The process of opening a company in Serbia is quite complicated and can take some time.
Establishing a company in Serbia usually involves collecting extensive documentation, a lot of patience and a certain amount of money. Fees for registration and other services provided by the Agency for Business Registers (APR) based on registration applications submitted in paper form have been increased by an average of six percent since January 1 of this year. Previously, these amounts have not been changed since 2014.
The fee for the registration of the establishment of a business entity, which is registered in the APR in the Register of Business Entities (business company, public company, cooperative, cooperative union, branch of a foreign business company and representative office of a foreign business company) with the registration of the prescribed documents, amounts to a total of 6,500 dinars, and if the application for registration is electronic, the fee is 5,900 dinars. Deletion of a business entity costs 3,300 dinars.
On the other hand, height the fee for registering the establishment of an entrepreneur is 1,600 dinars, and for submitting an electronic application it is 1,500 dinars. The fee for deleting an entrepreneur is 1,300 dinars. Opening a company in Serbia is complicated for foreigners
According to the coordinator of the Business Support Network, Dragoljub Rajić, the registration process itself is not that complicated today, and everything is completed in five to 15 days.
“Perhaps it can be even faster, but it usually happens that people bring some incomplete information, so the Agency for Business Registers asks them to correct or supplement it. The process itself is not complicated because with 100 dinars of founding capital, which you don’t even have to enter, you can you establish a limited liability company (d.o.o.), while you don’t even have to have capital for an entrepreneurial activity. At the moment of registration, you will pay a flat tax to the state until your turnover exceeds six million dinars,” explains our interlocutor.
How is it in BiH, Slovenia?
As for the region, he states that the situation is more or less similar everywhere. For example, in Bosnia and Herzegovina it is still possible to register a company in court, while in Slovenia it is a practice that everything can be completed electronically in one to two days, and this country is ahead of the others.
“All countries were looking to simplify that procedure through the digitization process. When we look at some other things, they are complicated both here and in some countries of the region. When you have more members of a limited liability company and when some of them come from European Union countries, you have a situation where these people usually have to come in person. If you choose a foreigner as the founder of the company and at the same time appoint him to be the director, he has to be present until the paperwork is completed. This is something that makes the functioning of the company quite difficult in practice, and that is in the EU resolved differently,” Rajić emphasized and added that in the European Union, everything can be completed electronically through a notary or with authorization.
He also states that there is another difficulty when opening a bank account. “When you go to the bank to open an account after opening a company, that procedure is also quite complicated. There are a lot of checks and it can take up to a month“, assessed Rajić.
Starting a company usually starts with the first project
Companies are founded, as our interlocutor says, only when there is a prospect of doing the first job, in order not to accumulate costs and duties. “When you open a company, even if it does not enter the VAT system at the very beginning, you have to pay the accountant monthly, which is from 120 to 250 euros. You also have to authorize one person as a director and he must pay contributions on a minimum basis even when the company has no income, which can range from 8,000 to 35,000 dinars per month,” says Rajić.
So, already at the start, the basic costs are from 250 to 350 euros, and if the company cannot work and function within a few months, the business is in the red by almost 1,500 euros.
“In developed EU countries, for example in Germany, you cannot open a company if you do not initially employ one person. It is similar in Austria, but also in France or Great Britain. So, in large countries with a large market, it is considered that you have to you have some initial capital, because it is actually a guarantee that the company will operate stably, that it is not founded due to some fraud or manipulation with money. In our country and in the region, there are no defined criteria, but then again, the conditions in which we live and work are not nowhere near as in more developed countries“, emphasized our interlocutor.
Different conditions for starting a business in the EU
He points out that even in the European Union it is not easy to get information on how much funds are needed for establishment. Namely, if the company has a founding capital of less than a certain amount, in some EU countries it is not possible to fulfill the condition for opening a company.
“In Germany, it is understood that you must have a founding capital of 50,000 to 100,000 euros., because you need to run that company for several years. For Germans, it’s not a lot of money. Some countries also have a category of self-employment, as is the case with us. Many states in their acts do not even treat such a form as a company, but as a person that generates income on the market, and a company is considered to be a person that has invested money in a company and that is engaged in some specific activity that includes other companies. The Germans have roughly such a classification, and most European countries have accepted it,” Dragoljub Rajić points out.
Therefore, in Germany and certain EU countries, those who are self-employed do not have the same status as entrepreneurs and limited liability companies in Serbia, where only limited liability companies have an additional obligation to keep business books.
“We have a mitigating circumstance in our country, which is that the Tax Administration has recently begun to publish the tax calendar more fully, but a good part of these obligations can be variable in relation to how much turnover you achieve. Companies are also very interested in deadlines, because the collection in Serbia is slow, and VAT is reported until the 10th of the month for the previous month and then you have to pay it, so the question is how you will survive that period of, say, three to four months while you wait for the money,” concluded Rajić.
Italy the most expensive in Europe
According to the latest data from the World Bank and the project “Doing Business” on the costs and procedures required to start a small to medium-sized company with limited liability in each country, in 2020 in Europe there were 11 countries with start-up fees of more than $1,000but it was noted that in them the average monthly salary is more than 2,000 dollars.
It is said to be almost imperceptible in countries such as Norway or Switzerland, where a monthly salary of around $5,500 covers four such fees, but it is not so affordable in Italy, where the highest costs for starting a business in Europe ($4,895) are twice the average monthly income – $2,403.
On the other hand, 12 countries had fees less than $100. Great Britain is one of the cheapest places to start a business, because there was a fee of 12 pounds when registering a company. When it comes to Serbia, the data from this analysis showed that the average cost for starting a business is more than 110 dollars, which is more than 20 percent of the average monthly income. Let’s recall that in 2021, the European Union had 30.1 million companies employing 155 million people. Of that, 99 percent were micro and small enterprises (0-49 employees), of which there were 29.9 million and which together employed 75.3 million people, that is, almost half of the total number of employees in all companies.
Last year, 9,635 companies were founded in Serbia, which is 459 more than in 2020, or 478 more than in 2019, according to APR data.
(MONDO/Biznis.rs)