Endowment 2019-07-14T00:41:14+02:00


What is an Endowment?

According to Serbian law an Endowment is a legal entity without members, to which the founder has allotted certain assets (basic assets) for benevolent cause or private purpose, namely any legitimate effort allowed by the Constitution and Serbian law.

Realization of a private interest, as Serbian Law explains, shall be considered as activities aimed at attaining individual interests of the founder of the Endowment, his family or third parties (family Endowments can be established for the purpose of educating family members and for some other legally permitted purposes).


An Endowment may be established by at least one founder, which can be any legally capable individual or legal entity, domestic or foreign.

Documents for establishing an Endowment

Founding act
Decision to appoint members of the Board of Directors
Decision to appoint Manager of the Endowment
Proof of the payment of basic assets, in RSD

Bodies of the endowment

Board of directors
Chairmen of the Board of directors

The Board of directors manages the Endowment and have at least three members.

Founder can be also appointed as member of the Board of directors or as member of other bodies of an Endowment, in accordance with the Statute.

If the Founding act and the Statute do not specify otherwise, the chairman and members of the Board of directors are appointed by the founder.

Manager of an Endowment can be only a legally capable individual, who has a place of permanent or temporary residence in the territory of the Republic of Serbia.

Also, same individual cannot be appointed both as a Manager and as Board member of an Endowment, meaning that a founder can be member of the Board of directors but not Manager.

Assets of the endowment

The basic assets of an Endowment can be goods, rights and money. The minimum value of the basic assets necessary for establishing an Endowment is 30,000 EUR in RSD counter value at the middle exchange rate of the National Bank of Serbia on the date of establishment (date of signing of the Founding Act). It is possible that the basic assets be even lower than 30,000 EUR, with the approval of the competent Serbian ministry.

An Endowment may acquire assets from voluntary contributions, gifts, donations, financial subsidies, legacy, interest on deposits, rent, copyrights, dividends and other revenues generated in a lawful manner. It the case of an Endowment, gift tax rate is 2,5%.

Assets of an Endowment must never be lower than the basic assets.

The basic assets of an Endowment can be rights on movable and immovable property, obligatory claims and industrial property rights, as well as cash (foreign exchange and RSD).

The founding stake of an Endowment is tax-free.

Use of assets

The assets of an Endowment can be used exclusively for the achievement of the goals established by the Founding act and the Statute.

The assets of an Endowment cannot be distributed to the founders, members of the governing bodies, employees or persons affiliated with them.

Legal relationship of the founders and assets of an Endowment

The assets of an Endowment do not represent the assets of the founders, members of the board of directors, beneficiaries and other connected persons, and can not be the subject of a court dispute, divorce so it represents a kind of legal protection for the founders and persons related to them.


An Endowment keeps accounting books, compiles and submits financial statements in accordance with accounting and auditing regulations.

Tax treatment of an Endowment

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.

A gift tax of 2.5% is levied both in case of an Endowment receiving money and giving it to someone else.

Documents and Information required for founding of an Endowment

In order to commence drafting the founding documents and to commence the incorporation procedure we require the following information:
(1) Names of the individuals or legal entities who shall be designated as founders;
(2) Description of the main objectives of the Endowment;
(3) Names of the individuals who shall be designated as Members of the Board of directors;
(4) Name of the individual who shall be designated as the Manager (has to be Serbian resident)
(5) The full name of the Endowment

After that, in order to commence the incorporation procedure, we would initially also need the following documents:

(1) If the founder is a legal entity, Certificate of Incorporation of the founder – apostilled (The Hague Convention, 5th October 1961), or if the founder is a foreign individual – a copy of his/hers Passport;
(2) The Resolution of the founders’ Board of Directors or other appropriate authority to establish an Endowment in Serbia and appointing the person(s) to sign the foundation documents (we prepare the draft);
(3) Copies of Passports (or Identity Cards for citizens of Serbia) of the designated representatives of the Endowment as Members of the Board directors and the Manager (the Manager must be a Serbian resident); We can offer you nominee service in this matter.
(4) Duly notarized Memorandum of Association (Founding Act or Contract) (or Resolution), (we can provide the initial draft and notarize it with or without your presence);
(5) Duly notarized Statute of the Endowment (We will prepare this and organize notarization of the signature of the Endowment’s representatives);
(6) Duly completed application forms for the purposes of registration in the Serbian Business Registry Agency and/or for establishing a bank account. We are providing you with these forms.
(7) Duly completed other application forms for the purposes of post-registration procedures (We will prepare and fill out the forms)

What makes Serbian Endowment an ideal business solution?

1. The most important characteristics of an Endowment are the unique way of founding and the legal treatment of the UBO, defined by the current Serbian law, which stipulates that the Endowment can be established by the group of people/citizens who are not treated as the UBO’s of the Endowment in front of the local authorities and the banks, contrary to the classical LTD or a stock company. For the banks, the UBO is the person who manages the Endowment, which can be domestic or foreign citizen/resident. The founders are not shareholders or the owners of the Endowment, which legally disconnects them from the ownership or the status of UBO. This is a unique proposition comparing to other jurisdictions and entities where, according to the international laws and regulations, both founders and directors are treated as UBO’s.

2. A Serbian Endowment is fully supported by the local banks, according to the local and international laws imposed on the banking sector and it allows utilization of full scale of banking services. The banks are treating the managing director as the UBO, without any requests for the information and the KYC of the founders. The status of an Endowment is equal to the status of any classical local company.

3. The founders are fully protected from any legal risk in regard with an Endowment, and the commercial risk is limited to the activity of the elected Manager, which is completely equal to procedures and risks in any company. The founder/s can closely monitor the activity and the operations run by the Manager and can replace him at any point of time, just like in any other commercial company.

4. An Endowment can perform all business activities not prohibited by the Serbian law and not licensed by the local authorities, just like any company.

5. The founding of an Endowment takes less time, it is less expensive and the procedure to open a bank account is much easier, faster and practically 100% guaranteed. In other jurisdictions these kinds of entities can come under heavy limitations by the banks and can be obliged to release the full information regarding all founders, who will be treated as UBO’s and their information will be exchanged according to the international multilateral and bilateral agreements between the related countries.

6. A Serbian Endowment gives you the full freedom of operations and eliminates the possible and expectable risks imposed by the banks while performing bank transactions and operations according to the international regulations and compliance procedures. The flow of business and operations is not interrupted which results in the great efficiency of an Endowment in comparison to any other similar entity in the world.

7. An Endowment can own other companies and legal entities, which makes it the perfect and low-cost replacement for the Swiss Holdings and some other entities in leading jurisdictions with full tax advantages as well. A Serbian Endowment can own a Serbian Foundation which gives another protection layer for its founders.

8. Founder of an Endowment can be Serbian Association. In that case UBOs can have 100% privacy, which together with the main purpose of an Endowment – protection of assets, offers business solution that is better than the one of the standard European or Anglo-Saxon trusts.

9. An Endowment according to the Serbian law is fully regulated entity with the undisputable legal status just like any onshore company, but with advantages regarding the UBO status and the absence of exchange of information as well as the absence of commercial, political and legal risks.

10. An Endowment and the Serbian laws regulating its activity are very easy to comprehend and study independently for any potential founder, domestic or foreign, due to its simplicity and lack of complicated and sophisticated terminology. That gives the Founder/s much more independence in its actions and less operational issues during the lifetime of an Endowment.

11. An Endowment can be terminated with no complications and high costs, unlike all other similar entities in the world.