In this circle of our legal blogs #StartYourBusiness, we strive to provide essential information on commencing business operations in the Republic of Serbia.
When deciding on the most suitable organizational structure for conducting business operations in Serbia, investors frequently opt for the limited liability company, referred to as “društvo sa ograničenom odgovornošću” in Serbian. What makes limited liability company such attractive choice for business?
As per legal definition, a limited liability company is an entity in which one or more shareholders hold shares in the company’s share capital, with key provision that shareholders are not personally liable for the company’s obligations, except in circumstances expressly outlined by law.
From definition itself, we can distinguish two substantial elements of ltd:
- Share capital is divided into shares;
- Shareholders are not liable (with their personal property) for obligations of the company.
Not only limited liability of shareholders makes this form of organization so attractive, but also low costs of incorporation, symbolic amount of mandatory share capital and quite simple procedure of registration.
In this text we have summarized frequently asked questions concerning process of incorporation of an LTD in Serbia.
1. When is the company considered as established?
Company is established once the Serbian Business Registers Agency (SBRA) passes a decision on registration and enter data on company into Registry of Companies. As of this date, company gains Its legal capacity, i.e. it becomes subject of rights and duties in legal transactions.
2. What is minimal share capital? Does it have to be paid prior to establishing? What kind of share capital is allowed?
- Minimal share capital amounts to 100,00 RSD ( < 1.00 EUR).
- It does not have to be paid in immediately with establishing, but within 5 years upon company’s registration, unless shorter period is determined by Articles of Association.
- Share capital can be both monetary and non-monetary (properties, IP rights, movables etc.) but not in
3. What are the limitations of business name?
Business name is determined by Memorandum of Association and has three mandatory parts:
- Company’s name, which represents characteristic part of the business name and it differentiates company from other companies; certain limitations apply when using names of foreign states, international organizations or word Serbia and its abbreviation SRB.
- Legal form – društvo sa ograničenom odgovornošću or its abbreviated form d.o.o.
- Place of company’s seat.
4. Which address is considered as suitable company’s seat?
Company’s seat must be at the address in the territory of the Republic in Serbia, which is already existing and duly registered at official Address Registry, kept by Republic Geodetic Service of Republic of Serbia.
5. Can the process of establishing LTD be done online, i.e. without further presence of shareholders?
Yes, establishing of NewCo can be conducted online without personal presence of shareholders in Serbia. In addition, as of May 2023, the application for company’s registration is submitted exclusively online, if applicant holds valid qualified electronic signature issued in Serbia.
6. What documentation is needed for incorporation of company? In which form it must be submitted?
The answer depends on whether the company is established by individual(s) or legal entity(s) and whether the company is established by one or more shareholders.
Usually, application form for registration submitted to SBRA is accompanied by notarized Memorandum of Association, documents proving identity of shareholder(s) and Power of Attorney, if incorporation is conducted by lawyer. In order to be used in the Republic of Serbia, documents issued or notarized by foreign authorities must be followed by appropriate legalization form, depending on the country of issuing such document(s).
In addition, all documents submitted to SBRA must be translated to Serbian language, by official court translator for respective language.
Besides appropriate notarization, legalization form and translation, all documents must also be digitized (certified) by qualified electronic signature issued in Serbia.
7. Can a foreign citizen be a company’s CEO?
Companies law does not make any distinction regarding citizenship of CEO, so foreign citizens can be appointed as company’s director under same conditions applicable to Serbian citizens.
8. Can the bank accounts be opened remotely as well?
Yes, bank account may be opened without any further presence of CEO or shareholders.
9. What is the cost of opening a company?
The official fees for establishment of LTD before SBRA amount appx. 50.00 EUR.
Besides official fees, on the top are translation and notarizations costs and lawyers’ fees, if the process is conducted by lawyer.
10. How long does the process take?
It takes up to 5 working days, upon filing complete application form, accompanied by all necessary documentation.
In our legal blog #StartYourBusiness Post incorporation steps in Serbia – what now? Here you can read more about legal requirements and deadlines after the company is established.
