Serbia is located in the central part of the Balkan in the southeastern part of Europe. Belgrade with a population of 7 million is the economic and cultural heart of Serbia. It is a parliamentary republic and its monetary unit is the Dinar. Serbia received its full candidate status to join the European Union in March 2012. The European Commission considers accession to be possible by 2025.

Legal system

The legal system in the Republic of Serbia is based on the system of codified, ie. written norms that regulate the sphere of public and private life in the Republic of Serbia and belongs to the European-continental legal system. Amongst others, it consists of the Constitution of the Republic of Serbia adopted in 2006, as the highest and most important legal act, as well as the entire system of laws that regulate all areas of social life in the Republic of Serbia. The basis for the regulation of obligatory relations arising from contracts, causing damage, acquisition without grounds, management without orders, unilateral declaration of will, and other facts established by law is certainly the Law on Obligations. The Law on Civil Procedure regulates the rules of procedure for providing judicial legal protection, which is used and decided in litigations for resolving disputes arising from violations of personal rights and disputes from family, labor, economic, property, and other civil relations. On the other hand, the basis of criminal legislation in the Republic of Serbia is the Criminal Code and the Criminal Procedure Code.


The economy of the Republic of Serbia is organized according to the free-market model. The largest sector of the economy of the Republic of Serbia is the services sector, followed by the industrial sector and the agricultural sector. The economy of the Republic of Serbia consists of the following economic branches: banking and insurance, car industry, wood industry, energy, construction industry, chemistry, pharmacy, rubber and non-metals, trade, tourism, and catering.

Regarding the foreign trade exchange of goods, the Republic of Serbia mostly conducts foreign trade exchanges with the Member States of the European Union.

Business of Foreign Persons

The Republic of Serbia represents a favorable location for business development and the establishment of various forms of companies. A foreign citizen may register as an entrepreneur in the Republic of Serbia, under the same conditions as a domestic citizen. Additionally, foreign natural persons and foreign legal entities may establish companies in the Republic of Serbia. All companies are registered by the Business Registers Agency, which contains all registered data. The current Law on Companies prescribes the possibility of establishing four forms of companies – partnership, limited partnership, limited liability company, and joint-stock company, with the most common form being a limited liability company. The whole procedure of registration of a limited liability company does not last more than five working days. The minimum share capital for a limited liability company is 100,00 RSD (app. 1 EUR). The presence of the founder during an establishment procedure is not necessary, which means that the limited liability company may be established on the basis of a certified Power of Attorney.

Furthermore, in the Republic of Serbia, foreign companies may establish their branches, as well as representative offices. The branch, as well as the representative office, are established on the basis of the decision of the competent body, after which the registration by the Business Registers Agency is carried out.


The corporate income tax rate in Serbia is unique and amounts to 15 %. Both resident taxpayers (companies established in the Republic of Serbia, or companies whose place of actual management and control is in the territory of the Republic of Serbia) and non-resident taxpayers (the place of actual management and control of which is not in the territory of Serbia, but already making a profit through a permanent establishment in Serbia),  are subject to income taxation in the Republic of Serbia, where non-resident taxpayers are subject to taxation of profits made exclusively in the territory of Serbia.

Regarding personal income, in the Republic of Serbia there are the following types of personal income that are subject to taxation:

  • salary;
  • income from self-employment (eg. provision of professional services);
  • income from copyrights, rights related to copyright and industrial property rights;
  • capital income (eg. interest and dividends);
  • income from renting real estate and movable property;
  • capital gains;
  • any other type of personal income (eg. gambling income).

The tax rate and tax base depend on the type of income that is taxed, but they typically range from 10 % to 20 %. For instance, the salary tax rate is 10 %, the capital gains tax rate is 15 %, and the tax rate on capital income is 15 %.

Value-added tax (VAT) is calculated by taking into account the supply of goods and services performed in Serbia, as well as by the import of goods and services. In the event that a foreign entity sells goods and services in Serbia to persons who are not VAT payers (eg. other foreign entities that are not registered in the VAT system in Serbia), it is obligated to register in the VAT system through a tax representative. The tax representative may be a Serbian natural person or a company that meets certain criteria. The general VAT rate is 20 %, while a special rate of 10 % is used for certain goods (mainly for basic needs, such as bread, milk, eggs, medicines, etc.). The threshold for mandatory registration in the VAT system is a total sale of RSD 8,000,000 (approximately EUR 60,000) in the previous 12 months.

Labour law

The field of labour law in the Republic of Serbia is regulated primarily by the Labour Law, but also by special laws that regulate mandatory social contributions whose taxpayer is the employer. The relationship between the employer and the employee is regulated by the employment agreement, which must be in accordance with the Labour Law. This means that the Labour Law prescribes the minimum conditions that each employment agreement must meet, and employers may improve these conditions through employment agreements and internal acts, all within the framework of the Labour Law.

The Labour Law protects employees with its norms, prescribing the basic rights of employees while emphasizing the principle of non-discrimination. Special categories of employees, such as pregnant women, minors, and people with disabilities, enjoy special protection.

Special protection of employees is provided by the Labor Law in the area of ​​termination of employment, especially when it comes to the termination of the employment agreement by the employer. By prescribing a special procedure that must be followed in any case, the space for illegal actions of the employer in this area has been reduced. In any case, an employee who has been terminated illegally has the right to request a return to work in court proceedings, as well as compensation for damages.

Members of our network:

Attorney at law Damir Petrović

Attorney at Law Stefan Mojsic