A branch opened in Serbia has the same rights to perform business activities just like any other local companies. The main difference is that the liabilities for its actions are taken by the foreign parent company and all its assets are shared with it.
There are some specific requirements for the registration of a branch and the documentation is vaster than for a regular company.
The Serbian branch must register the following with the Serbian Business Register Agency:
- the decision of opening a branch in Serbia,
- the proof that the foreign company is registered in the country of origin,
- the certificate of registration,
- the constitutive documents of the parent company,
- the company’s articles of association,
- the list of the company’s management board’s members and supervisory board’s members,
- the name of the branch and the reason why it is opened,
- the name of the representative and its powers.
All the above must be notarized and accompanied by the Serbian translation.
As a result, the branch opened in Serbia will receive the registration certificate, the tax identification number and the certificate from the pension and health funds.
Other requirements are to register to the tax authorities and to the Employment Organization Funds and to open a bank account for the future financial transactions.
The advantages of holding a branch in Serbia are especially of financial nature: if the country of origin has concluded a double tax avoidance agreement with Serbia, some of the withholding taxes on interests, royalties and dividends may be avoided and the corporate taxes can be exempt or refunded.
Another advantage is that there is no required minimal share capital at registration and the provided capital must be delivered by the foreign company.
In case the foreign company enters the process of liquidation, the Serbian branch’s assets may be shared between the creditors if the debts cannot be paid.
The branch establised in Serbia is managed by a representative invested with the power of attorney by the foreign country. The approval from the foreign company must be received before major decisions are taken. The branch cannot acquire shares in another company without the consent of the parent company.
Another requirement specific to the branches opened in this country is the obligation to register yearly the balance sheet and the statement of losses and profits of the foreign company at the Business Register Agency.
The branch that was set up in Serbia must also keep its own financial statements and deposit them every year. The VAT returns must be deposited every month, just like any other local company.