Branch Office formation
7 main advantages of a Serbian branch:
Legal and documentary requirements:
Basic information on the Branch
According to Article 567 of the Serbian Companies Act a branch of a foreign company (hereinafter: the branch) is a separate organizational part of the company, through which the company performs activities in accordance with the law. The branch does not have the status of a legal person, and in legal transactions, it acts on behalf and for the account of the company. An enterprise shall be liable unlimited for the obligations towards third parties arising in the business of its branch.
Due to this, the branch cannot become a subject of suit, bankruptcy and liquidation.
Legal representative of the branch does not have to be Serbian resident and may apply for Serbian residency on this basis.
Branch has the obligation to submit yearly financial report and is subjected to 15% corporate tax on branch profit, however rest of the profit can be transferred to main company without taxation. There are some specific differences in taxation if the main company is from the jurisdiction with preferential tax treatment. Some of the expenses of the main company may be transferred to branch using special accounting methods, which can lower the tax base in Serbia.
In general, when opening non-resident accounts, banks insist on a clear structure of the legal entity. The experience with banks indicates the negative practice of working with trusts, so the clients are often forced to remove all nominal structures, which means almost complete change of the organizational structure of the company in order to increase the chances of opening an account. Such conditions often do not correspond to the needs, opportunities and priorities of clients.
In the moment, all banks offer the service of opening a non-resident account, but according to the number of Serbian bankers, this cumbersome operation often does not correspond to the interests of banks. In connection with this, the opening of a non-resident account becomes a long bureaucratic process (clients will have to wait for several months for the bank’s decision). Most importantly – by all criteria it is a process with an indefinite end.
On the other hand, after registering the business of an offshore entity in the Serbian business registry, banks calmly refer to the new structure as resident, and are ready to open its
Is non-resident company branch treated as non-resident structure?
No. It is treated as a resident structure. At the time of registration in Serbian business registry, it gets Serbian Tax ID which automatically makes it Serbian resident. Also, branch has its own Serbian address.
Does it mean that new legal entity is being formed?
No. According to the Article 567 of Serbian Companies Act, the branch does not have the status of a legal person, and in legal transactions it acts on behalf and for the account of the company.
How long does it take for Serbian registry to decide upon company branch requests?
Three business days.
Should I visit Serbia in order to form a company?
No. You can finish the company branch opening procedure by issuing a notarized special power of attorney (with or without the apostille depending on the country) so we can carry out all procedures without your presence.
Do nominal structures need to be removed to increase chances of getting positive response of Serbian registry’s compliance?
No. What is needed is a notarized and apostilled POA, which will empower the attorney specifically to open branch of the company.
How long does it take for Serbian banks compliance teams to study non-resident company branch account opening requests?
Since branch has resident treatment, banks don’t consider those requests as non-resident, so there is no obstacles for them to immediately open bank account.
Do you provide nominee and fiduciary services?
Yes. Nominee and fiduciary services are arranged with local attorneys at law who will act as nominee and be custodian of the agreement which will protect the rights of the true owners.
Can director of the branch, in case he is non-resident, apply for Serbian residence?
Yes. The applicant must be present for the first three days to register an address, to apply for residency and to have an interview. After that he/she must come for one more day to get the residency visa.
Is it obligatory to hire employees?
No, director solely is enough, since there are no legal obligations regarding employees.
Can you provide the address and accounting services for the newly formed branch?
Yes, we can. We can provide full range of support to your structure, no matter if it’s a branch or a company.