At present, Serbia, a small country in Southeastern Europe, wants to join the EU. This appeals to multiple foreign investors who want its citizenship. The reason is simple: Serbia lets them get a legal residence permit in just one month by registering a company or a branch there, which can lead to Serbian citizenship later. The time it takes depends on your goals and whether you have access to qualified professional assistance. However, the idea of obtaining a residence permit in Serbia well deserves your attention because registering a company in this jurisdiction will give you access to a supportive business environment, low-cost skilled workers, alongside various incentives and support programs.
Business environment
Serbia boasts a market-oriented economy with a welcoming attitude towards foreign trade and investment, which demonstrates considerable advancements in its business environment. Highlighting the country’s attractiveness to investors, the World Bank’s Doing Business 2020 report positioned Serbia at 44th out of 190 economies. Simplified procedures for commencing businesses, acquiring construction permits, tax payment, contract enforcement, and insolvency resolution further simplify and speed up the investment process. What is more, Serbia successfully maintains a stable currency, efficient banking infrastructure, and low inflation rate, reinforcing its appeal as a favorable investment destination.
Serbia has signed free trade agreements with the European Union, Turkey, and several other countries. These treaties grant their parties preferential access to a market of over 1 billion consumers. A candidate for EU membership, Serbia is expected to join the bloc by 2025, which will further boost its already high attractiveness.
Tax residence
Serbia’s favorable tax regime offers various advantages for foreign investors and entrepreneurs who intend to register a company there. Its corporate income tax rate of 15% is among the most competitive in Europe. Besides, tax incentives including exemptions and deductions are available for investments in research and development, innovation, education, and employment. The value-added tax (VAT) rate stands at 20%, with a reduced rate of 10% applicable to select goods and services. Personal income tax is currently set at 10%, with a progressive scale for individuals with higher incomes.
In addition to its competitive tax rates, Serbia boasts a network of 62 double taxation treaties designed to prevent income from being taxed twice across different jurisdictions. This in turn offers further benefits for investors. Notably, Serbia exempts dividends, interest, royalties, and fees paid to non-residents from withholding tax, except for those that originate from blacklisted nations. Moreover, the nation lacks controlled foreign company (CFC) rules, ensuring that income from foreign subsidiaries is not taxed in the jurisdiction until it is distributed, enhancing its attractiveness for international businesses.
Legal residence
Serbia comes with various opportunities for foreign investors and entrepreneurs seeking legal residence in the country. One of them involves registering a company, and this procedure can be completed swiftly and with minimum capital requirements. Whether they opt for a limited liability company (LLC), a joint-stock company (JSC), a branch, or a representative office, the above registration enables both owners and employees to apply for a temporary residence permit, valid for up to one year and renewable annually. This permit affords its holders the privileges to reside, work, and travel within Serbia, alongside access to public services and benefits. Basically, it is a comprehensive solution for those looking to establish themselves in the jurisdiction.
Following five years of uninterrupted legal residence in Serbia, foreign investors or entrepreneurs are eligible to apply for a permanent residence permit. It is valid indefinitely and doesn’t require any renewal. This permit gives individuals the same rights and responsibilities that Serbian citizens enjoy, except for voting and the privilege of holding public office. After a decade of legal residence in Serbia, these investors or entrepreneurs have the right to pursue Serbian citizenship, granting them voting rights, eligibility for public office, as well as the right to obtain a Serbian passport. Please note that the Serbian passport is ranked 39th in the world according to the Henley Passport Index. This allows visa-free or visa-on-arrival access to 134 destinations, underscoring the benefits that come with citizenship acquisition in Serbia.
Incentives and support programs
Serbia offers comprehensive support and incentives to foreign investors and entrepreneurs who choose to register companies within its borders. These initiatives come with a variety of benefits, including cash grants allocated to greenfield and brownfield investments, with amounts ranging from EUR 3,000 to EUR 10,000 per new job created. The exact amount depends on such factors as your sector, location, and investment scale. Note that subsidized loans tailored for small and medium-sized enterprises (SMEs) offer favorable interest rates ranging from 1% to 3%, coupled with flexible repayment periods that span from 3 to 10 years. Tax credits are also available for investments in fixed assets, and they range from 10% to 80% of the investment value, with variations based on sector, location, and investment size. Furthermore, free zones that the country boasts provide an advantageous environment for business development and expansion, with their exemptions from customs duties, value-added tax (VAT), and corporate income tax granted to companies within their borders.
We can’t help but mention that Serbia facilitates innovation and technological advancement through its innovation fund, which offers grants and co-financing opportunities for pioneering projects, startups, and technology transfer endeavors. Complementing these initiatives, the national development agency is ready to offer guidance and support to foreign investors who aim to establish or expand their business presence in Serbia. Together, these measures underscore Serbia’s commitment to creating and promoting a favorable environment for economic growth and international business development.
Undoubtedly, Serbian company registration enhances the legal and tax status of business owners. As of 2024, this country offers numerous advantages for foreign entrepreneurs and investors willing to establish their legal and tax residence there. Would you like to be one of their number and benefit from the tempting possibilities that lie in front of you? If Serbia is the region you are interested in as a business person, contact International Wealth and speak to our seasoned experts to discover more details on how to get a legal residence in Serbia by registering a company there. For that purpose, you are welcome to use any contacts available to you on the International Wealth website.
