New incentives for entrepreneurs

At the end of 2023, the Government of Serbia has adopted two important incentives for entrepreneurs who are taxed on a flat rate basis, namely:

  • extended until the end of 2025 the application of the limit on the increase of the tax base for lump sums of no more than 10% per year,
  • increased the reduction of the base for business beginners to 50 %, who will be registered in 2024.

Using the flat-rate tax and contribution calculator available on the website of the Tax Administration, flat-rate entrepreneurs can find out the amount of obligations in advance.
From 2020, tax rulings are delivered exclusively in electronic form through the tax box on the ePorezi portal, access to which requires the use of a qualified electronic certificate.
Everything about taxes for entrepreneurs, as well as registration and complete record keeping for entrepreneurs, you can leave to us.

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Changes related to residence permit and work permit in Serbia

The Parliament of Serbia adopted amendments to the Law on the Employment of Foreigners and the Law on Foreigners, which enables foreign nationals to exercise the right to temporary residence and to work in Serbia in a single procedure, through a single verification procedure related to both the approval of temporary residence and work permits.

Some amendments and additions apply from the 4th August 2023, while certain amendments and additions will start to be implemented from the 1st February 2024.

Important changes:

Duration of temporary stay: Certainly the biggest change is the duration of the temporary stay, and now instead of up to 1 year, a foreigner can be granted a temporary stay for up to 3 years!

Single permit: There will be a single permit for temporary residence and a work permit, which will be issued to all foreigners who are granted temporary residence based on employment.

The right to work without a work permit: Foreigners who have been granted temporary residence on other grounds such as ownership of real estate or family reunification will have the right to work without applying for a special unique work permit.

Visas for entering Serbia in electronic format: For those foreigners who need visa C or visa D the new amendments to the Law provide for the possibility of issuing a visa in an electronic format, which will greatly facilitate the procedure.

Extension of temporary stay: Instead of the earlier 30 days before the expiration, the law now allows a foreigner to apply for an extension of temporary residence right before the expiration of the current temporary residence.

Use of identity card instead of passport: Amendments to the Law on Aliens provide that if, according to international agreements, a foreigner can enter Serbia with a valid identity card of the country of origin, he can also apply for temporary residence in Serbia with that document that must be valid for at least three months longer than the period for which the temporary residence permit is requested.

Unique work permit: For foreigners who intend to apply for temporary residence based on work, a single work permit has been provided, which will include both a temporary residence permit and a work permit. This change is planned to enter into force on February 1st 2024. Also, the law foresees that even foreigners who have been granted temporary residence or permanent residence in Serbia will have the right to work without a single work permit.

Permanent residence: After 3 years of continuous temporary residence in Serbia, a foreigner can apply for permanent residence instead of the previous 5 years! The new condition for approval of permanent residence in Serbia that a foreigner must fulfill is: That a person resided continuously for three years in Serbia on the basis of a temporary residence permit and that a person has not been absent from Serbia more than once for a total of 10 months or once for 6 months in a period of 3 years.

Just send your question and we will get back with the proper information in short time!

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Electronic registration of companies in Serbia

From May 17th 2023, the registration application for the establishment of a business company, namely a limited liability company (DOO), a joint stock company (AD), a limited partnership (KD) and a partnership (OD) can be submitted to the Serbian Business Registers Agency (SBRA) EXCLUSIVELY BY ELECTRONIC WAY.

For eRegistration of the establishment of a business company (single and a multi-member), the applicant must have:

  • qualified electronic certificate (electronic signature) issued by a certification body in the Republic of Serbia,
  • installed electronic card reader and installed NexU electronic signature application. The NexU application was designed by the SBRA and can serve the user to create all future electronic documents, invoices, etc. Its download from the SBRA site is free,
  • Visa, MasterCard or Dina payment cards to pay the fee.

The electronic signature is used for signing the electronic registration application, but also for signing documents that can be attached to the electronic application.

When you decide to register a company in Serbia, please contact us and we will guide you through all the steps, including, but not limited to following procedures:

  • organizing of obtaining qualified electronic certificate,
  • collecting required documentation on founders,
  • name reservation,
  • preparing Incorporation act,
  • signing with electronic certificate,
  • help in paying SBRA taxes,
  • submitting registration application and collecting the SBRA Decision on registration as well as
  • setting-up bank accounts and
  • complete accounting, tax and legal support after successful registration.

Just send your question and we will get back with the proper information in short time!

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Government incentives for employment in Serbia

On 16th June 2022, the Government of the Republic of Serbia adopted the Decree on Criteria for Awarding Incentives to Employers Employing Newly Registered Residents in the Republic of Serbia, which is an important measure for adapting employers to new business conditions.

The incentive will cover 70% of the calculated and paid payroll tax for one or more employees and 100% of the calculated and paid contributions for mandatory pension and disability insurance for next 5 years.

The conditions for applying for the incentive are:

  • the employment of those foreigners whose profession/job profile lacks in the domestic labor market,
  • foreigners with which the employer concluded an employment contract for an indefinite period of time with full-time employment with basic monthly salary higher than 300,000 dinars (approx. 1800 EUR net).
  • foreigners have not spent more than 180 days in Serbia in the last two years from the date which precedes the day of concluding the employment contract with the employer
  • foreigner has to be employed by 31st December 2023, the latest

Additional conditions for receiving incentive:

  • Foreigner has to be continuously employed by the employer in the period between the day of application and December 31 of the year in which the application was submitted
  • Employer has to hire a certified auditor to check salary calculation once per year and prepare a Report
  • Employer in the period from the submission of the first application and ending with the end of the calendar year in which he receives the last payment of incentives, cannot pays dividends, except dividend or profit paid from the part of profit higher than the amount received on behalf of incentives;
  • The right to receive incentives is exercised by an employer whose number of full-time employees on the day of submission of the application for incentives (hereinafter: application) is the same or greater than the number of full-time employees on the day of entry into force of this Decree increased by the number of foreigners for which he applies. This means that Employer cannot decrease number of full-time employees on the day of application (e.g. Sep 15th earliest) each year comparing to number of full-time employees on the day of entry into force of this Decree.
  • Employers who already receive state aid unless the right to the state aid expires by July 1 this year will not be entitled to this incentive. Furthermore, those employers who already have the right to reduce the salary tax base in accordance with the Law on Income Tax will not be able to count on this incentive.
  • Application has to be submitted between September 15 and September 30 each year for the payment of incentives for previous 12 months
  • Deadline for adopting the application by the institution in charge is 120 days from the 30th September each year.
  • Payment of incentives can be expected in additional 45 days from the above deadline for adopting the application.

Approximately, on net salary of 1800 EUR, you will be able to get back cca 800 EUR of paid tax and contributions for one employee, so the salary expenses will decrease to the level of cca 20%.

We can organize/perform all the required procedures for applying for incentives each year.

Just send your question and we will get back with the proper information in short time!

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