HOW TO SET UP INTERNATIONAL TRADE BUSINESS IN SERBIA

CASE ANALYSIS

1. Client Information

• Previous to the imposed strict substance requirements by the latest OECD Guidelines, the Client operated through Hong Kong and Cypriot legal entities
• Shareholder of the Company contacted WTS via Jivo chat on the WTS website
• Company is registered in Serbia on the basis of PoA without shareholder’s presence
• Company is an LLC
• Shareholder of the company is Russian citizen 
• Director of the company is Ukrainian citizen 
• Registered activity of the company is non-specialized wholesale of goods (in Serbia only one activity is being registered, but it may conduct other activities as well) 

2. Legal Foundations

• The Company signed specialized and frame agreements with suppliers on the basis of which invoices are being issued to the Company 
• The Company signed specialized and frame agreements with Clients on the basis of which company issues invoices to its Clients 
• Director is the sole signatory 
• The Company signed rental and accounting agreements with our specialized companies (two mandatory expenses are prescribed by law) 
• The Company signed Family Office Services Agreement with WTS
• Director visited Serbia for one working day in order to obtain Electronic Signature Card needed for the submission of financial and tax statements and used that visit to personally submit personal documents to the bank, as a form of identification

3. Banking

• First account was opened in Western-European bank branch in Serbia in local currency, EUR, USD and RUB
• Reserve account was opened in Serbian bank in local currency and the second account is multi-currency account
• Director obtained e-banking devices through which the Director controls the accounts
• Company almost exclusively executed payments and received funds in EUR

4. Algorithm of Work

• The Company received funds from its Clients as advance payments
• The Company used funds to buy goods in accordance with the Client’s order
• The Company or the Supplier delivered the goods to the Client
• The Company occasionally payed for marketing and IT services to foreign Suppliers (in that sense, the Company is not subject to withholding tax)
• The Company’s website contains the list of brands and goods the Company is working with
• PoAs are certified in Serbia or in a foreign country by the Director and on this basis WTS provides a range of services from the Family Office package (on-the-ground banking support, personal presence, correspondence with the registry and Tax Administration etc.)

5. Accountancy

• The Company provided WTS’s accountancy company with agreements and invoices on monthly basis or quarterly
• The Company also provided WTS’s accountancy company with documentation and information on the transport and delivery of the goods
• WTS’s accountancy registered the Company for zero VAT declarations, given that the activity is not related to Serbia
• WTS’s accountancy prepared financial and tax declarations yearly

6. Taxation

• Tax base was formed based on the difference between the advance payments and the prices for the goods, minus the expenses for accountancy, rent, marketing and other on-demand services and Family Office services, so that only the profit is being taxed at 15% tax rate
• WTS’s accountancy helped the Company to optimize the tax base in accordance with local laws, bylaws and rulebooks

7. Further Steps

• Director of the Company started the process of obtaining Serbian residency
• The Company started searching for modest office space and one employee in order to finish the process of forming substance in Serbia, taking into account recommendations of the OECD and correspondent banks
• In the light of that, the Company signed frame agreement with one local supplier working with the same type of goods

Our team is primarily orientated towards banking solutions, as it consists of English, Russian, Spanish and Serbian speaking experienced bankers, lawyers and accountants, who have been successfully overcoming different business challenges of our Clients in Andorra, Switzerland, Russian Federation and Serbia for the last 30 years. 

For more information regarding banking in Serbia, please don’t hesitate to contact us.

email: dm@welcometoserbia.org; mob: +381 60 0622 940 (WhatsApp, Viber, Telegram)

www.welcometoserbia.org