Blog

Year after year, the Republic of Serbia attracts an increasing number of foreign investors who decide to start new business ventures here. Far lower tax rates than in developed European countries, a skilled workforce, as well as an ever-improving road infrastructure, made new companies spring up like mushrooms after the rain.

The increased interest of foreign investors in the local market has led to significant changes in the legal framework that goes in the direction of simplifying procedures. Namely, during the last year, amendments were made to the by-laws in the area of company formation in Serbia, which introduced the model of electronic establishment as mandatory. All existing forms of business companies, namely: Limited Liability Company (LLC), Joint Stock Company (JSC), Limited Liability Partnership (LLP) and Partnership Company (PC) must be established electronically – by submitting an electronic application for incorporation.

LLC COMPANY FORMATION IN SERBIA

The Limited Liability Company (LLC) is the most common legal form in which business companies are established in Serbia. The reason for this should be primarily sought in the fact that with this legal form, the founders are limited in their liability for the company’s obligations, at most up to the value of the entered capital contribution. Therefore, the unlimited liability of the founder with the entire property is excluded here, as is the case with entrepreneurs. In addition, almost any business activity can be carried out in the form of a limited liability company, which means that they cover the widest range of businesses – from micro to large ones.

Future founders of LLCs in Serbia are faced with the initial imperative of choosing a business name, registered office address, registered activity, amount of capital contribution, amount of share capital, legal representative, etc. The cornerstone of every newly founded LLC is the Memorandum of Association, which is mandatory in the founding process. The Memorandum of Association is adopted by the founder of the LLC, and it can be in the form of – Decision on Incorporation (in the case of a single-member LLC) and Articles of Incorporation (in the case of a multi-member LLC). The content of the Memorandum of Association is prescribed in detail by the Law on Business Companies.

When choosing the business name of the LLC, you must take into account that the name must not be the same as the name of an already established LLC, because in that case the application for formation will be rejected. When it comes to the capital contribution, the Law stipulates that the monetary contribution can be at least 100 dinars (slightly less than 1 euro), and the same can be paid within 5 years. LLC is represented by one or more directors who may also be foreign citizens.

ELECTRONIC FORMATION OF AN LLC

An application for formation an LLC can be submitted by foreign citizens who possess a qualified electronic signature issued by one of the certification bodies in Serbia. All documents that are submitted in the LLC establishment procedure must be properly digitized (converted into the form of an electronic document) and electronically signed. Considering that foreigners very often want to avoid coming to Serbia even at this initial stage, giving a Special Power of Attorney to a lawyer who is authorized to submit an application for the electronic formation of an LLC appears as a possibility. Namely, in addition to notaries, lawyers are authorized to digitize (convert into the form of an electronic document) and electronically sign every document in the LLC establishment procedure.

The Agency for Business Registers of the Republic of Serbia makes a decision on the request for the establishment of an LLC within 5 working days. If the application for establishment is approved, the decision will be delivered in the form of an electronic document to the email of the applicant, which means that the same does not have to be collected in person.

For more questions about this, as well as other questions from the domain of commercial law, it is best to contact a lawyer.