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).
7 main advantages of a Serbian branch
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.