Register a Company in Serbia to Become a Legal or Tax Resident
A Serbian residence permit is easy to obtain if you have vital interests in the country, and one of the possible ways is to start a business. The country is on the verge of joining the EU, which makes its residence permit very attractive as it leads to receiving citizenship in about 7 years. It means that you may get an EU passport by that time without making extreme efforts or spending exorbitant amounts! Serbia is an excellent choice for business as it offers favorable laws, European-quality banking at much lower prices than on average in Europe, and a beneficial taxation system.
Obtaining Serbian Residency by Company Formation: Main Benefits
Let’s take a look at the main benefits of your decision to set up a business in Serbia:
- Affordable costs of operation. If you look at the Eurostat study focused on prices for consumer electronics, household appliances, furniture, and energy, you will see that Serbia is one of the leaders among 37 participants. New dwellings cost 1,500 euros per square meter on average, while average wages are a little over 630 euros.
- Qualified staff. There are 22 universities in Serbia, and 3 of them are on the global Top 20 list. You will find a great multitude of accredited study programs in the country that are available in Serbian and English. Serbia takes 4th place among 76 countries if we look at the level of business English.
- Duty-free access to markets. You will have access to 1.3 billion potential customers, and you will be able to sell products to them without paying any duties.
- Financial incentives. Serbia offers a lot of tax incentives, such as payroll tax reduction (up to 75% in some cases) and tax breaks for startups. The country is a party to 54 double taxation avoidance agreements concluded with almost all European countries, the UAE, the UK, Canada, Russia, etc. Serbia has created 15 free economic zones, and it is home to hundreds of major international corporations whose turnover equals a few billion dollars a year.
- Political and economic stability. The Serbian government is working hard to provide stable conditions that attract businesses and investors, and it is implementing different programs to improve the efficiency of public institutions, reform the state sector, increase financial responsibility, and reduce state debt.
- Tourism. There are 4 ski resorts and more than 50 world-class resorts and spa facilities.
- Advantageous geographical position. You can easily get to Serbia by car from the majority of European countries. There is a huge Nikola Tesla Airport located within just 20 minutes from Belgrade, the capital of Serbia. You will reach Montenegro within 45 minutes. Athens, Munich, Zurich, Vienna, Rome, Prague, Istanbul, and Bucharest are located within 1.5 hours. Amsterdam, Paris, London, Kyiv, Frankfurt, Dusseldorf, and Berlin are within 2.5 hours. And if you want to get to the Adriatic Sea coast, you will reach it by plane within 45 minutes!
- High-quality education. You will find a lot of international schools in Serbia (French, British, Russian, and American ones). Tuition fees are considerably lower than in similar institutions located in Western Europe. The University of Belgrade which traces its history from 1808 is on the list of the best universities globally. Well, read more to know about some of the best features of international schools.
- Real estate tax. There is no stable rate as it differs depending on the property type and location. However, it usually does not exceed 0.4% of the total cost. You can obtain a tax reduction under certain conditions.
- Favorable taxation. The corporate tax and dividend tax rates equal 15%. The worldwide income you will generate will be taxed using a progressive scale: you will pay zero tax if your income does not exceed 17,999 euros a year; the income ranging between 18,000 and 53,000 euros is taxable at 10%; and if your income is above that, you will have to pay 15%. It is possible to reduce the payable amount by as much as 50%.
- Wealth tax. The good news is that wealth tax equals zero, so it’s a paradise for affluent people!
- VAT. The standard rate is 20%, but it can be reduced in some cases to 10% or even to zero.
- Inheritance and gift tax. It varies between 1.5% and 2.5%. If the property is passed from generation to generation within one family, you can obtain tax reductions.
Requirements for Potential Residence Permit Holders
- You are not required to invest excessive amounts to obtain a residence permit in Serbia. You can set up a small company with just one full-time employee, the founder, and it will be enough.
- If you want to be considered a Serbian tax resident, you will have to reside in the country for most of the year (that is, 183 days), and you can do so continuously or with breaks. You will have to apply for the tax resident’s status separately by providing proof of your stay in Serbia for the required number of days.
- The procedure of obtaining a Serbian residence permit theoretically takes 1 month, but expect to get the document in two months (this is a more realistic term according to feedback). You will need to visit the country once or twice and spend about 14 days there to complete all the formalities. The first residence permit is issued for 6 months, and you can extend it for a year when it expires.
Timelines
Here are the stages you will have to pass:
- Company registration takes 1-3 weeks.
- Next, 3 to 7 days will be required to open a corporate bank account for your company.
- You will get a temporary residence permit (also known as the White Card) valid for 90 days in less than 1 day.
- You will obtain your residence permit in 3 to 4 weeks upon application submission.
- An individual taxpayer number can be obtained in a matter of a few minutes on the condition that you have a residence permit.
- You can become a Serbian tax resident in 6 months.
Interested in acquiring a Serbian residence permit by establishing a local company? You can read more details on the costs involved by following the above link or ask your questions using the live chat.