UK: Business Start Up in Serbia - Registration

Last Updated: 13 July 2006
Article by Vladimir VM Markovic

Considering all trends related to investments in Serbia, along with its positive and negative aspects, it can be said that investment climate in Serbia is changed and more than interesting area for setting up a business.

After such decision the following framework must be taken in consideration.

The Serbian Business Registration agency was established in 2005, taking over the process of registering businesses from the commercial courts. By the establishment of the Agency, registration procedure was simplified and the registration time was reduced from previous 51 to only 10 days. The agency has been designed to provide centralized electronic database of all business entities and their contracts on financial leasing and pledges. The register will be maintained by the Agency for Business Registrations. The process of registration begins with applying for a registration to this agency. The applicant can be the founder of the business entity or his legally designated representative, and he can apply on paper or electronically.

A representative office in Serbia may be opened by:

  • one or more foreign individuals engaged in an economic or banking/financial activity and/or insurance;
  • any national or international organization whose members are foreign persons engaged in business operations;
  • any national or international organization working towards the advancement of trade with Serbia.

A representative office shall not have the status of a legal entity and it may have one or more branches in Serbia.

A representative office may not be opened in the field of armaments and military equipment.

The activities that a representative office may engage in are:

  • surveying the market and performing operations preliminary and preparatory to the execution of contracts on the import of foreign and/or export of Serbian goods and services;
  • the execution of contracts and imports contributing to the advancement and expansion of Serbian manufacturing;
  • the execution of contracts relating to long-term co-production or commercial and technical cooperation;
  • surveying the financial/banking market;
  • establishing business terms with domestic insurance organizations or enterprises;
  • performing air-transport agency operations

Seting up a business

Types of companies

In according with the Legal framework following types of companies can be opened:
General partnership (o. d.); Limited partnership (k. d.); Limited liability company (d. o. o.); Joint-stock company (a. d.)

General Partnerships

Partners: 2 or more.

Characteristics:
There are no requirements for minimum or maximum contributions of paid-in capital. In a general partnership all the partners may contribute in cash, property, rights, labor or services. All partners bear unlimited liability for the obligations of the general partnership. In a limited partnership there must be at least one general partner who must be an individual and is fully liable for the obligations of the partnership and at least one limited partner-a legal entity or an individual, whose liability is limited to the amount of his contribution. The contribution of the limited partner may not include labor and services.

Limited liability company

Shareholders:
up to 50.
Minimum capital:
$500 (in CSD equivalent).
Share and contribution requirements:
The initial contribution of each partner may not be less than the CSD equivalent of USD 500. Contributions may be smaller only in the case that company shareholders acquire shares under privileged terms in conformity with special regulations. Shares are freely transferable between the partners. A share may be transferred to a third party, in which case other shareholders of the company and the company itself have pre-emptive rights.

Company management:
Decisions are made by majority vote in the company's general meeting. The partners each have a number of votes that is in proportion to their contribution unless provided for otherwise in the company's articles of incorporation. The provisions of the Enterprise Law that concern the board of directors and the director, the executive board of directors and the supervisory board of a joint-stock company also apply to the management of a limited liability company.

Joint-stock company

Shareholders:
1 or more for companies incorporated simultaneously, and 2 or more for companies incorporated successively.
Minimum capital:
€ 10,000 in CSD equivalent for closed joint stock companies (with maximum 100 shareholders) and € 25,000 for open joint stock company (unlimited number of shareholders).
Share and contribution requirements:

Par value may not be less than the CSD equivalent of USD 5. The initial contribution of each shareholder may not be less than the CSD equivalent of USD 500. Contributions may be smaller only in the case that shareholders buy shares under privileged terms pursuant to law.
Company management:
The shareholders' general meeting is the main decision-making body. A managing director leads the company's management. The general meeting may appoint a board of directors and a supervisory board, both consisting of at least 3 members. The articles of incorporation may also provide for the election of an executive board of directors - a back-up executive body that supervises the managing director. Members of the executive board may be elected as members of the board of directors as long as their number does not exceed one third of the total membership of the board of directors. There are no citizenship requirements for members of the managing bodies.

Specific features: Companies with more than 100 employees must appoint a managing board and a supervisory board. There are higher minimum capital requirements for joint-stock companies acting as:

  • Banks:
    € 10,000,000 (in CSD)
  • Insurance companies:
  • Life insurance except voluntary pension insurance: € 2,000,000 in CSD
  • Voluntary pension insurance: € 3,000,000 in CSD;
  • All types of life insurance: € 4,000,000 in CSD

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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