office@welcometoserbia.org
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
Frequently asked questions
How to form a branch in Serbia?
First step would be to send statutory documents of the mother company, not older then 3 months and certified in a proper way . We will register a branch on the basis of certified POA.
What is the minimum number of directors in the branch?
One.
Does the director of the branch have to be Serbian resident?
No.
Is the branch a separate legal entity?
No. In accordance with the law branch acts on behalf of the mother company.
What is the minimum capital of the branch?
The capital of mother company is considered as the capital of the branch.
Does the branch have TEAM and others in Serbia?
Yes.
Can offshore structure open a branch in Serbia?
Yes.
Does the Branch needs to form substance in Serbia ?
No.
Will the branch obtain a resident account in Serbia?
Yes.
Can the branch receive and send the money on the behalf of the mother company?
Yes.
Can branch receive or send funds on the basis of an Agreement signed by the mother company before the branch was formed and will such funds be treated as income or expense of the branch?
Yes. This will not be treated as income or expense of the branch given that the funds will be , in terms of accounting treated as funds of the mother company.
Is the branch subject to corporate tax of 15%?
Yes, only on the profit generated by the branch.
Is the branch subject to dividend tax?
No.
Is the branch subject to withholding tax?
No.
Is the branch subject to VAT?
Only for the services executed in Serbia , connected to Serbia or for the goods imported to Serbia.