HOW TO DO BUSINESS IN BELGRADE

I Setting up of business entities

II Foreign investments

All data are intended for information purposes only.
For actual realization please contact the Centre for Economic System and Legislation or legal experts.

REGISTRATION OF BUSINESS ENTITIES

Legal basis

1. LAW ON COMPANIES
   (Official Herold of the Republic of Serbia, No. 125/04)
   
   
2. LAW ON ENTERPRISES
   (Official Gazette of SRY, No. 29/96, 33/96, 29/97, 59/98, 74/99, 9/2001 – Federal Constitutional Court ruling - and 36/2002). The Law has been repealed with the exception of Articles 392-399 and Articles 400a, 400b, 400v and 421a which shall remain in force until the expiry of the privatization deadlines set under the law governing privatization.
   
   
3. LAW ON REGISTRATION OF ECONOMIC ENTITIES
   (Official Herold of the Republic of Serbia, No. 55/04, 61/05)
   
   
4. LAW ON AGENCY FOR CORPORATE REGISTERS
   (Official Herold of the Republic of Serbia, No. 55/04)
   
   
5. DECISION ON FEES PAYABLE FOR REGISTRATION AND OTHER SERVICES PROVIDED BY THE AGENCY FOR CORPORATE REGISTERS
   (Official Herold of the Republic of Serbia, No. 109/05)
   
   
6. LAW ON ENTREPRENEURS
   (Official Gazette of the SRS, No. 54/89 and 9/90 and the Official Gazette of the Republic of Herold, No. 19/91, 46/91, 31/93 – the Serbian Constitutional Court ruling, 39/93, 53/93, 67/93, 48/94, 53/95 and 35/2002, 55/04,61/05,101/05)
   
   
7. LAW ON CLASSIFICATION OF BUSINESS ACTIVITIES AND ON REGISTER OF CATEGORIES
   (Official Gazette of the SRY, No. 31/96, 34/96, 12/98, 59/98,74/99)
   
   
8. LAW ON FOREIGN INVESTMENTS
   (Official Gazette of the SRY, No. 3/02 and 5/03)
   
   
9. LAW ON COOPERATIVES
   (Official Gazette of the SRS, No. 57/89; Official Gazette of the Republic of Serbia, No. 67/93,46/95,101/05)
   
   
10. LAW ON COOPERATIVES
    (Official Gazette of the SRY, No. 41/96 and 12/98)
    
    

Business entities are registered at the Agency for Corporate Registers,
11000 Belgrade, 5 Nikola Pasic Square
• Phone: (011) 3331 444
• Fax: (011) 2230 943
•Internet: www.apr.sr.gov.yu
• e-mail: registar@eunet.yu

BUSINESS ENTITIES:

1. ENTREPRENEUR
   
   
2. GENERAL PARTNERSHIP
   
   
3. LIMITED PARTNERSHIP
   
   
4. LIMITED LIABILITY COMPANY
   
   
5. JOINT STOCK COMPANY (OPEN AND CLOSED)
   
   
6. COOPERATIVE AND COOPERATIVE UNION

E N T R E P R E N E U R

An entrepreneur is a physical person who starts a new business venture and who professionally engages in all legally permitted activities including arts, old crafts and cottage industry activities, for the purpose of earning profit.

Under this law, an entrepreneur shall also be a physical person who has been entered in a special register and who professionally engages in freelance activities regulated under special acts, if this is specified in these acts.

Entrepreneurs are liable with all of their assets for all liabilities arising from their business activities.

An entrepreneur shall perform his/her business activity under his/her own name, the name of another person or under a special business name, to which term "entrepreneur" or abbreviation "pr" shall be added.

Registration

The following documents must be attached to a request for the registration of an entrepreneur:

If an entrepreneur performs his/her activities under a name other than his/her own name, he/she has the obligation to register this name at the Agency for Corporate Registers.

LEGAL TYPES OF COMPANIES

1. GENERAL PARTNERSHIP
   
   
2. LIMITED PARTNERSHIP
   
   
3. LIMITED LIABILITY COMPANY
   
   
4. JOINT STOCK COMPANY (OPEN AND CLOSED)

GENERAL PARTNERSHIP

A general partnership is a company set up by two or more physical and/or legal persons who act as partners in performing a business activity under a single business name and who are liable with all of their assets for their obligations. The partners shall be liable for all of the company’s obligations with all of their assets, unless a different arrangement has been made with the creditor.

The partners’ investment in the general partnership may be in form of cash, goods and rights, as well as in the form of any past or future work or services.

The partners’ investments are of the same value.

Registration

The following documents must be attached to a request for the registration of a general partnership:

LIMITED PARTNERSHIP (LP)

A limited partnership is a company set up by two or more physical and/or legal persons who act as partners in order to perform a business activity under a single business name. At least one of these persons has the unlimited liability for the company’s obligations (general partner) and the liability of at least one other person is limited to the value of his/her agreed investment (limited partner). Limited partnerships are liable for their obligations with all of their assets.

The general partner’s investment in the limited partnership may be in the form or cash and intangible assets, including work done for and services rendered to the limited partnership.

The general partner shall deposit the entire agreed investment in the limited partnership before he/she becomes the general partner.

Registration

The following documents must be attached to the request for the registration of a limited partnership:

1. proof of the founders’ identities (photocopies of the identity cards or passports for physical persons, and/or an statement from the register where the legal person was registered);
   
   
2. limited partnership agreement, with the founders’ certified signatures;
   
   
3. bank statement proving that the general partner has deposited his/her cash investment into a temporary account or a certified statement of the general partner that he/she has secured the cash investment;
   
   
4. decision on the appointment of the representative of the limited partnership, unless he/she has been appointed under the founding act;
   
   
5. certified signature of the representative;
   
   
6. registration fee at the amount of 3,000.00 dinars.
   

LIMITED LIABILITY COMPANY (LLC)

A limited liability company is a company set up by one or more (up to 50) legal and/or physical persons in the capacity of company members in order to perform a business activity under a single business name. Limited liability companies are liable for their obligations with all of their assets.

Company members are not liable for the company’s obligations, except up to the value of the nondeposited investment in the company’s assets.

If the number of company members reaches 100 and remains at that number for more than one year, the company shall change its type and become a closed joint stock company.

An investment in the limited liability company may be made in cash or in intangible assets, including the work performed for or services rendered to the company. Members’ investments do not have to be of the same value.

The pecuniary part of the fixed capital of a limited liability company must amount to the dinar counter-value of at least 500 euros, calculated according to the mean exchange rate at the date of the payment. At least one half of this amount must be deposited into an interim account before the date of registration of the company and the rest within two years after the registration date.

For the founding of financial and insurance companies and other companies that perform legally defined activities as limited liability companies, a greater value of the minimum fixed capital may be required under a special law.

Registration

The following documents must be attached to the request for the registration of a limited liability company:

1. proof of the founders’ identities (photocopies of the identity cards or passports for physical persons and/or a statement from the register where the legal person was registered);
   
   
2. act on the founding of the limited liability company (decision or agreement), with the certified signatures of the founders;
   
   
3. bank statement proving that the pecuniary investment has been deposited into the interim account or a certified statement of the founder that he/she has secured the pecuniary investment;
   
   
4. decision on the appointment of the company representative, unless he/she has been appointed under the founding act;
   
   
5. certified signature of the representative;
   
   
6. registration fee at the amount of 3,600.00 dinars.
   

JOINT STOCK COMPANY (JSC)

A joint stock company is a company set up by one or more legal and/or physical persons in the capacity of shareholders in order to perform a business activity under a single business name. The company’s fixed capital is determined and divided into shares.

Joint stock companies are liable for their obligations with all of their assets. Shareholders do not have any personal liability for the company’s obligations, except to the value of the agreed and nondeposited investment in the company’s assets.

An investment in a joint stock company in exchange for stocks may be made in cash or in goods and rights, but not in any past or future work or services for the company. Exceptionally, an intangible investment in a closed joint stock company may be in the form of work done for or services rendered to the company if this is envisaged under the founding act.

The agreed cash investment is paid as follows: at least 50% of the nominal value of the subscribed shares or 50% of the book value in the case of shares of no par value is paid before the registration of the company, and the rest is paid within two years after the date when the company was registered.

If one invests goods or rights in order to acquire shares or other securities, this form of payment is realized if these goods and rights are invested in the company’s assets within two years after the date when the company was registered.

A closed joint stock company is a company whose shares are issued only to its founders or to a limited number of other persons and the maximum number of shareholders in this case is 100. If this number increases and remains increased for more than one year, this company becomes an open joint stock company. Closed joint stock companies can neither offer their shares for subscription through general offers nor offer their shares publicly in any other way.

An open joint stock company is a company whose founders at the time of founding issue a public call for the subscription and payment of shares through a general offer and in a brochure in keeping with the Law on Companies and the law regulating the securities market. Under this law, a company may be quoted and unquoted. Open joint stock companies cannot limit the transfer of shares to the third persons.

Registration

The following documents must be attached to the request for the registration of a closed joint stock company:

1. proof of the founders’ identities (photocopies of the identity cards or passports for physical persons and/or statement from the register in the case of legal persons);
   
   
2. founding act of the company (decision or agreement), with the certified signatures of the founders;
   
   
3. bank statement on the cash investments deposited into the interim account;
   
   
4. founders' agreement on amount of non-financial investment, unless it has been determined under the founding act of the company;
   
   
5. decision on the appointment of the company representative (unless he/she has been appointed under the founding act);
   
   
6. certified signature of the representative;
   
   
7. registration fee at the amount of 10,200.00 dinars.
   
   

The following documents must be attached to the request for the registration of an open joint stock company:

1. proof of the founders’ identities (photocopies of the identity cards or passports for physical persons and/or statement from the register in the case of legal persons);
   
   
2. founding act of the company (decision or agreement), with the certified signatures of the founders;
   
   
3. bank statement on the subscribed shares;
   
   
4. bank statement on the cash investments deposited into the interim account;
   
   
5. proof of the issue and contents of a public call for the subscription and payment of shares (brochure), with the competent organ’s approval of the brochure;
   
   
6. an authorized assessor’s assessment of the value of the founders’ intangible investments;
   
   
7. decision on the appointment of the company representative (unless he/she has been appointed under the founding act);
   
   
8. certified signature of the representative;
   
   
9. registration fee at the amount of 10,200.00 dinars.
   

COOPERATIVE AND COOPERATIVE UNION

C O O P E R A T I V E

A cooperative is a type of organization of physical persons in which they operate on the basis of the corporate principles of good will and solidarity, democracy, economic participation, equal management rights, independence, cooperative training and collaboration with other cooperatives in order to realize their economic, social and cultural interests.

Cooperatives may be farming cooperatives – both general and specialized (for cereal and fruit producers, viticulture, crop farming, cattle-raising, apiarian, cottage industry, etc.), housing, consumer, crafts, health care, student and youth cooperatives, as well as other types of cooperatives for production, trade in goods and provision of services.

Registration

The following documents must be attached to the request for the registration of a cooperative:

C O O P E R A T I V E  U N I O N

A cooperative union is a stand-alone interest-based professional and business organization, which is set up in order to promote the activities of cooperatives and to protect their common interests.

Cooperative unions are set up according to types of cooperatives and for a certain territory, as district unions in a certain territory and for the territories of the provinces, republics and the State Union of Serbia and Montenegro.

Registration

The following documents must be attached to the request for the registration of a cooperative union:

II FOREIGN INVESTMENTS

LEGAL BASIS:

1. LAW ON FOREIGN INVESTMENTS
   (Official Gazette of the SRY, No. 3/2002 and 5/2003)
   
   
2. LAW ON COMPANIES
   (Official Herold of the Republic of Serbia, No. 125/04)
   
   
3. LAW ON ENTERPRISES
   (Official Gazette of  SRY, No. 29/96, 33/96, 29/97, 59/98, 74/99, 9/2001 – Federal Constitutional Court ruling, and 36/2002). The Law ceased to be in effect, except Articles 392-399 and Articles 400a, 400b, 400v and 421a, which will remain in force until the expiry of the privatization deadlines, set under the law governing privatization.
   
   
4. LAW ON REGISTRATION OF BUSINESS ENTITIES
   (Official Herold of the Republic of Serbia, No. 55/04,61/05), which takes effect on December 31, 2004, except its provisions pertaining to the registration of entrepreneurs, which will take effect on March 1, 2005.
   
   
5. LAW ON AGENCY FOR CORPORATE REGISTERS
   (Official Herold of the Republic of Serbia, No. 55/04)
   
   
6. LAW ON CLASSIFICATION OF BUSINESS ACTIVITIES AND ON REGISTER OF CATEGORIES
   (Official Gazette of the SRY, No. 31/96, 34/96, 12/98 and 59/98, 74/99, 212/99)
   
   
7. DECISION ON FEES PAYABLE FOR REGISTRATION AND OTHER SERVICES PROVIDED BY THE AGENCY FOR CORPORATE REGISTERS
   (Official Herold of the Republic of Serbia, No. 109/05)
   

In the State Union of Serbia and Montenegro, a foreign investment refers to:

The main types of foreign investments are:

The main types of foreign investments are specified in the founding agreement or the investment agreement which are concluded in writing, or by the founding decision which is made in writing.

Special types of foreign investments are:

Concessions and BOT permits are issued for a period of up to 30 years.

A foreign investor is:

1. foreign legal person which is based abroad;
   
   
2. foreign physical person;
   
   
3. Serbia and Montenegro national, whose abode or place of residence has been abroad for more than one year.
   

Legal security: Companies in which foreign investments have been made have the same legal status and operate under the same conditions and in the same way as domestic companies in which no foreign investments have been made. Foreign investors enjoy full legal security and legal protection of their investments.

Incentives and tax breaks for foreign investors:

Any disputes arising from the foreign investment may be solved before domestic courts or in foreign arbitration.
Foreign nationals who invest their capital in Serbia and Montenegro are entitled to receive business visas for an unlimited number of entries as well as the right to permanent residence in Serbia and Montenegro. The right to permanent residence in Serbia and Montenegro will cease to exist once the foreign person ends his/her business activities in Serbia and Montenegro or withdraws the invested capital. Foreign investors’ investments may be made in: convertible foreign currencies, or in tangible goods, intellectual property rights, securities or other property rights. The cash value of intangible investments must be stated.
More favorable treatment – if international regulations or a bilateral agreement signed by the foreign investor’s country and the State Union of Serbia and Montenegro envisage a treatment which is more favorable for the foreign investor or his/her investment than the treatment envisaged under the Law on Foreign Investments, the treatment envisaged in such an agreement shall be applied.
A foreign investor must not on his/her own or with another foreign investor set up an enterprise for the production and trade in arms in Serbia and Montenegro.

Registration and records of foreign investments

When registering a foreign investment, one should submit the documents relevant for the legal type of the company in question.

If a foreign physical person has permanent residence in Serbia and Montenegro, he/she must also submit a residence permit and in the case of temporary stay – a temporary stay permit (the documents must not be older than 30 days).

The records of foreign investments are kept at the Serbia and Montenegro Ministry of International Economic Relations, on the basis of notifications which the registration organ submits to the Ministry in its line of duty.

If any part of the foreign investment is realized as the import of equipment exempted from customs duty and other import fees, this should be stated in the agreement or decision on the foreign investment. The agreement must specify the value of each individual part of the equipment and its tariff nomenclature number. The specification of the imported equipment should also contain details of the way of payment.

Post-registration procedure

Registration number

A company/store acquires its registration number by filing the registration request with the Agency for Corporate Registers along with pertinent documentation and money order filled in as follows:

• remittance of the specified amount to the account of the Statistical Office of the Republic of Serbia
  No. 840-742221843-57,
• model: 97,
• reference number: depends on the unit of local self-government on the territory of company's registered office (an operator in the Agency  for Corporate Registers provides this number),
• beneficiary: Budget of the Republic of Serbia
• purpose: administrative fees

Address of the Agency: 11000 Belgrade, Nikola Pašić Square 5/IV  • tel: (011) 3331 444 • fax: (011) 2230 943 Internet: www.apr.sr.gov.yu • e-mail: registar@eunet.yu   

Tax Identification Number (TIN)

The Central Tax Office is responsible for allocation of TIN and registration of taxpayers, based on the received registration request and the following pertinent documents:

For companies:

• Form PR-1, request for registration of legal entity and business units (providing: identification data, registration data, business bank accounts, authorized representative, authorized manager and separate business units data)
  
  
• Registration Certificate

For entrepreneurs:

• For PR-2, request for registration of entrepreneurs (providing: store information, registration data, information on the store owner or authorized representative of the partners-owned store, authorized representative, authorized manager and separate business units data)
  
  
• Registration Certificate
  
  
• Store registration number

A taxpayer is liable to notify the Tax Office of all changes and additions in regard to information provided in the registration request  within five working days from the date when the change occurs, by filling the Form PPR-1 – Notification of changes/additions to information on registered legal entities and business units, that is, by filling the Form PPR-2 Notification of changes/additions to information on registered entrepreneurs.

Opening of business checking accounts  – requested documentation:

• Account opening request (providing: complete name of the client, full address, municipality, registration number, tax identification number, code of activity, contact person, telephone number, signature and seal);
  
  
• Registration Certificate (copy);
  
  
• Founding document, or reference to a law or regulation if a client has been established by provisions of a certain law or regulation;
  
  
• Statement from the relevant Statistical Authority about classification by activities (copy);
  
  
• Statement from the relevant Tax Office containing client's tax identification number (copy);
  
  
• Certified signature of the authorized representatives according to OP form (copy);
  
  
• Specimen signature card for persons authorized to sign instructions to the bank (bank's form);
  
  
• Proof of payment of administrative fees.

Registration of beneficiaries of medical, pension and disability insurance 

In order to register as a beneficiary of medical, pension and disability insurance, the required information must be submitted to the registry office, as follows:

• employed persons, that is, persons employed by a company or other legal entity, as well as persons employed by physical persons, register at the registry office covering the company's or company unit's registered location;
  
  
• founders of the company or its shareholders, but not employees of a company, register at the registry office covering the company's registered location;
  
  
• entrepreneurs and self-employed persons register at the registry office covering the area where they registered their  businesses.
  
  
• Required documentation:
  
  
• Registration Certificate
  
  
• Application for pension and disability insurance: for employed persons Form M-1; for self-employed persons and individual agricultural producers Form M-1/SP and documentation provided by the National Employment Agency
  
  
• Application for medical insurance and healthcare card
  

Notification of changes during insurance coverage period is made by filling the Form M-3 for employed persons, that is, M-3/SP for self-employed persons and individual agricultural producers.

Address of the Republic  Fund for Pension and Disability Insurance:
30 Nemanjina Street,  Tel: 011/ 657-537