The Full Guide to Setting Up a Business Presence in Serbia (2025 Edition)
- Željko Stevanović
- Nov 27
- 7 min read
Updated: 4 days ago
A Professional Overview of Structures, Taxation, Compliance & Practical Steps
Serbia has become one of the most dynamic business destinations in Southeast Europe. With steady economic growth, an increasingly digital public administration system, competitive taxation, and accessible regulatory procedures, the country attracts entrepreneurs, freelancers, and international companies seeking a reliable operational base.
This guide provides a neutral, professional, and advisory overview of the Serbian framework for individuals and businesses considering establishing a presence in the country.
It outlines the two primary formats available to entrepreneurs:
Sole Entrepreneur (Preduzetnik) – including flat-rate (“pauschal”) and bookkeeping models.
Limited Liability Company (DOO) – the standard corporate structure in Serbia.
It also describes the key regulatory steps, tax considerations, and practical aspects relevant to anyone planning to operate in Serbia.
Table Of Contents:
Why Serbia? Key Advantages Compared to Other European Jurisdictions
Serbia offers a balanced combination of low operating costs and strong business infrastructure. Some notable advantages include:
Predictable and Competitive Taxation
Corporate income tax (CIT) rate: 15%, one of the lowest standard rates in Europe.
Personal income tax on entrepreneurs: 10% on taxable profit for bookkeeping entrepreneurs.
Special flat-rate taxation regime where eligible entrepreneurs pay fixed, predefined monthly taxes, often significantly below EU averages for micro-businesses.
Fast, Digitalized Procedures
Full electronic registration system through the Serbian Business Registers Agency (APR).
Electronic invoices, digital signatures, and modern mobile-banking solutions.
Online access to most government services (eTax, eInvoices, eGovernment).
Favorable Costs for Small Businesses
Lower administrative and accounting costs compared to Western Europe.
Affordable labor costs for local teams or support staff.
No minimum capital requirements for entrepreneurs.
Strategic European Location
Access to both EU and non-EU markets.
Growing network of double taxation treaties.
Stable banking environment with strong digital banking solutions.
Entrepreneur (Preduzetnik): The Flexible Option for Individuals
The entrepreneur structure (“preduzetnik”) is designed for individuals who independently carry out a business activity. It is suitable for a wide range of professionals—from freelancers and consultants to online sellers and service providers.
There are two main taxation models:
Flat-Rate Entrepreneur (“Pauschal”)
This model is highly popular among solo professionals.
Key Characteristics
Taxes and contributions are fixed monthly amounts, determined by the tax authorities.
No obligation to maintain double-entry bookkeeping.
Ideal for small operations with predictable income profiles.
Very competitive effective taxation compared to many EU countries.
Typical Advantages
Simplified administration.
Low monthly costs compared to traditional tax systems.
Predictable obligations, regardless of revenue.
Ability to operate online, invoice foreign clients, and use digital banking.
Limitations
Not all activities are eligible (certain sectors are excluded).
Revenue cap applies (updated annually by the Ministry of Finance).
Purely individual structure—cannot accommodate shareholders.
Sole Entrepreneur (with accounting & reporting)
This model is more flexible and suitable for higher income levels.
Key Characteristics
Profit is calculated as revenue minus expenses.
Personal income tax rate: 10% on taxable profit.
Mandatory bookkeeping and accounting.
Full deduction of business expenses (transport, office, equipment, services, etc.).
Advantages
Suitable for businesses with significant operational costs.
No income limit.
Ability to optimize taxable profit through legitimate business expenses.
Considerations
Requires more administrative duties.
Social contributions vary depending on the declared base.
Limited Liability Company (DOO): A Corporate Structure With Strong Protection
The DOO is the preferred form for businesses that require a formal corporate framework, limited liability, or multiple owners.
Key Features
Minimum capital: 100 RSD (less than 1 EUR).
Liability limited to the company’s assets.
Can have one or multiple shareholders.
Can hire employees, issue dividends, and perform commercial activities.
Taxation of a Serbian DOO
Corporate Income Tax (CIT)
Standard rate: 15%.
Dividend Tax
15% withholding tax on dividends paid to individuals.
Reduced rates may apply under double tax treaties.
Additional Considerations
Possibility of reinvesting profits into business operations.
Deductible expenses include salaries, rent, software, marketing, professional fees, etc.
VAT registration mandatory at 8M RSD annual turnover.
Compared to Western Europe, Serbian CIT and labor costs are significantly lower, making DOO a cost-efficient structure for regional operations.
Full Overview: The Process of Establishing a Business Presence in Serbia
This section outlines the typical procedural steps, from preparation to post-registration obligations. Please note: the following describes the general regulatory framework; professional advisory guidance is often useful for navigating these stages.
Preparation Phase
Before initiating any filing with the authorities, an individual or company should:
Define the intended business activity (NKD activity code).
Choose between entrepreneur vs. DOO structure.
Determine taxation model (flat-rate, bookkeeping, CIT).
Select a business address.
Prepare identity documents and, where required, translated materials.
Obtain a qualified electronic signature (required for most filings).
Professional advisory assistance is often helpful during this phase, especially for selecting the most appropriate structure and tax model.
Registration Procedure (General Overview)
Entrepreneur (Preduzetnik)
Filing an electronic application with APR.
Paying the relevant administrative fee.
Receiving the registration decision electronically.
DOO
Preparation of the Memorandum of Association.
Signing with a qualified electronic signature.
Electronic submission to APR.
Issuance of registration documents.
Registration decisions are typically issued within a few working days.
After Registration: Mandatory Steps
Regardless of the structure, several obligations follow:
Tax Registration (PIB)
Automatic through APR, but additional filings may apply depending on the activity.
Bank Account Opening
Local banks require standard KYC documentation and conduct risk assessment according to AML rules.
e-Invoicing System (SEF)
All registered entities must use Serbia’s centralized electronic invoicing platform.
Accounting & Compliance
Depending on the structure:
Flat-rate entrepreneurs have simplified obligations.
Bookkeeping entrepreneurs and DOO require regular financial records.
Annual balance sheets and reports must be submitted.
VAT Considerations
Mandatory registration above the turnover threshold.
Option for voluntary registration if beneficial.
Serbia vs. Europe: Comparative Tax Perspective
Serbia’s overall tax framework is notably competitive relative to EU countries:
Country | Corporate Tax | Entrepreneur Tax (approx.) | Social Contributions | Administrative Burden |
Serbia | 15% | 10% (profit) / flat-rate fixed | Moderate | Low |
Germany | 30–33% | Progressive | High | High |
France | 25% | Progressive | High | High |
Italy | ~24% + regional taxes | Progressive | High | Medium |
Netherlands | 19–25.8% | Progressive | Moderate-High | Medium |
Serbia stands out with a blend of low CIT, flexible entrepreneur taxation, and significantly reduced compliance costs.
When to Consider Professional Advisory Support
Because Serbian regulations involve tax rules, reporting requirements, and industry-specific conditions, many individuals and companies choose to consult with professionals regarding:
Selection of appropriate structure (entrepreneur vs. DOO)
Tax modeling and financial projections
Compliance with VAT and electronic invoicing rules
Cross-border transactions and double taxation treaty analysis
Payroll obligations and local employment regulations
Long-term optimization and business planning
Advisory support ensures correct alignment between business goals and Serbian regulatory requirements.
Final Thoughts
Serbia offers a stable, modern, and efficient environment for individuals and companies seeking to operate in Southeast Europe. Its combination of transparent procedures, competitive taxation, digital public administration, and favorable costs makes it an appealing jurisdiction for entrepreneurs, consultants, and internationally active businesses.
Understanding the differences between flat-rate entrepreneurship, bookkeeping entrepreneurship, and limited liability companies (DOO) is essential for making an informed decision. Each structure provides unique advantages and regulatory obligations.
A well-planned approach—supported by expert consultation where needed—ensures a smooth and compliant establishment process and sustainable business operations in Serbia.
FAQ
Can foreigners open a company in Serbia?
Yes. Foreigners can own 100% of a Serbian company. There are no nationality restrictions for shareholders or founders.
Do I need to live in Serbia to run a company?
No. A Serbian company can be managed remotely. Physical presence is usually required only for:
Opening a bank account (in some cases)
Signing certain documents
What legal forms are available in Serbia?
The most common forms are:
LLC (DOO) – the most popular choice
Sole Proprietor (Entrepreneur / Preduzetnik) – often used by freelancers
DOO is preferred for scalability and credibility.
What is the minimum share capital?
For a DOO:
Minimum capital: 1 EUR (or RSD equivalent)
Is a local director required?
No. A director can be a foreign individual. However, the company must have:
A registered address in Serbia
Local accounting and tax compliance
What taxes does a Serbian company pay?
Key taxes include:
Corporate Income Tax: 15%
Dividend Withholding Tax: 15%
VAT: 20% (standard rate)
Reduced VAT: 10% (certain goods/services)
Serbia offers one of the lowest corporate tax rates in Europe.
Is Serbia suitable for freelancers and digital entrepreneurs?
Yes. Serbia is very attractive due to:
Flat-rate taxation regimes for entrepreneurs
Predictable monthly tax costs
Favorable treatment of foreign income (depending on structure)
What is the “flat tax” regime for entrepreneurs?
Entrepreneurs can choose lump-sum (flat-rate) taxation, meaning:
Fixed monthly taxes and contributions
No obligation to submit annual profit calculations
Very popular among freelancers and consultants
Can a Serbian company invoice foreign clients?
Yes. Serbian companies regularly invoice:
EU and non-EU clients
SaaS, IT, consulting, agency, and e-commerce services
Foreign currency invoicing is allowed.
Is VAT registration mandatory?
VAT registration is:
Mandatory above ~8 million RSD annual turnover
Optional below the threshold, depending on business model
Does Serbia tax worldwide income?
Yes, but tax treaties and structuring options often reduce or eliminate double taxation. Serbia has 60+ double tax treaties.
Are there incentives for IT and innovative companies?
Yes. Serbia offers:
R&D tax incentives
IP box regime (reduced tax on qualifying IP income)
Payroll tax relief for innovative activities
Is accounting mandatory in Serbia?
Yes, except for flat rate regime entrepreneurs (paushcal). All companies must have licensed local accountants. Accounting, payroll, tax filings, and annual financial statements are mandatory.
Is audit mandatory?
Audit is required only if certain size thresholds are exceeded (revenue, assets, employees).
Most small and medium companies do not need an audit.
How long does company registration take?
Typically:
Company incorporation: 5–10 working days
Bank account opening: 1–3 weeks
What documents are needed to register a company?
Usually:
Passport copy
Proof of address
Company name and activity
Director & shareholder details
Can a Serbian company employ foreigners?
Yes. Foreign employees can be hired, but:
Work and residence permits are required
Serbia has simplified procedures for IT professionals
Can profits be repatriated abroad?
Yes. Profits can be freely transferred abroad after:
Paying corporate tax
Withholding tax on dividends (if applicable)
Is Serbia a good alternative to Western Europe?
Yes. Serbia offers:
Lower taxes
Lower operating costs
Skilled workforce
EU-access without EU-level tax burden
Can you help with full setup and ongoing compliance?
Yes. A full-service provider can handle:
Company formation
Accounting & payroll
Tax optimization
VAT & reporting
Banking and compliance support
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