20 Important Points from the Law on Foreign Exchange Operations and Law on External Business Operations

2019-07-14T22:55:44+02:00 May 7th, 2019|

The Law on Foreign Currency Operations and Law on External Business Operations are among the most important regulations defining the business operations with individuals and legal entities from abroad. Proper interpretation of those regulations and their implementation in everyday activities are the basic elements of the successful existence and competitiveness of the resident individuals and legal entities in Serbia.

  1. A natural person – foreign citizen who resides in the Republic of Serbia on the basis of a residence permit or working visa for more than a year is considered a resident of the Republic of Serbia.
  2. Credit operations, in this sense loans, between residents and non-residents, entail the registration of the same transaction in the procedure of the National Bank of Serbia, by the resident-participant of the transaction. The procedure applies regardless of the legal basis of the relationship between the resident and the non-resident.
  3. Additional payments to the capital of a resident company by a non-resident parent company shall not be considered as credit activity or loan.
  4. A resident may not receive funds, execute a payment or issue a payment order, or transfer funds to a non-resident, on the basis of a contract in which the real price is not stated.
  5. The transfer of ownership in a company between natural persons and legal entities is free, regardless of whether it is a resident or non-resident.
  6. Payment for the acquisition of a resident’s property abroad is done free of charge and without a special control.
  7. A branch of a foreign company may take long-term credit and loans from a non-resident founder.
  8. A bank may grant a loan to a resident in a foreign currency, if the funds are going to be used for payments of imports of goods and services from abroad.
  9. A company may have a PayPal account in order to execute payments to partners abroad and receive payments from abroad, in foreign currency.
  10. Under certain conditions, a resident legal entity may export or import goods, as well as services in foreign trade, to execute payments or receive payments in goods or services.
  11. Under certain conditions, a resident legal entity may import or export goods or services without charging the price.
  12. A branch of a foreign company may be furnished by a non-resident founder with fixed assets and consumable items without charging the price.
  13. The Agency for Foreign Investment and Export Promotion provides full support to domestic legal entities in promoting and materialising their export strategies.
  14. The competent Ministry issues licenses for the import and export of dual-use goods.
  1. Payment of software and other digital products in foreign currency between resident structures is granted, but only on condition that payment is made using a payment card or electronic money through a payment service provider based in Serbia, and if the software or other digital product is delivered over the internet, and not physically.
  2. Residents can not only invest in short-term debt securities issued by the EU, EU member states and financial organisations, but also in those issued by legal entities with headquarters in EU.
  3. Payment to directors and employees can be made in foreign currency, in case of reimbursement of expenses for an official trip abroad, through bank transfers or in cash.
  4. Foreign currency contracting is permitted on the territory of Serbia between residents, but payment and collection under these contracts is done in dinars.
  5. The day of service provision in re-export is determined by a contract between the participants in the business.
  6. Residents – legal entities may perform exchange transactions only with the special authorisation given by the National Bank of Serbia.

 

 

Bogić Sekulović

Legal Advisor

Association „Welcome to Serbia“