Branch Office formation

7 main advantages of a Serbian branch:

A must-have solution for clients who want to continue doing business with their existing offshore legal entities.

Branch of the foreign company has its own tax number and is treated as a resident.

Completely REMOTE procedure

A non-resident can be appointed as director

Structure and account in 20 days, with debit cards

Funds received on behalf of the main company are not subjected to taxation

Tax optimization and double taxation avoidance agreements with 64 countries

Legal and documentary requirements:

Documentation for the main company and all legal entities in the ownership structure of the main company (depends on the jurisdiction but must contain at least one original document, with an apostille, issued by the state registry of the country of a foreign company containing full name of foreign company, registration number of the foreign company, tax number, registered company address and information on company’s ownership structure). Power of Attorney for remote opening will be prepared by us.

Documentation containing personal data on legal representative of the Branch, as well as shareholders and UBO’s of the main company (passport copies and address proof)

Forms required for registration of the branch by the Serbian Business Registry Agency, that will be prepared by us

Forms required for the bank opening, that will be prepared by us.

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

“My account was closed in Latvia and due to my PEP status I had a problem opening bank account.”

Citizen of Ukraine, physical person

“One meeting with WTS team was enough to convince me that this is reliable partner in jurisdiction with so much potential”

- Owner at law office in Malta

“As a consultant expert I had a problem with finding solutions for clients whose accounts were closed in Cyprus. Mutual business partner suggested WTS association and Serbia as a solution and it payed of.”

- Business consultant expert in Cypriot company with international clients

Frequently asked questions

How to form a branch in Serbia?

First step is to prepare statutory documents of the mother company, as well as the PoA on the basis of which the branch can be registered remotely. All documents must be duly certified, depending on the jurisdicion where the certification takes place.

Does the branch have the same name as the mother company?

Branch has the same name as the mother company. Branch name also contains word “branch” and the name of the municipality registration in Serbia.

What is the minimum number of directors in the branch?

Branch must have at least one director-legal representative, who needs to be a physical person.

Does the director of the branch have to be Serbian resident?

Director-legal representative doesn’t have to be Serbian citizen or resident.

Is the branch a separate legal entity?

Branch is not a separate legal entity, but an organizational unit of a foreign company.

What is the minimum capital of the branch?

Keeping in mind that the branch is not a separate legal entity branch does not have its statutory capital. The information on the statutory capital amount of the mother company is published in the company profile on the state registry’s website.

Does the registry extracts confirm that the branch is an organizational unit of the foreign mother company?

Yes, since the extracts contain information on the name, registration number and address of the mother company, as well as the designation “Member-Founder”.

Can offshore structure open a branch in Serbia?

There are no legal obstacles for any type of commercial structure with legal entity to open a branch in Serbia and the same principle applies when it comes to mother company’s jurisdiction.

Does the branch requires a substance in Serbia?

There are no such legal requirements, but we strongly recommend the Clients to lease an office in Belgrade and make sure branch concluded an agreement with at least one resident legal representative or employee.

Will the branch obtain a resident account in Serbia?

Keeping in mind that the branch is a Serbian tax resident, has local company number address, corporate account of the branch will be opened and maintained by the bank as a resident’s account.

Can a branch operate on behalf of the mother company?

In accordance with the Article 567 of the Serbian Law on companies, branch acts on behalf and for the account of the company in legal transactions.

Is the branch subject to corporate tax of 15%?

Keeping in mind that a branch is a Serbian tax resident, it is a subject to corporate tax at 15% rate off it’s profit.

Is the branch subject to dividend tax?

Branch is not a subject to dividend tax. If a mother company is registered in a jurisdiction with preferential tax regime, additional taxation may be applied.

Is the branch subject to withholding tax?

Keeping in mind that a branch is not a local legal entity, it is not a subject to withholding tax. If a mother company is registered in a jurisdiction with preferential tax regime, additional taxation may be applied.

Is the branch subject to VAT?

Only for import, services executed in Serbia and services related to Serbia.

How long does the branch deletion process takes?

There is not a minimum period of time needed for the deletion. Confirmation letters from the tax administration, proving that the branch has settled all financial obligations towards the state authorities, must be provided to the registry in the deletion process.