Establishing a Business in Serb

Establishing a Business in Serbia - Things Every Investor Should Know

October 14, 2017 by Nebojša Stanković

If you are looking to invest in Serbia, it is important to learn a couple of important things before going through with this process. This is because Serbia is a country in transition and although they are looking to adjust all of their laws towards foreign investments the same way most developed countries have, they still have many things to accomplish. Until then, Serbia is still a good market for potential investors, but there are a couple of steps you need to make in order to become one and here are the things you need to know.

Foreign investors

When it comes to opening up a business in Serbia as a foreigner the difference is that the individual willing to invest has to give his/her name, passport number, the value of the investment, and the role of every person involved in the startup.

If we are talking about a company that wants to expand its presence on the global market, it is necessary to deliver your business name, the identification number, headquarters of the business, and the information about the founder of that company.

Where can you invest

According to the current legal regulations, although foreign direct investments allow higher control and do not just allow investors to get ownership of a business, foreign investors in Serbia cannot get the majority needed to run a government-owned business in which they are investing if we are talking about any gun related industry, certain economic areas which are strategically important to the state, or if the law simply forbids foreigners to own and run certain areas of the economy. To invest in such areas with special conditions, it is necessary to get permission from designated authorities. 

How does it work

A foreign business organization can have a branch office in Serbia through which it can perform business incentives in this country according to the law. This branch office and all of its actions are submitted to the regulations in article 4 of the Law about Private Businesses.

The activities of this branch need to be transparent and offer the name, address, primary industry, the name of the owner, a business name, a legal representative, and the power that the representative has. Additionally, it is also necessary to provide all of the information that we previously mentioned about the foreign HQ and company information.

Buying a business and changing ownership

In case a branch is being shut down, it stops existing as such without the process of liquidation and all of the ties that the business has with its foreign owner as well as the ones in the country are also shut down. At the same time, all of the obligations that the business had go to the new owner depending on the contract of acquisition that has been signed.

At the same time, if there are multiple new owners, all of them get equal obligations which match the owner change contract. All of the owners get equal obligations as well as the ownership of the business, however it is possible for a new investor to get more by agreeing to special terms within a contract with the rest of the investors. All of the licenses, authority, or status symbols go to new members of that business and all of the power, as well as the board votes, go to new directors in the company.

In the end, it’s important to remember that all foreign investors are obligated under the Law of Foreign Investments to do their work while following regulations of environment protection or they will be penalized financially.