6 Key points of the Endowment:
8 reasons why Endowment is an ideal business solution for you
- What is an Endowment According to the Serbian law an Endowment is a legal entity without members, to which the founder has allotted certain assets for benevolent cause or private purpose, namely any legitimate effort allowed by the Constitution and Serbian law. An Endowment may be established by at least one founder, which can be any legally capable individual or legal entity, domestic or foreign, resident or non-resident.
- Assets of the Endowment – Tax-free founding stake The minimum value of the basic assets necessary for establishing an Endowment is 30.000 EUR in RSD counter value at a middle exchange rate of the National Bank of Serbia on the date of establishment. It is possible that the basic assets be even lower than 30.000 EUR with the approval of the competent Serbian ministry.
- Use the Endowment to achieve the goal The assets of an Endowment can be used exclusively for the achievement of the goals established by the Funding act and the Statute. The assets of the Endowment cannot be distributed to the founders, members of the governing bodies, employees or persons affiliated with them, but the family members of the Founders may be named as the beneficiaries.
- Protection of assets The assets of an Endowment do not represent the assets of the founders, members of the board of directors, beneficiaries and other connected persons therefore cannot be the subject of a court dispute, divorce etc. This guarantees special kind of control without the exposure: the funds can be used only in favor of the beneficiary, in the way which is defined in the constituent documents by the Founder, who is not treated as the UBO.
- Low taxes If the donation of a property is carried out by a person or legal entity who is not a taxpayer of VAT, there is no obligation to charge and VAT payment on that turnover. In case of the Endowment, gift tax rate is 2.5%
Frequently asked questions
What is Endowment?
Endowment is a legal entity without members, to which the Founder has allotted certain assets for benevolent cause or private purpose.
What is the main benefit of registering an Endowment in Serbia?
The assets of an Endowment do not represent the assets of the founders, members of the board of directors, beneficiaries and other connected persons therefore cannot be the subject of a court dispute, divorce etc.
What are the requirements regarding the legal identity and residency of the Founders?
Founders can be resident or non-resident individuals or legal entities. Minimum number of Founders is one.
Is the information about Founders published on the registry web site?
The personal data of the Founders is published on the registry web site.
Does the legal representative of the Endowment have to be Serbian resident?
Legal representative has to be a Serbian resident.
Can the founding structure be changed?
It is possible to change the founding structure.
Is it possible to name the successor of Founder’s rights in case of death of the Founder?
It is possible and the name of the person must be stated in the internal documents of the Endowment, in accordance with the law.
Do the Board of Directors members have to be residents?
No residency related restrictions are imposed on Board of Directors members.
Does the Board of Directors of the Endowment have full control over the structure?
No. Founders can reserve different powers in the Founding Act and in that way limit other managing bodies inside the structure.
Is it possible to conduct commercial activity as an Endowment?
Yes. Such engagement is subject to registration. Commercial activity needs to be related to the declared purpose.
Can the Endowment become an owner of share capital of foreign companies?
Given that the Endowment is a legal entity, it can form daughter structures in Serbia and abroad.
Can the Endowment become an owner of real estate?
Endowment can own real estate in Serbia and abroad.
Are there any tax exemptions related to the commercial activity?
If Association conducts commercial activity its profit is being taxed at the same rate as in case of commercial legal entities (15%).
Can Endowment be subject to different tax rates?
Yes. Gifts and donations are subject to special tax rate at 2.5%.