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Serbia, formally the Republic of Serbia, is a landlocked Southeast European republic located at the crossroads of the Pannonian Plain and the Balkans. It has land borders with Hungary to the north, Romania to the northeast, Bulgaria to the southeast, North Macedonia to the south, Croatia and Bosnia and Herzegovina to the west, and Montenegro to the southwest, as well as a disputed boundary with Albania via Kosovo. Serbia and Kosovo have a combined population of around 8.6 million people. Its capital and biggest city is Belgrade.
The territory of modern-day Serbia has been continuously inhabited since the Paleolithic Age, and Slavic migrations in the 6th century resulted in the establishment of several regional states in the early Middle Ages, at times recognized as tributaries to the Byzantine, Frankish, and Hungarian kingdoms. In 1217, the Holy See and Constantinople recognized the Serbian Kingdom, which grew to become the Serbian Empire in 1346. The Ottomans had absorbed the all of modern-day Serbia by the mid-16th century; their reign was sometimes interrupted by the Habsburg Empire, which started moving into Central Serbia at the end of the 17th century while keeping a footing in Vojvodina. The Serbian Revolution in the early nineteenth century created the nation-state as the region's first constitutional monarchy, which later extended its borders. Following World War I fatalities and the subsequent merger of the former Habsburg crownland of Vojvodina with Serbia, the country co-founded Yugoslavia with other South Slavic states, which lasted until the Yugoslav Wars of the 1990s. Serbia created a union with Montenegro after the disintegration of Yugoslavia, which was peacefully dissolved in 2006, restoring Serbia's independence as a sovereign state for the first time since 1918. The Assembly of Kosovo unilaterally proclaimed independence in 2008, eliciting varied reactions from the international world, while Serbia continues to claim it as part of its own sovereign territory.
Serbia is an upper-middle-income country that ranks 64th on the Human Development Index. It is a unitary parliamentary constitutional republic that is a member of the UN, CoE, OSCE, PfP, BSEC, CEFTA, and is in the process of joining the WTO. The nation has been discussing its EU admission since 2014, with the goal of joining the European Union by 2025. Serbia nominally maintains a policy of military neutrality. The nation offers its residents universal health care as well as free basic and secondary education.
Each year, employees are given 20 days of paid vacation.
Serbia recognizes twelve public holidays.
Paid sick leave can be used for as long as you need it, as long as you have a doctor's certificate, which you must file with the health insurance administration. Employees receive 65 percent of their income for sickness/injury not linked to work for the first 30 days, and 100 percent if it is connected to work. Payment is made by the state, not the employer, after 30 days.
The combined pregnancy and maternity leave is 365 days long.
There is no particular paternity leave, however the father may take maternity leave if the mother is unable to care for the infant during that time.
Employers must provide a written explanation and at least eight days' notice if the termination is for cause. The explanation must include the cause for dismissal, supporting documentation, and a chance for the employee to react. Failure to follow the procedure may result in the dismissal being declared invalid by a court.
Employers must provide at least eight days notice. Employees who wish to terminate their employment must give 15 days notice. A 30-day notice period is required in the event of layoffs.
In Serbia, probationary periods should not exceed six months, during which time either party may terminate the relationship with five days' notice.
Severance pay of at least 1/3 of regular salary for each year worked is required in the event of layoffs.
In Serbia, the standard work week is 40 hours spread over five days and cannot be less than 36 hours per week. Workers in particularly difficult or dangerous jobs may have their hours reduced to 30 per week, even after appropriate safety measures are implemented. Employees may be required to work overtime only in exceptional circumstances.
Overtime hours are limited to four per day and eight per week, and employees are compensated at 126 percent of their standard hourly rate for overtime hours worked. On a public holiday, employees are compensated at 110% of their standard rate. Employers are required to keep track of all overtime hours worked.
Employees who work between 10 p.m. and 6 a.m. on a regular basis are compensated at 126 percent of the standard hourly rate. A worker must consent to working nights for a period of more than one week.
Pregnant women are not permitted to work overtime or at night during the first 32 weeks of pregnancy unless their doctor determines that there is a risk to their health or the health of their baby, and they are not permitted to work overtime or at night during the final eight weeks.
Serbia's hourly minimum wage is 183.93 Serbian dinars (RSD) as of 2021.
Serbia has a universal healthcare system. There is the option of purchasing private health insurance.
Mandatory benefits postulated by law include a probationary period, pay on annual leaves, public holidays, sick leaves, maternity leave, paternity leave, and overtime pay. Statutory benefits also include social security benefits.
Residents are taxed on their Serbian income as well as on global income. Non-residents are solely taxed on income generated by a permanent establishment (PE) on Serbian territory.
Corporate income tax is levied at a rate of 15%.
Residents are taxed on their global income, while non-residents are taxed on their Serbian-sourced income as well as on worldwide revenue from employment in/for the Republic of Serbia.
Tax rates are flat, ranging from 10% to 20%, and the definition of the taxable base varies depending on the kind of income.
For most taxable supplies, the normal VAT rate is 20%. Basic food items, daily newspapers, medications, publications, public transit services, utilities, and so on are subject to a 10% VAT reduction.
In addition to these tax rates, there is a 0% tax rate with the right to deduct input VAT that applies to the export of products, transportation, and other services directly connected to exports, international air transport, and so on.
Trading in shares and other securities, insurance and reinsurance, and leasing of apartments, company premises, and so on are all subject to a 0% tax rate with no opportunity to deduct input VAT.
There are various criteria for each category of Serbian visa, however the details differ. A valid passport and pictures, a letter of invitation from a Serbian firm, application forms, application costs, evidence of medical insurance, and proof of cash are some of the common criteria.
Your potential employee should engage with the Serbian Ministry of Interior Affairs to provide all necessary documentation and application forms to their local embassy/consulate in order to get a work visa. For tourists and employees, Serbia offers a variety of visas. However, the most common visas sought by foreign workers are C visas for stays of less than 90 days and D visas for stays of more than 90 days.
Work permit applications must be completed by the employer. To begin, the business must communicate with the National Employment Service to establish that no Serbians are qualified to fill the post in issue. If no Serbs are available, the employer may apply for a work permit. The Type D Work Permit is the most often sought work permit in Serbia, and it is intended primarily for foreigners who are visiting Serbia on a temporary basis. It is valid for one year and may be extended for another year. It normally takes three weeks to complete the procedure.
Both the employer and the employee must sign the employment contract in writing. The employer keeps two copies and gives one to the employee. A probationary term of no more than six months may be included in the employment contract. Furthermore, for each year of service with the same company, all workers are entitled to a predetermined salary increase.
In Serbia, employment contracts might be for an indefinite or a specified period of time. A fixed-term contract, in general, cannot last more than 24 months and is only permitted for labor on a particular project, the replacement of a temporarily absent employee, and certain other legally recognized objectives. In exceptional cases, the sentence might be extended to 36 months.
Serbian Dinar
If you opt to go through the Serbia subsidiary creation procedure on your own, you must first investigate where you want to incorporate and what entity is ideal for your company. Serbia's subsidiary laws might vary by location and region, making incorporation in specific areas challenging at times. Always do your homework on the actual office location you've chosen to understand how the subsidiary procedure works there.
A limited liability company (LLC), a public limited company, a branch office, and a representative office are all accessible for formation in Serbia. Many businesses opt to establish as an LLC since it benefits both the parent and the subsidiary. The following actions are required to establish a Serbia subsidiary as an LLC:
1. Filling out an incorporation application online or in person at the Serbian Trade Register
2. Appointing at least one Serbian native-born representative
3. The Republic Statistical Agency receives official registration data.
4. In Serbia, you may register with the Pension, Employment, and Health Fund.
5. Obtaining the necessary funds and papers
6. Opening a bank account in Serbia
7. Online or in-person registration with tax authorities
The full Serbia subsidiary formation procedure may be time-consuming, since creating a bank account alone can take four to five weeks. If no one in your firm speaks Serbian, we propose employing one, outsourcing, or using a worldwide PEO.
Serbia's subsidiary laws differ depending on the structure chosen. LLCs must have at least one director and one shareholder of any nationality. To establish a Serbia subsidiary, you will require little more than $1 in minimum paid-up share capital, as well as the appointment of a company secretary.
Aside from hiring a natural-born Serbian representative, you'll also require a qualified auditor to conduct a yearly audit. Before incorporation, a real office location is also required. To comply with Serbia subsidiary rules, your LLC's statutory and accounting documents must be accessible at that physical address in Serbia.
