socialist Federal Republic of Yugoslavia and the State Union of Serbia and Montenegro. Among those in effect, 49 contracts regulate the Avoidance of Double Taxing, while 46 of the remaining contracts regulate Mutual Support and Protection of Investments.

The largest number of Bilateral Contracts on the Avoidance of Double Taxing of income and property (13 contracts in which the Republic of Serbia has been signed as a sovereign state), has been signed with European countries.
The Agreements on the Mutual Support and Protection of Investments mostly apply to the free transfer of goods, in concordance to the regulations prescribed on the Vienna Convention on the Law of Treaties back in 1969, and in concordance with the OECD Model (Organisation of Economic Co-operation and Development). In a majority of cases, the agreement is signed for a period of 10 years, with automatic extension of validity, successively, in case none of the sides expresses the need for terminating the agreement.

Tables 1-10 offer an overview of the Serbian Bilateral Contracts on the Protection of Investments and the Avoidance of Double Taxation, and the laws on ratification of the agreements, memorandums and protocols with these countries.


 

Albania

Austria

Belgium

The Benelux Union

Belorussia

Contract on the Avoidance of Double Taxation (Income and Property Tax)

+

+

 

 

 

Agreement on the Mutual Support and Protection of Investments

+

+

 

+

+

Agreement on Consolidation of Concract Requirenments, including the Contract on the Avoidance of Double Taxation

 

 

+

 

 

Table 1: An overview of Serbian Bilateral Contracts on the Protection of Investments and the Avoidance of Double Taxation with Albania, Austria, Belgium, The Benelux Union, and Belorussia.

 

Bosnia and Herzegovina

Bulgaria

Montenegro

The Czech Republic

Egypt

Contract on the Avoidance of Double Taxation (Income and Property Tax)

+

 

+

+

 

Agreement on the Mutual Support and Protection of Investments

+

+

+

+

 

Protocol for the Contract on the Avoidance of Double Taxation (Income and Property Tax)

 

 

 

+

 

Contract on the Avoidance of Double Taxation (Income Tax)

 

 

 

 

+

Agreement on the Protection of Investments

 

 

 

 

+

Table 2: An overview of Serbian Bilateral Contracts on the Protection of Investments and the Avoidance of Double Taxation with Bosnia and Herzegovina, Bulgaria, Montenegro, the Czech Republic, and Egypt.

 

Denmark

Estonia

Finland

France

Ghana

Contract on the Avoidance of Double Taxation (Income and Property Tax)

+

 

 

 

 

Agreement on the Mutual Support and Protection of Investments

+

 

+

 

 

Conctract on the Avoidance of Double Taxation (Income Tax)

 

+

 

 

 

Agreement on the Succession of Bilateral Contracts, including those on the Avoidance of Double Taxation and on the Protection of Investments

 

 

 

+

 

Contract on the Avoidance of Double Taxation (Income, Property, and Capital Gain Tax)

 

 

 

 

+

Table 3: An Overview of Serbian Bilateral Contracts on the Protection of Investments and the Avoidance of Double Taxation with Denmark, Estonia, Finland, France, and Ghana.

 

Greece

Netherlands

Croatia

India

Indonesia

Contract on the Avoidance of Double Taxation (Income and Property Tax)

 

 

+

+

+

Agreement on the Mutual Support and Protection of Investments

 

+

+

+

+

Change Protocol for the Contract on the Avoidance of Double Taxation (Income and Property Tax)

+

 

 

 

 

Table 4: An overview of Serbian Bilateral Contracts on the Protection of Investments and the Avoidance of Double Taxation with Greece, Netherlands, Croatia, India, and Indonesia.

 

Iran

Ireland

Italy

Israel

Qatar

Contract on the Avoidance of Double Taxation (Income and Property Tax)

+

+

 

 

 

Agreement on the Mutual Support and Protection of Investments

+

+

+

+

 

Contract on the Avoidance of Double Taxation (Income Tax)

 

 

 

 

+

Table 5: An overview of Serbian Bilateral Contracts on the Protection of Investments and the Avoidance of Double Taxation with Iran, Ireland, Italy, Israel, and Qatar.

 

Kazakhstan

China

Cyprus

Korea

Kuwait

Contract on the Avoidance of Double Taxation (Income and Property Tax)

 

 

 

 

+

Agreement on the Mutual Support and Protection of Investments

+

+

+

 

+

Contract on the Avoidance of Double Taxation (Income and Property Tax)

 

 

 

+

 

Table 6: An overview of Serbian Bilateral Contracts on the Protection of Investments and the Avoidance of Double Taxation with Kazakhstan, China, Cyprus, Korea, and Kuwait.

 

Latvia

Libya

Lithuania

Hungary

Macedonia

Contract on the Avoidance of Double Taxation (Income and Property Tax)

 

 

+

+

 

Agreement on the Mutual Support and Protection of Investments

 

 

+

+

 

Agreement on Consolidation of Contract Requirements, including the Contract on the Avoidance of Double Taxation

 

 

 

 

+

Contract on the Avoidance of Double Taxation (Income Tax)

 

+

 

 

 

Agreement on the Protection of Investments

 

+

 

 

 

Contract on the Avoidance of Double Taxation (Income and Property Tax)

+

 

 

 

 

Table 7: An overview of Serbian Bilateral Contracts on the Protection of Investments and the Avoidance of Double Taxation with Latvia, Libya, Lithuania, Hungary, and Macedonia.

 

Malta

Moldavia

Germany

Nigeria

Agreement on the Mutual Support and Protection of Investments

 

 

 

+

Contract on the Avoidance of Double Taxation (Income Tax)

+

 

 

 

Agreement on the Protection of Investments

+

 

 

 

Contract on the Avoidance of Double Taxation (Income and Property Tax)

 

+

 

 

Agreement on the Succession of Bilateral Contracts, including those on the Avoidance of Double Taxation (Income and Property Tax) and on the Mutual Support and Protection of Investments

 

 

+

 

Table 8: An overview of Serbian Bilateral Contracts on the Protection of Investments and the Avoidance of Double Taxation with Malta, Moldavia, Germany, and Nigeria.

 

Slovakia

Slovenia

Spain

Switzerland

Turkey

Ukraine

Agreement on the Mutual Support and Protection of Investments

 

+

+

+

+

+

Contract on the Avoidance of Double Taxation (Income Tax)

 

+

+

+

+

+

Contract on the Avoidance of Double Taxation (Income and Property Tax)

+

 

 

 

 

 

Agreement on the Mutual Support and Protection of Investments

+

 

 

 

 

 

Change Protocol for the Agreement of the Mutual Support and Protection of Investments

+

 

 

 

 

 

Table 9: An overview of Serbian Bilateral Contracts on the Protection of Investments and the Avoidance of Double Taxation with Slovakia, Slovenia, Spain, Switzerland, Turkey, and Ukraine.

 

Norway

Pakistan

Portugal

Romania

Russia

USA

Contract on the Avoidance of Double Taxation (Income Tax)

 

 

+

+

+

 

Contract on the Avoidance of Double Taxation (Income and Property Tax)

 

+

 

 

 

 

Agreement on the Encouragement of Investments

 

 

 

 

 

+

Agreement on the Succession of Bilateral Contracts, including the contract on the Avoidance of Double Taxation

+

 

 

 

 

 

Table 10: An overview of Serbian Bilateral Contracts on the Protection of Investments and the Avoidance of Double Taxation with Norway, Pakistan, Portugal, Romania, Russia, and USA.

In Serbia, we use 12 different criterions to determine the overall favorability of a business environment. If a municipality wants to create a more favorable business climate and increase the number of investments in local governments, it has to apply for a certificate issued by the NALED program, and fulfil at least two thirds, e.i. 8 of all 12 criterions. This certification program for municipalities with a favorable business environment promotes the efficiency and transparency of local administrations and allows quality service evaluation.

According to the the Serbian Chamber of Commerce, Bujanovac, Čačak, Inđija, Leskovac, Kragujevac, Loznica, Niš, Sremska Mitrovica, Stara Pazova, Subotica, Valjevo, Vranje, Zaječar i Zrenjanin are certified as municipalities with a favorable business environment (Business Friendly Certification – BFC).

Needless to say, the certification program for municipalities with a favorable business environment also improves local business conditions, thus attracting new foreign direct investments and encouraging local economy.