Your guide to doing business in Serbia
Serbia is a gateway to central and south-eastern Europe, landlocked by several neighbours including Croatia, Hungary, Romania and Bulgaria. Having emerged from the global crisis, Serbia’s economic outlook has been improving steadily - helped by government support for local and international entrepreneurs interested in investing the country. Serbia’s economic growth has trended upwards, from -3.1% in 2009, to 3.5% in Q1 2016 - while its GDP has also trended positively, reaching $37.75 billion in 2016. An emerging market economy, Serbia’s leading sectors include financial services, energy, IT and communications, agriculture, and oil and gas. As part of its commitment to stimulating investment, the government has introduced a number of economic reforms, and incentives like government grants, tax relief, and free trade zones. Serbia is a member of the United Nations, the OSCE, and CEFTA, and is in negotiations to join the European Union and the WTO. The World Bank ranked Serbia 48 on its Ease of Doing Business Survey 2018.
Why invest in Serbia?
Investors interested in Serbia should consider the following factors:
The Serbian Government welcomes inward investment, with an array of incentives to attract investors in key future industries for the economy.
The company should register with the Pension Insurance Fund, Business Registers Agency and Tax Administration. The key legislative authorities in Serbia is the Republic Tax Administration, Belgrade, Save Maskovic Street.
In Serbia, it is mandatory to make payments to employees and authorities from an in-country bank account in RSD.
Generally, banks are open from 0800 to 1700 hours Monday to Friday and 0900 to 1300 hours on Saturdays. Only some designated banks are open on Sundays.
The working week in Serbia is Monday to Friday. The general working hours for commercial offices in Serbia is between 0900 and 1700 hours.
The territory which became Serbia lies in the heart of southeastern Europe, and was first settled by the Slavs in the 6th century. Over the following centuries, Serbia was inhabited and governed by a variety of powers, and became part of the Ottoman Empire in the 15th century. In 1830, a revolution led to the establishment of the Principality of Serbia, and membership of the Austro-Hungarian Empire - before the country became part of Yugoslavia in 1918. After the turbulent dissolution of Yugoslavia in the late 20th century, Serbia became an independent republic and took steps to join the wider international community: today, the country is member-state of numerous global organisations, and is in the process of joining the European Union. Serbia is a mountainous country with numerous fertile agricultural regions, and enjoys a temperate continental climate throughout the year.
Full Name: Republic of Serbia
Population: 7.12 million (UN, 2017, Kosovo is not included)
Primary Language: Serbian
Main Religion: Christianity
Monetary Unit: Dinar
Main Exports: Manufactured goods, food and live animals, machinery and transport equipment.
Internet domain: .rs
International Dialing Code: +381
Good morning Добро Јутро
Good evening Добро Вече
Do you speak English? Да Ли Говорите Енглески?
Good bye Збогом
Thank you Хвала
See you later Видимо Се Касније
The date is written in the format (date/month/year) for example 1 July 2015 is 1/07/15.
Numbers are written with a comma to denote fractions, for example RSD 150 000,75
The Tax Year in Serbia runs from 1st January to 31st December.
The percentages are the same for both employer and employee.
The key legislative authorities in Serbia are the Republic Tax Administration.
Payroll providers do not need to be licenced to make any tax or social security fillings on behalf of their client in Serbia.
Annual individual’s income tax is collected from resident individuals, including foreign nationals with a residency status, whose income for the calendar year under review exceeds the sum of three average annual salaries per employee disbursed in Serbia in the year for which tax is assessed, using the statistical data of the relevant state institute.
If the net income of a taxpayer is between RSD 2,470,644.00 and RSD 4,941,288.00, a 10% tax on income is levied. On the annual income above RSD 4,941,288.00 a 15% tax rate is charged.
A taxpayer of annual income tax is entitled to a personal allowance of RSD 329,419.00 for himself/herself and RSD 123,532.00 for any of his/her dependent family members. The tax-free amount cannot exceed 50% of the person's taxable income.
The deadline for the submission of annual income tax returns is usually is 15 May.
Monthly income tax contributions are paid on the 30th of current month.
The penalty for late payment ranges from RSD 100.000.00 up to RSD 2,000,000.00.
Monthly social security contributions are paid on the 30th of the current month for the previous month.
The penalty for late payment ranges from RSD 100.000.00 up to RSD 2.000.000.00
Micro entities or small companies that employ at least 2 workers and started operating after 31stOctober 2015 will be eligible for a refund of up to 75% of the taxes and contributions paid until 31st December 2017 on behalf of their newly employed workers.
These forms are required to report paid taxes and social insurance (on a monthly and annual basis)
The deadline for M4 from is 30th April for the previous year
The deadline for PPP-PO form is 31st January for the previous year. These forms are issued to employees and are used for the calculation of the annual income tax.
All documents are to be sent to the Tax Administration and can be submitted by the client or by a partner. It is mandatory for the forms to be signed by the client.
New starts have to be registered with Pension and Insurance Fund and Health Insurance. The deadline for new starts to be registered with the authorities in Serbia is one month from the beginning of their employment.
For setting up a New Start the details required include:
All dues to a Leaver have to be affected within 30 days from Termination of the Employment Agreement.
A leaver in Serbia must be de-registered from Health and Pension Insurance Funds.
Employers in Serbia must withhold employees’ income tax at source as part of the payroll process. The payroll process must take employee residency into account - that is, residents are taxed on income earned worldwide, while non-residents are taxed only on income earned within Serbia.
The personal income tax rate in Serbia is 10% for income up to RSD 4,570,128,00. An additional 15% is charged on income above that threshold.
Social security contributions must also be withheld during the payroll process. Social security in Serbia includes pension funds, health insurance, and unemployment insurance - employees must contribute around 30% of their salary, while employers contribute around 17.9%.
Serbia’s payroll landscape involves strict regulations - and foreign businesses operating in the country must be able to navigate the rules, or face compliance penalties. Expatriate organisations operating within Serbia often engage a third-party payroll provider in order to ensure payroll compliance.