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 20th 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