Foreign entrepreneurs in Serbia – a guide to establishment and business operations
An increasing number of foreign nationals are deciding to start a business in Serbia. One of the most common questions is whether a foreigner can register a sole proprietorship in Serbia, under what conditions, and what tax obligations they have.
The answer is – A foreign citizen can be an entrepreneur in Serbia.
Regarding the actual performance of entrepreneurial activity, foreign citizens are largely in the same position as domestic citizens. An entrepreneur can be a domestic or foreign natural person with legal capacity who performs an activity for the purpose of generating income.
However, for foreigners there are certain additional issues that need to be resolved, primarily regarding documentation, stay in Serbia, the right to work and tax residency.
Below, we will explain how a foreign national can register as a sole trader in Serbia, what the registration procedure looks like, what tax obligations they have, and what they should pay special attention to.
Do you need help with setting up as a sole trader?
Setting up a sole proprietorship in Serbia involves several important decisions — from choosing the activity and registered office to selecting the appropriate tax regime and registration with the Business Registers Agency (APR). If you want the incorporation process to be fast, simple and properly carried out, our lawyers can provide you with expert legal support from start to finish.
Contact us and start your businessCan a foreigner be an entrepreneur in Serbia?
Yes. A foreign national can register as a sole trader in Serbia.
Registration of an entrepreneur is carried out before the Business Registers Agency (APR), and a foreign citizen is identified during registration by means of an appropriate identification document, most commonly a passport.
The fact that a person is not a citizen of Serbia is not in itself a barrier to registering as a sole trader.
A foreigner may thus carry out various types of activities in Serbia, under the conditions that apply to the specific activity.
It is important, however, to distinguish registration of a sole trader from the rights of a foreigner to reside and work in Serbia. Registering as a sole trader does not automatically mean that all issues regarding residence and the right to work have been resolved.
How can a foreigner set up a business in Serbia?
The procedure for establishing a business for a foreign national is essentially similar to the procedure for domestic citizens.
Before registration, it is necessary to determine several basic business elements.
1. Selection of business activity
The first step is choosing the activity that the entrepreneur will engage in.
During registration, the appropriate activity code is selected according to the activity classification.
For certain activities, there may be special conditions, permits, licences or approvals from the competent authorities.
That is why it is important to check whether there are any special legal requirements for the specific activity before registering.
2. Company name and registered office
An entrepreneur must have a registered business name and headquarters in Serbia.
The registered office represents the address at which the sole trader is registered and to which official documents can be delivered.
For a foreigner who does not yet have a business presence in Serbia, this is one of the issues that needs to be resolved before submitting the registration application.
3. Registration with the Business Registers Agency
Registration of a sole trader is carried out with Business Registers Agency.
During registration, a foreign citizen submits the appropriate identification documentation, and the data regarding the foreign individual are entered into the register in accordance with the rules of the Business Registers Agency.
Registration can be carried out in person, but the procedure may also be conducted through an authorised representative.
This is especially practical for foreigners who are outside of Serbia at the time of incorporation.
Does a foreigner have to be in Serbia personally?
A foreigner does not have to be personally in Serbia to set up a sole proprietorship.
Depending on the specific procedure and the required documentation, a foreign national may authorise a commercial law attorney or another authorised person to take the necessary actions on their behalf before the competent authorities.
In this way, it is possible to organise a large part of the procedure without the foreign national coming to Serbia.
However, for certain actions there may be specific requirements regarding signatures, legalisation of documentation, opening a bank account or other formalities.
Therefore, it is advisable to check which documentation is required for your specific case before coming to Serbia.
Can a foreigner be a lump-sum taxpayer in Serbia?
Yes.
Citizenship in itself is not an obstacle to lump-sum taxation.
If a foreign national meets the legal requirements for flat-rate taxation, they can be a flat-rate entrepreneur under the same general tax conditions that apply to other entrepreneurs.
Whether a specific entrepreneur will be able to be taxed on a lump-sum basis depends on several factors, including the type of activity, generated income, and other conditions prescribed by law.
Therefore, when setting up as a sole trader, it must be checked whether the specific activity and the planned method of operation meet the conditions for lump-sum taxation.
You can read more about flat-rate taxation in our guide:
What taxes and contributions does a foreign entrepreneur pay?
A foreign national operating as a sole trader in Serbia may have an obligation to pay tax and social security contributions in accordance with Serbian tax regulations.
Specific obligations depend on the method of taxation and the circumstances of the individual entrepreneur.
Depending on the case, obligations may exist on the basis of:
- tax on income from self-employment;
- mandatory social security contributions;
- value added tax (VAT), provided that the legal conditions are met;
- other tax liabilities that may arise from the specific activity.
It is important to note that Citizenship in itself does not determine the tax treatment of an entrepreneur.
For foreigners, however, the issue of tax residency is particularly important.
Does a foreign national have to have a residence permit?
Registration of a sole trader and regulation of stay in Serbia represent two separate legal issues.
Simply establishing an unincorporated enterprise does not automatically mean that a foreign national has an unlimited right of residence or work in Serbia.
If a foreigner is planning to move to Serbia and personally perform an activity from Serbia, it is necessary to specifically check the conditions for regulating their residence and right to work.
This is particularly important for foreigners planning to live and do business in Serbia long-term.
You can read more about temporary residence for foreigners here.
Sole trader or LLC – which is better for a foreigner?
A foreign citizen who wants to start a business in Serbia most often considers two options – registration entrepreneur or establishment limited liability companies (LLCs).
Both business models have their advantages and disadvantages.
A sole trader is usually simpler and cheaper to set up and administer, particularly when it comes to a business run by a single person.
On the other hand, an LLC represents a separate legal entity, which may be more suitable for larger business ventures, multiple founders, capital investment, or operations where the liability structure is particularly important.
As for a sole trader, for business obligations the sole trader as a rule is liable with all of their property.
Therefore, the choice between a sole trader and a limited liability company (LLC) should not be made solely on the basis of registration costs, but also on the nature of the business, expected revenue, business risks and tax treatment.
Can a foreigner open a bank account for a sole trader?
Following the registration of the sole trader, it is necessary to organise business operations through an appropriate bank account.
For foreign nationals, the bank may request additional documentation compared to domestic citizens.
Specific requirements depend on the bank and the status of the foreign national, so it is advisable to check in advance what documentation is required.
Recap:
A foreign national can register as a sole trader in Serbia and carry out business activities under the conditions that generally apply to domestic sole traders.
Citizenship alone is not an obstacle to setting up a sole proprietorship nor to using certain tax regimes, including lump-sum taxation, provided that the legal conditions are met.
However, foreigners need to pay special attention to:
- the documentation required for registration;
- choice of activity;
- sole trader's registered office;
- tax regime;
- tax residence;
- right of residence in Serbia;
- right to work;
- opening a bank account;
If you are a foreign national and wish to start a business in Serbia, please contact to the corporate lawyer, which can provide you with legal support in the process of registering a sole proprietorship, preparing documentation, choosing the appropriate business structure and other legal issues related to the business operations of foreigners in Serbia.
