Author: Stefan P

Simplified procedure for admission to Serbian citizenship

 

Last year’s announcements of the liberalization of the citizenship regime of the Republic of Serbia have aroused great interest. Although this possibility was announced by the highest instances, our team of experts responded to a large number of inquiries from Clients and Partners, stressing the need for these initiatives to be legally formalized. Accordingly, we are pleased to inform you that the first draft of the Law on Amendments to the Law on Citizenship of the Republic of Serbia has been published.

 

One of the key motives for changing the legal solutions is to attract and retain highly skilled foreign nationals with certain skills and knowledge that could be considered as key for the development of the local economy. This initiative comes after the launch of the procedure for changing legal solutions, which will combine the processes of obtaining residence and work permit in a single procedure in which foreign nationals will be able to obtain temporary residence and work permit in Serbia at the same time.

 

 

 

Among those interested in obtaining Serbian citizenship, draft Art. 14 and Art. 15 attract the most attention.

Draft of Art. 14 introduces the possibility to apply for citizenship for foreigners with permanent residence permit in Serbia, eliminating a key condition from the current version of the Law, according to which the same right was intended for foreigners who had maintained their permanent residence permit in Serbia for at least three years before applying for citizenship.

Draft Article 15 introduces a completely new possibility – the right to apply for citizenship for foreigners who have been residing in Serbia on the basis of a temporary residence permit for a period of at least 1 year before the application and who are employed on the territory of Serbia.

 

 

Regardless of the possibility of the above-mentioned regulatory changes and in accordance with the commitments that Serbia undertakes in the process of harmonizing legislation and procedures with the EU, it is reasonable to expect that the procedures for obtaining residence permit and permanent residence permit will become more and more complicated, given that these two categories of legalization of foreigners represent the entry door for admission to citizenship. Our extensive practice in the field of immigration services also confirms the thesis that state authorities will use all legal and discretionary mechanisms to filter applicants according to state interests in a broader sense already at the first stage, i.e. when applying for temporary residence permit.

Thus, control over the legality of the application, the documentation submitted, the concentration of life and business interests as well as the overall legitimacy of the application will be raised to a much higher level with the zero tolerance for violation the conditions of visa-free regime (so-called visa-run). In this regard, the refusal to grant a residence permit will close the door to any possibility of legalization of foreign nationals and will be grounds for deportation.

 

 

 

The Association “Welcome to Serbia” has the necessary expertise, considerable experience – gained through the engagement of founders and members in this field and in other European jurisdictions – and adequate personnel – through active cooperation with attorneys-at-law specializing in work with the Department for Foreigners of the Ministry of Interior.

We will be pleased to assist you not only in implementing, but also in properly articulating your interests on the territory of Serbia, which will help you in coordinating with the competent governmental authorities in all aspects of your presence. Our team of experts is ready to provide the basis for your long and peaceful stay in our country and the first step in this regard is obtaining your temporary residence permit.

 

 

 

Bogić Sekulović

Legal Expert

Association “Welcome to Serbia”

 

 

Banking difficulties for non-residents

 

In recent time, non-residents have reported increasing difficulties when working with banks in Serbia. This has been particularly problematic for individuals who need to transfer funds to accounts abroad, or who rely on e-banking to conduct financial transactions. Some of the challenges that non-residents face when working with banks in Serbia include the need for a “fresh” white card from the Ministry of Internal Affairs, restrictions on using e-banking to initiate transactions, and the need for confirmation from tax authorities when transferring funds abroad.

 

 

 

 

„Fresh“ white card

 

One of the most significant challenges facing non-residents in Serbia is the need for a “fresh” white card from the Ministry of Internal Affairs. This card is essentially a document that verifies a person’s identity and residency status in Serbia. Non-residents who wish to conduct any tipe of transaction with banks in Serbia must have a valid white card, and the card must be “fresh” (i.e., issued within the last month).

 

This can be a cumbersome process for non-residents who do not live in Serbia full-time, as it requires them to rent an apartment every time they visi Serbia and get a „white card“ from the Ministry of Internal Affairs in person, as a tourist „white card“ is not valid for the banks.

 

 

 

 

E-banking restrictions

 

Another challenge facing non-residents in Serbia is the restriction on using e-banking to initiate transactions. Most of the banks in Serbia do not allow non-residents to use e-banking to initiate transactions. This can be particularly problematic for individuals who need to transfer funds quickly and efficiently, as it often means that they must visit a bank branch in person to initiate the transaction. This can be a time-consuming process, particularly for non-residents who do not live in Serbia full-time or have a residence permit.

 

 

 

 

Transferring funds abroad

 

Finally, non-residents in Serbia may also face challenges when transferring funds abroad. In many cases, banks in Serbia require confirmation from tax authorities before allowing a non-resident to transfer funds to an account abroad. This can be a significant problem for non-residents, as it requires them to navigate complex tax regulations and may result in delays or additional costs.

 

In summary, working with banks in Serbia can be challenging for non-residents, particularly when it comes to transferring funds abroad or using e-banking to initiate transactions, that is why it is highly recommended to obtain a residence permit in one of several ways, most popular being company formation and real estate investment, and get full access to Serbian flexible banking system.

 

 

Welcome to Serbia can offer full legal and administrative support in the process of obtaining temporary residence in Serbia, as well as professional advice and solutions to all bank-related matters in Serbia.

 

 

 

Contact us for more information at nb@welcomtoserbia.org or +381 60 1849443 (Whatsapp, Viber, Telegram).

 

Nina Barudžija

 

Client Advisor

 

Operating in another country through a local branch reflect and helps the reputation of your business. Branch is a widely recognized legal form stipulated in different legal systems and simply existing in the consciousness of individuals and business entities in a broader sense – as a displaced unit of a company capable of conducting commercial activity.

 

Above mentioned legal form is often confused with similar but different legal form, a representative office of a foreign company. Of course, both branch and representative office can be formed by a foreign company (although both local and foreign companies can have a branch in Serbia, while only a foreign company can have a representative office in Serbia);
both of them are not treated as legal person (which means that, in legal terms, legal identity of both legal forms is provided by the mother company as the only legal person in the structure) but, on the other side, both are, in terms of reporting, taxation (almost all tax obligations) and other fiscal-related manner, treated as Serbian residents, due to the fact that both are registered with business registry with Serbian address, which results in assignation of tax identification number in both cases.

 

 

 

In accordance with Serbian Law on Companies branch of a foreign company is a separate organizational unit of a company through which the company performs activity in accordance with the law. Branch acts on behalf of the mother company.

 

 

This means that a representative office is an organizational unit equipped with commercial identity unlike the representative office. Branch can conduct commercial activity both on request and in accordance with instructions of the mother company but it can also generate its own income and eventually profit by executing commercial transactions.

 

 

 

Branch of a foreign company can have (employed) director and personnel in Serbia. Serbian branch of a foreign company can also have all types of bank accounts opened in local bank. In addition to that, branch has its own premises, registration number, tax identification number and other components that are similar even to the local legal person (LLC).

 

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7 main advantages of a Serbian branch

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In practice, branch of a foreign company is being utilized for commercial operations related to the place or region where the branch is positioned with all supporting operations just like in the case of companies. Usually the director of branch of a foreign company is being stationed in Serbia. In terms of financial and tax regulations branch operations need to be treated with expertise and experience given that a branch can conduct operations on behalf of mother company and cooperate with the mother company through internal banking and financial transactions, which is very specific.

 

 

Association “Welcome to Serbia” is well-experienced in terms of registration and maintenance of branches of foreign companies, including but not limited to administrative, legal and accounting areas and we are looking forward to collaborating with foreign companies interested in such form of business presence in Serbia.

Starting a business in Serbia can be a complex process, involving legal and regulatory requirements that can be challenging to navigate without expert guidance.

 

Hiring a lawyer to help with this process is a common solution, but relying solely on an individual expert can be risky, as they may not provide all the necessary information to their clients. In this blog post, we will explore a case study that illustrates the importance of having full support from all aspects when setting up a business in Serbia.

 

 

Case Study – Why you shouldn‘t rely on one expert when starting a business in Serbia?

 

 

In this case, a client wanted to set up a small business in Serbia, related to selling jewelry as a retail business. The client hired a lawyer to help with the registration process and assumed that everything would be taken care of once the business was registered. The lawyer successfully registered the business and provided the client with all the necessary documentation.

 

However, the lawyer failed to inform the client about all the other legal and regulatory obligations that come with setting up a business in Serbia, most important of all – his tax obligations, mainly the deadline to submit the initial tax report within 15 days from the company registration. As well as the obligation of having a licensed accountant for the purpose of submitting regular financial and tax statements.

 

 

A few months after registering the business, the client received a letter from the Tax administration informing him that he had failed to comply with certain regulations and was facing penalties. Confused and frustrated, the client reached out to his lawyer for guidance. However, the lawyer was unable to help him, as they did not have expertise in the specific area.

Our client then realized that he had made a mistake by relying solely on one lawyer for his business setup. He started doing research on his own and found out that there were several other legal and regulatory requirements that he had to comply with, such as tax and accounting obligations, data protection regulations, and labor laws.

 

 

He turned to our company and found that we provide full legal, administrative, and accounting support of business, being specialized in working with foreign clients, and having a team of more than 15 experts, including lawyers specialized in different fields, licensed accountants, tax experts, financial advisors among others.

 

 

 

This case study illustrates the importance of not relying solely on one expert when setting up a business in Serbia.  It’s crucial to work with lawyers and other experts who have expertise in the specific areas of law related to the business and who can provide comprehensive guidance throughout the entire process.

It’s also essential to do your own research and stay informed about all the legal and regulatory obligations that come with starting a business in Serbia.
By doing so, you can avoid potential legal issues and ensure that your business is set up for success.

 

If you plan to start a business in Serbia and do it properly contact Welcome to Serbia at office@welcometoserbia.org or +381 60 1849 443.

 

Having a representative office in another country reflects and helps the reputation of your business. Representative office is a widely recognized legal form that existed throughout 20^th century even in different political and economic systems. Lately representative office became interesting not only for state-owned foreign companies, but to foreign investors in Serbia generally.

 

 

Above mentioned legal form is often confused with similar but different legal form, a branch of a foreign company. Of course, both representative office and branch can be formed by a foreign company (although only a foreign company can have a representative office in Serbia); both of them are not treated as legal person (which means that, in legal terms, legal identity of both legal forms is provided by the mother company as the only legal person in the structure) but, on the other side, both are, in terms of reporting, taxation (almost all tax obligations) and other fiscal-related manner, treated as Serbian residents, due to the fact that both are registered with business registry with Serbian address, which results in assignation of tax identification number in both cases.

 

 

In accordance with Serbian Law on Companies, the representative office of a foreign company is allowed to execute preliminary and preparatory actions related to the activity of the mother company and its performance in legal transactions. Also, a representative office can only conclude legal transactions in connection with its current business.

 

This means that a representative office is not an organizational unit equipped with commercial identity like the branch. Preliminary and preparatory actions are being done on request and in accordance with instructions of the mother company, so the work is being delivered to the mother company.

 

This doesn’t mean that a representative office cannot have (employed) director and personnel in Serbia. Serbian representative office of a foreign company can also have all types of bank accounts opened in local bank. In addition to that, representative office has its own premises, registration number, tax identification number and other components that are similar to the branch of a foreign company and in some elements even to the local legal person (LLC).

 

In practice, representative office is being utilized for market research, search for partners, participation in seminars, various negotiations on ground, seeking and agreeing provision of services and, in case of need, acquisition of goods, both by contacting clients, suppliers and business partners. Usually the director of representative office is being stationed in Serbia.

 

 

Association “Welcome to Serbia” is well-experienced in terms of registration and maintenance of representative office, including but not limited to administrative, legal and accounting areas and we are looking forward to collaborating with foreign companies interested in such form of business presence in Serbia

The purchase of an unregistered apartment in Serbia – 7 problems you could be faced with

 

Because of the lower price of unregistered apartments, the purchase of this type of property has become very popular in Serbia. What are the consequences that lie behind the purchase of an unregistered apartment and what’s the risk for the buyer? Is it possible at all to buy or sell such property legally?

 

 

 

What is an unregistered  apartment – property?

 

Unregistered property in Serbia is the property which has not been registered in the Real Estate Cadaster. In case a property is not registered in the Cadaster, and the buyer still wants to purchase it, he/she should be informed that such decision could lead to severe consequences. The risk is there because the law stipulates that real estate ownership rights can be acquired exclusively by registering the property in the cadaster.

 

The reasons behind an unregistered house or apartment can be various, but the majority of these reasons can be easily solved, with a certain amount of time and some extra effort. You can register a property and ownership rights at the competent institution or the cadaster.

 

According to the law, a person holding the property rights is under the obligation to file an application for registering property and ownership rights. This can be done by the current property owner, as well as the person who purchased an unregistered property. However, before making a purchase, it is crucial to check whether the unregistered property is legal or illegal.

 

 

 

Legal and illegal unregistered properties

 

Legal unregistered property represents newly built apartments that have not been registered in the cadaster yet, but were built in accordance with the construction permits. Old apartments and other property with duly and complete documentation also fall into this category, and it is mostly relatively easy to register them.

 

The situation is much more complex when it comes to illegal unregistered property, and this concerns, for example, illegal buildings built after 2015 or state residential buildings built 30 or 40 years ago, for which no occupancy permit was ever issued. It is neither possible to register this type of property, nor to legally buy it or become its owner. Although according to the law it is theoretically possible to legalize illegal buildings provided that they meet at least the minimum legal requirements, in practice, the process of legalization is in significant stagnation.

 

 

 

Is it possible to purchase an unregistered apartment?

 

When it comes to the purchase and sale, according to the law, the status of registered and unregistered property is equal. This means that it is possible to buy or sell a property even when it is unregistered, but with a certain amount of risk. It is crucial to determine whether the property is simply unregistered or unregistered and illegal, since illegal property cannot be registered. When it comes to the legal property, which is solely not registered, the process of registration can be completed with no bigger issues.

 

 

 

How to register an apartment?

 

The first step is for the person who purchased an apartment in a building to file a petition for the registration of the building. Then, the ownership rights of the investor are transferred to the petitioner. The next step is gathering the documentation proving the owner or the occupier of the land on which the building was built. Usually, that is the investor, a municipality or a competent state authority, depending on the size of the building. Additionally, you will need a building permit and an occupancy permit for the registration.

 

 

 

When is a property illegal?

 

A property is illegal when no permit was issued for its construction or when the construction of a property was not executed in compliance with the permit issued, for example, when the square meters of a building are more that authorized. Even this type of property can be purchased, provided that the seller filed an application for its legalization, the process of which shall be completed by the buyer. In case you decide to buy this type of property, make sure to request a certificate confirming that the property is under the process of legalization.

 

 

 

What are the risks of buying unregistered property?

 

• In some cases, it may turn out that the apartment cannot be registered at all or at least not registered in due time. Thus, the new owner may not register the ownership in their name.

 

• If you wish to sell the property and you’re not its registered owner, or if you find yourself in the position where it’s necessary to prove that you are the owner, you won’t be able to do this. In these situations, you will have to rely on the other party’s understanding that you are the actual property owner.

 

• There is a risk that the government could change the terms and provisions for apartment registration.

 

• When buying an apartment which is under the process of legalization, the legalization application could end up being denied after its purchase.

 

• In the event of a failed legalization, the government may order for the demolition of the property, although this happens rarely.

 

• When it comes to buying a partially registered apartment, certain issues may also arise. For example, one room is unregistered and its area is extended at the expense of the joint building space, but without the consent of other building residents. The unregistered part of the apartment may be confiscated by the apartment owners’ association.

 

• It is not possible mortgage an unregistered property and, as such, that property cannot be used as security in case of loan debt. Unregistered property may discourage potential buyers who are looking to buy the property by means of a bank loan.

 

 

 

How to determine whether a property is registered or not?

 

The information on whether a property is registered in the Republic of Serbia is publicly available at the website ekatastar , where you can also check exactly how many square meters of the property is registered. The registered apartment search may be done based on the apartment address or the number of the cadastral plot where the house or the building is situated. You can also obtain information on whether there are any types of encumbrances, notes or pending requests, such as mortgages, restraints on disposal or any dispute.

 

The information obtained for a specific property is not final, but rather informative. For this information to become an official document, it has to be certified by a competent authority.

 

 

 

Conclusion: Should we avoid purchasing an unregistered property?

 

Although you can get by much cheaper if you decide to buy an unregistered property, real estate experts advise caution. Before making a final decision, you are advised to thoroughly check all the information and consult your lawyer or real estate agent.

 

It is possible that the current owner simply forgot to register the property in their name, and the previous owner remained registered as the property owner. If the current owner possesses complete documentation, there are no impediments for you to buy such property, and then register yourself as the owner. In addition, you may ask the seller to register their ownership before executing a purchase agreement, which would simplify and speed up your process.

 

 

As previously clarified, there are two types of unregistered property, the property for which the legalization procedure was initiated and the property where such procedure was not initiated, mostly because the legalization of such property is impossible. The later should not be purchased, since there is no valid ownership documentation for it.

The demand for property in Serbia is high, and one of the reasons behind it is the fact that you may obtain a temporary residence permit by purchasing a property, and you should thoroughly check the status of the property you’re looking to buy. For more information on the subject, feel free to contact our team Welcome to Serbia.

 

 

 

 

 

 

 

Eco-village
Climate change and the rising pollution in big cities, together with the energy crisis, have imposed new standards when choosing a place to live. Even though planned communities existed in nature before, the possibility of working remotely has greatly influenced their popularity. Thus, real estate in Serbia outside the big cities have become the most sought-after not only for living, but for investing into, as well. Many celebrities are increasingly deciding to relocate to quieter ares, and Novak Đoković has joined this trend, having built a villa next to the lake itself in the Srem district. Can you picture living in a natural and eco-conscious setting, far away from the city crowd and stress?

 

What exactly are eco-villages, and why are they so well-liked?

 

For more than two and a half years, the trend of rising demand for real estate outside of big cities has been present. At the very beginning of the implementation of quarantine in 2020, numerous citizens decided to replace the four walls and daily stress with a more meaningful and conscious life. This aspiration was additionally supported by daily air pollution, traffic jams and unhealthy diet. However, houses in weekend getaway settlements are generally very demanding in terms of renovation and maintenance, thus, the so-called “eco-villages” have grown in popularity on the real estate market. There are various locations in Serbia where such real estate is now being built or planned, as well as in the wider Belgrade area. Some of the locations include mountains, such as Avala, Fruška gora, Zlatibor and Kosmaj; near the city Aranđelovac, in Vrnjačka banja, on the shores of Srebrno jezero, and in the municipality Sopot.

 

Ecological urban construction entails building contemporary structures with the use of traditional materials, which are environmentally acceptable. In this manner, one receives a quality place to rest and live, as well as healthy food, clean air and undisturbed sleep. Nonetheless, there was a step further taken in the construction of eco-villages. These villages comprise whole communities which operate as separate entities and share community values. They are founded on the principles of renewable energy sources, eco-friendly construction and environmental preservation. Their usefulness stems from the strong relationship between the people and the nature, which fosters harmony in the environment.

 

 

 

What distinguishes eco-villages from the classic real estate in Serbia?

 

• Living in harmony with nature brings the harmful effects a man has on the current living environment to a minimum.
• Eco-friendly and recycled materials, as well as cutting-edge building systems, are used for the construction.
• Due to the energy-efficient construction of the facilities, the minimum use of energy is ensured.
• A high percentage of energy independence is provided with renewable energy sources.
• Responsible water usage is made possible by specialized filtration systems, rainfall collection systems, and effective waste water management.
• Regular disposal and recycling of waste are carried out.
• Access to organic food that is easily available, fresh and relatively cheap in Serbian villages, is provided by cooperating with local farmers.
• The eco-village use environmentally friendly modes of transportation such as electric cars and bicycles.
• A complex of facilities with a variety of uses, including indoor and outdoor children playgrounds, conference rooms, spa & wellness centers, a mini-zoo, sports fields, coffee shops, restaurants, and bungalows, is planned to be constructed inside these villages.

 

 

What kind of houses are available and what is the price per square metre?

 

These types of properties in Serbia range in size up to 400 m² and are often in the A shape. The option of building an indoor or outdoor pool is available as a part of several different projects. While you can modify the interior to suit your needs, it is also possible for an architect to provide new preliminary design drawings just for you. For heating and cooling, the majority of the houses are equipped with heat pumps, and solar energy is used to generate the power. The plot ranges from 5 to 20 ares of green area, in addition to vast areas of shared land, woods, and the previously mentioned sporting and recreational facilities.

The eco-villages have a special benefit of having a maintenance service which is in charge of cleaning and upkeeping roads, plots, grassy areas and fences. This is essential if you do not want to take on these responsibilities or simply do not have time for them. Additionally, the security service is available on demand 24/7.

 

 

The following variables affect the price of the house in the eco-villages:

 

• Plot locations in the eco-village
• Plot size
• Preliminary design of the house

 

Depending on the mentioned variables and the type of the village, the prices for a house on Kosmaj or Fruška Gora per square metre range from 1,500-1,600 euros up to 3,000 euros. A 54 square metre house with a yard and a parking place typically costs approximately 80,000 euros. According to the real estate agents, the house of 108 square metres with 10 ares of land would cost 130,000 euros, while the house of 130 square metres with 10 ares of land would cost 150,000 euros, i.e. 1,100-1,200 euros + VAT per square metre.

 

In the case of smaller-scale projects, the number of houses is around 11, while the larger-scale projects count up to 100 houses. Nevertheless, to ensure the peace of mind of its residents, the villages most commonly have just a few rows of houses or 3 to 4 buildings. In some cases, such as the eco-village on Zlatibor, the construction of 18 facilities is planned, with the option of extension afterwards. This village, located at 1,320-1,370 metres above sea level, is known for its beneficial climate and 360-degree sightseeing platforms. A special benefit is that you can reach the Zlatibor’s city centre in 15 minutes and enjoy the rich offer this mountain provides.

 

Even though the majority of eco-villages are still under construction process, the house sale is on-going. This type of real estate is quite well-liked in Serbia, particularly among foreigners. The reason for this lies in the following -purchasing a property in Serbia is a relatively straightforward method to acquire a residence permit. In addition to getting a house and a piece of land that you do not have to bother about maintaining, purchasing a house in one of these eco-villages also gives you access to a forest with walking trails, a shared recreation space, and a healthy environment. Apart from gaining a house to live in or go on vacations, you have the possibility of renting it, because tourists find this type of houses attractive.

 

Can you already picture yourself as the owner of one such real estate in Serbia, in this paradise? If the answer is affirmative, contact us to help you find an ideal house which suits your needs: office@welcometoserbia.org or +381601849443 (WhatsApp, Viber, Telegram).

Real Estate in Serbia: While sales drop, prices remain high

 

According to the report issued by the Republic Geodetic Authority (RGZ), in  international-scale comparisons, the Apartment Price Index in Serbia has recorded a growing trend, like in many countries. The Apartment Price Index in the third quarter of 2022 stands at 138.08 and reflects a steep rise in apartment prices, which has lasted through the year. The Index has been developed in line with international guidelines and is based on a mass apartment appraisal model, which takes into consideration not only the prices stated in sales contracts but also different property features gathered from relevant sources. Its role is to transparently display developments in the real estate market. The current Index of 138.08 means that if one purchased an apartment in the first quarter of 2019, when the basic index was 100, the value of his property has appreciated by 38%. The Serbian Apartment Price Index line graph is as follows:

 

Source of data: RGZ	– – TOTAL    － OLD BUILD － NEW BUILD
*preliminary indexes
Graph No. 1: Apartment Price Index in Serbia, the interrupted line marks the total number for the entire market; the light purple line marks new build, while the dark purple line marks old build.

 

When it comes to price hikes, from the first quarter of 2019 to the third quarter of the current year, the region of Vojvodina with the Index of 142.13, along with Belgrade with the Index of 141.43, topped the list. The most dynamic growth of real estate prices in the third quarter, just like in previous ones, was recorded in the regions of South Serbia and East Serbia, but this partly stems from relatively lower prices, compared to the rest of Serbia.

 

 

Old-build apartments mark the fastest growth

 

The  Property Price Index growth trend is largely fuelled by the escalating prices in the old-build sector, with the annual growth of 18.84%. This may indicate that the new-build supply is maladapted to a massive rise in demand. The third quarter of 2022 saw a continuing trend of sharp apartment price surges, which in the course of this year occasionally reached two-digit annual rates. Therefore, the apartment price growth rate in the Republic of Serbia amounted to 13% in the third quarter of 2022, while it stood at about 8% in 2019 and 2020. Apartment prices in the third quarter of the current year are up by 3.2% compared to the previous quarter. The annual apartment price growth rates are displayed on the line graph below:

 

Source of data: RGZ	－  OLD BUILD   – – TOTAL   － NEW BUILD
*preliminary rates
Graph No. 2: Annual apartment price growth rates in percentages, for the entire market (interrupted, blue line), old build (purple) and new build (green).

 

 

Dip in apartment sales

 

The number of apartments sold in the third quarter of 2022 has decreased by 5.6% compared to the same period in 2021. This plunge signals a settling down in the real estate market, as the indicator showed a rise in the number of sales over the past eight quarters.

 

Apartment prices advanced steadily in the third quarter, too, which pushed the value of apartments for sale up by 12%, in contrast to the third quarter of 2021. However, a deceleration in market growth is noticeable, for the same indicator has jumped by as much as 26.1% in the second quarter of the current year, as opposed to the same period last year. Fluctuations in the number of sales and their value are displayed on a bar chart below. The Foundation for the Advancement of Economics (FREN) has also stated that the signs of real estate market deceleration are emerging in Serbia; nevertheless, even though they anticipate a decline in demand, prices are not expected to drop.

Source of data: RGZ	Number of sales        Total value of sales
Graph No. 3: Annual growth rates of the number of apartment sales and the total value of apartment sales in Serbia, in percentages; the number of sales is marked in purple, while the total value of sales is marked in blue.

 

 

The report mentions that the downward trend in the number and value of apartment sales results from a decrease in the number of apartment sales funded through bank loans. The share of these has fallen by 25.7% in the first quarter, 25.4% in the second quarter and by 31% in the third quarter, as can be read from the following graph:

 

 

 

Source of data: RGZ	－  Number of loans — apartments
	－  Number of loans — all properties
Graph No. 4: The annual growth rate of the number of apartment sales funded through loans (purple) and all other properties (blue), in percentages.

 

 

 

When will the Serbian real estate prices firm?

 

The issue of real estate price stabilization in Serbia is related to several factors which encourage a high-price plateau. First of all, a huge demand for properties, sustained not only by the first-time home buyers but also by the growth of inflation rates, is still in evidence. The Euro is losing its real value and many Serbs and foreigners alike are investing in properties with the aim of preserving the value of money. Experts expect the negative trend of loan-funded purchases to continue as long as Euribor is growing.

 

Analysts estimate that the plunge in apartment sales stems from the decrease of both supply and new build, which will probably last into next year, too, having in mind that the number of building permit requests was lower in the third quarter of 2022. A slowdown in building next year will push the supply down and the prices up again. Currently, two to four buyers are interested in every property for sale, while real estate agents underline that sometimes there are as many as ten buyers interested in one apartment.

 

Source of data: https://www.rgz.gov.rs/usluge/procena-i-vo%C4%91enje-vrednosti-nepokretnosti/indeks-cena-nepokretnosti/rgz-indeks-cena-stanova

 

 

Starting up a sports club in Serbia

 

For the purpose of undertaking sports activities, a sports organisation in Serbia may be set up as an association, business entity or entrepreneur. Depending on the manner of organisation and territorial scope, a sports organisation may be:

 

• A sports association set up by minimum three legally competent natural persons and/or legal persons, associated in order to achieve a common goal. This is the form in which sports clubs are set up.
• A sports society created through association of sports organisations for the purpose of regulating and achieving common goals and interests, and also of having joint performance in the area of sports.
• Professional sports associations created through association of sports professionals, such as associations of instructors, umpires and the like.
• Branch and territorial sports associations created through association of several sports organisations and associations.

 

 

 

 

Sports association (club) in Serbia

 

A sports association in Serbia, just like any other association, may be set up by domestic or foreign, natural or legal persons, for the purpose of undertaking a specific sports activity, i.e. achieving sports-related goals. Set-up goals may differ and they most often refer to the popularisation of a specific sports branch. In order to acquire the status of a club, membership in authorized associations and the possibility of participating in competitions, you need to first set up a sports association.

 

The law specifies that a sports association while being set up cannot use the term “club”, as this term may be entered only subsequently, after the decision of the authorized sports inspector has been obtained. A sports organisation participating in sports competitions should contain the term “club” or “sports club” in its name and also the name of the branch or branches it competes in. Furthermore, in order to participate in competitions, the club needs to be registered with the authorised national branch sports association and meet the conditions in line with the Law.

As a non-profit organisation, a sports association is exempt from payment of taxes, though it has the status of a legal entity, which facilitates development of business relations considerably. It is obliged to keep its business records and submit its financial statements in line with the regulations.

 

The Sports Law provides for the possibility to acquire financial assets and revenues through membership fees, donations and grants, subsidies, inheritance, sponsorships, dividends, services and other activities. A sports association may use its property solely for the purpose of achieving the goals defined by the Statute. Furthermore, a sports association may set up a business entity or another legal person in order to obtain the assets required for achieving its sports goals.

 

 

 

 

Procedure for setting up sports associations in Serbia

 

The first step in the process of setting up a sports club in Serbia is to convene the founding assembly, whether it is a football, volleyball, basketball or any other sports club. The founding assembly is to decide on the name and the seat of the club and its legal form, and also to appoint the persons authorised to represent the club. Furthermore, it should adopt the Statute and sign the Articles of Association. The Statute defines the goals on account of which the association is being set up, and also the key activities for their achievement.

 

 

 

 

Is it possible to set up a sports school in the form of a sports association?

 

Legal and natural persons not participating in sports competitions whose core activity is sports training and advancement of third parties (not its members), inclusive of a market fee, or sports exercising, may be founded solely in the form of a business entity (LLC) or an entrepreneur.

This category includes football schools, tennis schools, swimming schools, martial arts schools, dance studios, camps, and also sports academies, fitness and other sports centres. While a business entity may be set up by a natural and/or legal person, an entrepreneur must have appropriate sports knowledge. They are not allowed to include in their title such terms as “club”, “sports club” or “association”, but only “school”, “academy”, “sports centre” or “sports school”.

 

Although the procedure for setting up a sports organisation in Serbia is relatively simple, in order to follow it through independently, you need to know that the issues such as the legal form, name, core activity, organisational structure and the like are regulated by the law. Furthermore, you should bear in mind the obligations and responsibilities of the founders, members, legal representatives, and also the obligations related to reporting and payment of taxes. All these and many other details are defined by a series of regulations contained in the Law and Rulebooks. We, therefore, recommend that you consult us beforehand to receive guidelines on all available options.

 

 

 

If you own a company, real estate or funds and you are not currently able to manage it directly, we can offer a solution to protect your assets and interests.

Depending on your needs, assets can be managed, controlled and preserved by:

1. Giving a power of attorney. Giving our attorney the power to manage your immovable and movable property.
2. Authorising our legal representative (natural or legal person) to represent and manage your company.
3. Completely reorganizing the structure of ownership over your property by the means of a special legal form – endowment (it is the same as a trust and foundation in the West), where all the client’s assets can be owned by the endowment regardless of their location.
4. Will and inheritance.

 

You remain the only owner of your assets and our attorney or legal representative manages solely in compliance with your orders and instructions.

fter holding a meeting and consultations with you, we will send you an opinion and a suggestion which is the best and the most efficient way to manage and preserve your assets.

 

 

 

1. An attorney authorised to manage your immovable and movable property

 

An attorney can be authorised to conduct a limited or broad spectrum of activities on behalf of the principal, based on a special, i.e., general power of attorney.

Depending on whether the power of attorney is given to conduct activities related to state or private entities, i.e., third parties, the powers of attorney do not have to be given by the principal within an internal procedure of the given state or private entities. Instead, they can be submitted by the attorney given that the power of attorney has previously been certified by a competent notary public and, if necessary, legalized, i.e., apostilled and also translated into a local official language.

The powers of attorney are, among other things, given for the purpose of representation in relation to bank accounts i.e., to manage and control them, to act before the state administration and tax bodies in respect of personal income, disposal of real estate, tax liabilities, maintaining real estate – in relation to the providers of public utility services, cadastre, law and accounting firms, and other state or private entities.

 

 

 

2. A legal representative (natural or legal person), authorised to manage your company

 

A legal representative (CEO) is a person managing your company affairs but does not perform those duties at his discretion. The aforementioned party acts strictly in compliance with the instructions of the real owner with whom it has a contractual relationship and in compliance with local laws.

If the owner wants that, the appointed CEO can have broader authorities but the real owner will still be able to replace the CEO or revoke his decision at any time.

 

A legal entity can be a legal company representative as well.

The CEO of that legal entity shall delegate a person to sign all the documents of your company on behalf of the legal entity – legal representative and perform all other activities necessary to manage the company.

 

 

 

3. Turning property and capital into the property and capital of an endowment registered in Serbia.

A special legal form called endowment, registered under the laws of the Republic of Serbia, allows the accumulation of property and capital, which have been invested, i.e., gained by the decision of the endowment founder and which, after becoming the property of the endowment, shall no longer be considered the founder’s property. Although the founder remains in control over the invested property and capital, the endowment protects them from any third parties’ pretensions in legal transactions.

Having in mind that the endowment activity is determined by the founder and in the interest of the founder, members of his family or third parties, the founder issues internal documents determining the spectrum of goals for the realization of which are used the assets, which makes this legal form complete in terms of risk protection, control and flexibility.

 

 

 

4. Will and inheritance

Testamentary inheritance will enable you to dispose of your property and be sure that your relatives will be protected.

We will make sure that your testamentary will is valid in terms of business testamentary capacity, substantive issues of the testamentary inheritance and form.

When it comes to foreign nationals’ estate in Serbia, consisting of real estate located on the territory of Serbia, the only applicable law is the law of the Republic of Serbia.

When it comes to foreign nationals’ estate in Serbia, consisting of movable property located on the territory of Serbia, the applicable laws include but are not limited to the law of the Republic of Serbia.

 

We can offer you these services also for your property located in Switzerland, Andorra and other European countries.

 

 

 

 

Procedure and pricing:

 

If you are currently outside of Serbia, you can appoint an attorney or a legal representative by giving a power of attorney.

 

The fee for our services will be determined based on the best proposed solution for property management and it could be expressed as:

• a fixed monthly or annual amount
• a percentage relative to the value of the managed property or
• a one-time fee based only on the agreed and taken actions, without the need to pay fixed fees.

 

In the best interest of your relatives and in order to be responsible towards the years of making effort to obtain property, we recommend you to decide who will dispose of your property in a timely manner considering the current turbulent events.

 

 

Our team that consists of layers, bankers, accountants and international consultants can help you to manage and protect your property in Serbia, so do not hesitate to contact us for any questions.

 

For more information, please feel free to contact us.

nb@welcometoserbia.org or +381601849443 (WhatsApp, Viber, Telegram).