Introduction
An increasing number of foreign companies are choosing to expand their business into Serbia. Establishing a branch of a foreign legal entity can be a great way to enter the Serbian market while enjoying several strategic advantages. In this blog, we’ll walk you through all the steps required to open a branch in Serbia, explain the key legal terms, and offer practical advice.
What Is a Branch of a Foreign Legal Entity?
A branch of a foreign legal entity is a separate organizational unit through which a foreign company conducts its business activities in Serbia. Unlike a representative office, a branch can engage in all types of commercial operations, including signing contracts and providing services.
Legal Framework for Establishing a Branch
The establishment of a branch is governed by the Law on Companies and the Rulebook on the Content of the Register of Business Entities and the Required Documentation for Registration. A branch is not a separate legal entity but may operate in the name and on behalf of the foreign parent company.
Key Information Required in the Decision to Establish a Branch
The decision to establish a branch must include:
- Name and address of the branch
- Primary business activity of the branch
- Name of the branch representative and scope of their authority
- Name and registered seat of the registry where the parent company is registered
- Name, legal form, and seat of the parent company
- Registration number of the parent company
- Name or business name of the parent company’s legal representative
- Information about registered capital of the parent company (if required by its home country law)
- Email address for receiving electronic communication
Steps to Register a Branch
Collecting Documentation
To register a branch, the following documents are required:
- Decision to establish the branch
- Excerpt from the register where the foreign company is incorporated, with a certified translation
- Proof of account numbers used by the foreign company
- Statement by the authorized representative of the foreign company accepting responsibility for the branch’s obligations (with translation)
- Proof of identity
- Power of attorney for a lawyer
Filing the Application
Once the documents are collected, the next step is to submit a unified registration application to the Serbian Business Registers Agency (APR), along with proof of payment of the registration fee.
Operating the Branch
Legal and Tax Obligations
The branch must operate under the business name of the parent company, with a designation that it is a branch. It must also fulfill all tax obligations in accordance with Serbian law and is treated as a domestic tax resident.
Liability for Obligations
The branch is liable for its obligations with its own assets, while the parent company is jointly and fully liable for all branch obligations. If the branch cannot fulfill its obligations, the parent company is responsible for covering them.
Financial Reporting
At the end of the fiscal year, the branch is required to submit financial statements to the APR, just like any domestic business entity. The report must cover the period ending December 31 of the current year.
Bank Accounts for the Branch
Branches of foreign companies operating in Serbia are considered residents under the Law on Foreign Exchange Operations. This means they cannot use foreign bank accounts for business—only Serbian resident bank accounts are permitted. A branch may receive loans from the non-resident parent company, which must be deposited into its Serbian account. Funds may also be transferred abroad from this account, but only after taxes have been duly paid.
Advantages of Opening a Branch
Establishing a branch in Serbia offers many benefits, including:
- Increased presence in the local market
- Ability to sign contracts and operate directly in Serbia
- Tax incentives and access to local resources
Conclusion
Opening a branch of a foreign legal entity in Serbia can be a strategic move for companies looking to expand. With proper legal guidance and by following all regulatory requirements, the registration process can be smooth and efficient. If you’re considering this step, we recommend consulting lawyers who specialize in corporate law to ensure everything runs in full compliance.
For more information and legal support, Dvornić Law Office is at your service.
Note: This blog is for informational purposes only and does not constitute legal advice. For specific legal questions and support, please contact Dvornić Law Office.
