If you are looking for a place to relocate and/or start your business, consider Serbia. This is a truly recommendable destination for many reasons: you can take advantage of its political and economic stability, reasonable tax rates, excellent banking, relaxed way of life, European-quality living standards at prices that are still much lower than in Europe, and more. Starting a business is an easy way to acquire a residence permit, which may lead to Serbian citizenship in 5 to 7 years. As the country is about to join the EU, you have every chance to get an EU passport at that time! In short, Serbia gives great prospects that you can benefit from right now.
You can visit our portal and read a detailed article on what to expect after moving to Serbia. If you want to know more, you can use the search function and explore our knowledge base on Serbia: its lifestyle, business, banking, taxes, investment, real estate, and more. You can also book a session with our expert if you have any questions or doubts – or simply want to discuss your particular situation and make sure that Serbia is the country you need. We can also offer our services to you (like setting up a company or a bank account online) that we will provide at a moderate fee.
Business in Serbia
Serbia is a real draw for entrepreneurs from all over the world who want to establish a business in Europe as its taxes are among the lowest among European countries. It also has an advantageous geographical location as it is actually a bridge between the East and the West. You can take advantage of its excellent infrastructure and good trade connections with the EU and other countries. Serbia has concluded double taxation treaties and free trade agreements with many countries, which makes it even more attractive for business people.
Serbia has drawn a lot of foreign investors in recent years thanks to its attractive tax incentives and subsidies. The cost of living here is quite affordable, and the utility bills are among the lowest in Europe, which adds to its appeal for individuals and entrepreneurs.
Serbian Tax Residency
If you want to become a Serbian tax resident, you can do so if you fulfill one of the following two conditions:
- You actually live in Serbia for at least 183 days a year
- Serbia is recognized as the center of your vital interests
The second point requires one of the following:
- You buy real property in Serbia
- You live in the country along with your family members
- Your minor children are educated in Serbian institutions
The personal income tax in Serbia is paid on the worldwide income of its tax residents. It is payable if you work for a foreign company that resides in Serbia or if you are a non-resident who works for a Serbian company.
Let’s look at the personal income tax rates:
- There is a minimum amount that is not taxable (19,300 Serbian dinars, which equals 178 US dollars).
- If your annual income does not exceed the average annual salary in Serbia by more than 3 times (about 31,000 US dollars), your income tax rate will equal 10%.
- If your annual income exceeds the average annual salary in Serbia by more than 3 times but does not exceed it by more than 6 times (that is, from 31,000 to 61,300 US dollars), the rate will amount to 20%.
- Finally, if your income exceeds the average annual salary in Serbia by more than 6 times, you will have to pay 25%.
Employees pay health insurance, social, and pension contributions in the amount of 19.9% (while employers pay 16.15%).
Tax Rates for Freelancers
If you are a freelancer who wishes to relocate to Serbia, you will be liable for the following tax amounts:
- If you are a non-resident of Serbia, you only pay a personal income tax that you earn from clients based in Serbia, while the remaining tax will be paid at the place of tax residence.
- If you are a Serbian resident, you will pay taxes on your worldwide income. In addition, you will have to pay a social security tax of 36,55%.
Tax Rates for Companies
- The corporate tax rate amounts to 15%.
- The standard VAT rate is 20%. However, some essential products and services, like food, medicines, or public transportation services are taxed at 10%. No VAT is applicable on international air transportation, exported goods and services, and some specific services mostly related to exports.
- Practically all goods and services imported to Serbia are subject to customs duties in the range from 0% to 57.6%. The rate is less than 30% in most cases.
- Petroleum products, tobacco and related products, as well as alcoholic drinks are subject to excise duties.
- If companies own or use real estate in Serbia, they are subject to an annual property tax (it does not exceed 0.4%).
- If you sell property, you will have to pay a real estate transfer tax with the contract price being used as the tax base. It usually amounts to 2.5%.
- There are no stamp duties in Serbia.
- The capital gains tax for non-residents amounts to 20%.
Tax Incentives for Startups
Here are the benefits for those who launch a startup in Serbia:
- If the founder works in the company as an employee, he/she is subject to complete exemption from taxes and contributions in Serbia. However, the founder is only eligible if his/her salary amounts to at least 150,000 dinars (1,400 US dollars).
- If your company (which is not a startup) invests in a startup, it will be subject to a corporate income tax reduction in the amount of 30% of the total amount invested.
Tax Incentives for Employing Foreigners
Serbia actively stimulates the attraction of highly skilled professionals from abroad, so your company will be subject to tax incentives if it employs foreign workers. In particular, you will have the right to a 70% reduction in personal income tax for each foreigner you hire and a 100% reduction of obligatory disability insurance and pension contributions. These benefits make it possible for foreign entrepreneurs to move their companies to Serbia along with their employees.
Interested in living, working, or doing business in Serbia? Follow the link above to discover more and contact us: we will help you relocate without much hassle!