Employing in Serbia

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Expanding into
Serbia

Global expansion is a step to make for any business, regardless of what you wish to achieve. The opportunities that can come with an expansion can be both incredibly exciting as well as intimidating and confusing, especially when you consider all of the registration procedures that needs to be done and documentation required.

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Expanding to countries such as Serbia – which is characterized by a diverse and dynamic workforce, strong employment and tax laws, a robust infrastructure network linking to both Europe and Asia, and leading sectors in energy, automotive industry, machinery, mining, and agriculture – can bring both excitement to the possibilities, but also significant stress to ensuring the entity with the country’s rigorous legal structures and laws.

Ensuring compliance without the sufficient knowledge of the country’s laws also adds to the stress of getting your new entity off the ground and ready to test new markets. Going at it without the proper support can increase the costs, time and risks involved.

Each new markets bring new challenges, and these can be worked through more efficiently and cost-effectively with the support of an International Professional Employer Organization (PEO) such as Bradford Jacobs, especially through our Employer of Record (EOR) framework.

This can be best utilized when businesses are just beginning their expansion process and require more information before committing to incorporating an entity and fully establishing themselves in that market.

Country EOR Guide - Bradford Jacobs

Download our Guide to Serbia

Learn all about expanding into Serbia and see what we can do to make your expansion easier.

Download our Guide to Serbia

Learn all about expanding into Serbia and see what we can do to make your expansion easier.

Country EOR Guide - Bradford Jacobs

Hiring Staff
in Serbia

Hiring Staff
in Serbia

The Main Sectors of the Serbian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

The agricultural industry tends to perform well in Serbia due to its favorable weather conditions and large amount of available land – about 5 million hectares, of which 3.3 million is arable land.

Agricultural exports contribute one-fifth of all Serbia’s sales on the world market. Serbia is among the largest provider of fruits to the EU market, with Germany and France constituting the larger portion of the market.

Agricultural production is allocated between crop cultivation and livestock (and poultry) at a ratio of 70% and 30% respectively. Animal products that are exported include pork meat, dairy, poultry, and beef.

Whilst Serbia is not a mass-tourism destination, it nevertheless has a diverse range of touristic products. In 2019, there was a total of over 3.6 million tourists recorded in accommodations, with half being foreign. Foreign exchange earnings from tourism were also estimated at $1.5 billion.

Tourism is mainly focused on the mountains and spas of the country, which are mostly visited by domestic tourists, as well as Belgrade Novi Sad, which are preferred choices of foreign tourists (almost two-thirds of all foreign visits are made to these two cities).

This industry is dominated by mining, food processing, automotive, base metals, pharmaceuticals chemicals, textiles, and chemicals. The country is also popular for its manufacture of the famous Tesla smartphones.

The automotive sector provides employment for over 40,000 people, accounts for 10% of exports and 14% of foreign investments in Serbia.

Serbia is a country that is rich in mineral resources such as coal and gold. Since mining is a capital-intensive venture, the country has opened its doors to foreign investors. Many foreign companies engaged in mining come from Canada and the USA.

There are also over 100 exploration fields in Serbia, with foreign companies investing USD10-100 million every year for geological exploration. Serbia is the 18th largest producer of coal in the world, as well as the 23rd largest producer of copper in the world.

Serbia is believed to own mineral resources worth USD 263 billion. However, only USD 3.7 billion is mined.

This industry is primarily located in the country’s capital and has grown rapidly due to the modernization of Serbia’s three major cities (Novi Sad, Belgrade, and Niš). Between 2016 and 2020, the levels of output in building construction almost doubled. The total amount grew from €900 million in 2016 to €1.7 billion in 2020, with a strong contribution of residential, commercial, and industrial sub-segments.
Serbia has a strategic transportation location since the country’s backbone, Morava Valley, represents by far the easiest route of land travel from continental Europe to Asia Minor and the Near East.

Serbian road network carries the bulk of traffic in the country. Total length of roads is 45,419 km of which 782 km are motorways; 4,481 km are national roads; 10,941 km are regional roads; and 23,780 km are municipal roads.

The Main Sectors of the Serbian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Tara mountain, Serbia
The agricultural industry tends to perform well in Serbia due to its favorable weather conditions and large amount of available land – about 5 million hectares, of which 3.3 million is arable land.

Agricultural exports contribute one-fifth of all Serbia’s sales on the world market. Serbia is among the largest provider of fruits to the EU market, with Germany and France constituting the larger portion of the market.

Agricultural production is allocated between crop cultivation and livestock (and poultry) at a ratio of 70% and 30% respectively. Animal products that are exported include pork meat, dairy, poultry, and beef.

Whilst Serbia is not a mass-tourism destination, it nevertheless has a diverse range of touristic products. In 2019, there was a total of over 3.6 million tourists recorded in accommodations, with half being foreign. Foreign exchange earnings from tourism were also estimated at $1.5 billion.

Tourism is mainly focused on the mountains and spas of the country, which are mostly visited by domestic tourists, as well as Belgrade Novi Sad, which are preferred choices of foreign tourists (almost two-thirds of all foreign visits are made to these two cities).

This industry is dominated by mining, food processing, automotive, base metals, pharmaceuticals chemicals, textiles, and chemicals. The country is also popular for its manufacture of the famous Tesla smartphones.

The automotive sector provides employment for over 40,000 people, accounts for 10% of exports and 14% of foreign investments in Serbia.

Serbia is a country that is rich in mineral resources such as coal and gold. Since mining is a capital-intensive venture, the country has opened its doors to foreign investors. Many foreign companies engaged in mining come from Canada and the USA.

There are also over 100 exploration fields in Serbia, with foreign companies investing USD10-100 million every year for geological exploration. Serbia is the 18th largest producer of coal in the world, as well as the 23rd largest producer of copper in the world.

Serbia is believed to own mineral resources worth USD 263 billion. However, only USD 3.7 billion is mined.

This industry is primarily located in the country’s capital and has grown rapidly due to the modernization of Serbia’s three major cities (Novi Sad, Belgrade, and Niš). Between 2016 and 2020, the levels of output in building construction almost doubled. The total amount grew from €900 million in 2016 to €1.7 billion in 2020, with a strong contribution of residential, commercial, and industrial sub-segments.
Serbia has a strategic transportation location since the country’s backbone, Morava Valley, represents by far the easiest route of land travel from continental Europe to Asia Minor and the Near East.

Serbian road network carries the bulk of traffic in the country. Total length of roads is 45,419 km of which 782 km are motorways; 4,481 km are national roads; 10,941 km are regional roads; and 23,780 km are municipal roads.

Commercial Laws in
Serbia

  • The Serbian Tax Administration – Forming part of the Ministry of Finance of The Republic of Serbia, the Tax Administration is the government administration authority, which carries out the assessment, audit, and collection of public revenues.
  • The Ministry of Labor, Employment, Veterans’ Affairs and Social Affairs – this government entity performs state administrative tasks that are related the system in the field of labor relations and labor rights in all forms of work except in state bodies and bodies of local self-government and autonomous provinces, public agencies, and public services.They also work on Safety and Health issues at work, carry out inspection supervision in the field of labor relations and safety and health at work, and trade union organization – amongst other projects including labor and employment.

In Serbia, general considerations applying to all contracts include:

  • The Labor Law (2005) stipulates that an agreed contract must be concluded in writing before the employee starts work.
  • The contract must give full names and addresses of both parties; place of work, job title and description of role; start date of employment; salary and payment schedule; working hours; whether the contract is indefinite or fixed-term, with end date for fixed-term; any benefits.
  • If the contract does not specify either indefinite / open-ended or fixed term it is automatically deemed open-ended. Where an employee is asked to work for more than five days after the end of a fixed-term contract, the contract becomes indefinite.
  • Unless covered by contract, notice periods range between eight and 30 days, depending on the employee’s contributions to the pension insurance fund.
  • Employees should ask for the contract to be translated into their native language so they can fully understand the terms.
  • Apart from the specific terms, employees must be given their formal written contract no later than the first day of employment.
  • The contract should be in a language fully understood by all involved parties, whatever their nationality, although it may be drawn up in the local language. English is frequently used in employment contracts.
  • Mandatory information required for all contracts includes identities and addresses of all parties, employment start date, place, and type of work, working hours, annual leave, notice periods, type of contract and any trial period contract.

For more information on labour contracts law in Serbia Download our Serbia Country Guide…

Income Tax: Liability depends on residence and types of income. Persons are considered tax residents if Serbia is their place of economic and personal interest, and they live there for at least 183 days in a 12-month period. They are taxed on their worldwide income. Non-residents are those who do not fit those criteria and they are taxed on income earned in Serbia.

A flat rate of 10% applies to taxable income from employment and fringe benefits. Rates between 10% and 20% apply to income from business, investments, property, and capital gains. There is a tax-free allowance of RSD 19,300 (€164, US$186) as of January 2022.

Health and Social Insurance: Serbia’s Social Insurance Institute (Zavod za Socijalno Osiguranje, ZSO) is responsible for the regulations, laws and by-laws covering such as social insurance contributions, retirement, disability, maternity, health and unemployment insurance and benefits.

For more information on tax contributions and benefits Download our Serbia Country Guide…

Commercial Laws in
Serbia

St. Petka Church, Belgrade Fortress Kalemegdan in Belgrade, Serbia
  • The Serbian Tax Administration – Forming part of the Ministry of Finance of The Republic of Serbia, the Tax Administration is the government administration authority, which carries out the assessment, audit, and collection of public revenues.
  • The Ministry of Labor, Employment, Veterans’ Affairs and Social Affairs – this government entity performs state administrative tasks that are related the system in the field of labor relations and labor rights in all forms of work except in state bodies and bodies of local self-government and autonomous provinces, public agencies, and public services.They also work on Safety and Health issues at work, carry out inspection supervision in the field of labor relations and safety and health at work, and trade union organization – amongst other projects including labor and employment.

In Serbia, general considerations applying to all contracts include:

  • The Labor Law (2005) stipulates that an agreed contract must be concluded in writing before the employee starts work.
  • The contract must give full names and addresses of both parties; place of work, job title and description of role; start date of employment; salary and payment schedule; working hours; whether the contract is indefinite or fixed-term, with end date for fixed-term; any benefits.
  • If the contract does not specify either indefinite / open-ended or fixed term it is automatically deemed open-ended. Where an employee is asked to work for more than five days after the end of a fixed-term contract, the contract becomes indefinite.
  • Unless covered by contract, notice periods range between eight and 30 days, depending on the employee’s contributions to the pension insurance fund.
  • Employees should ask for the contract to be translated into their native language so they can fully understand the terms.
  • Apart from the specific terms, employees must be given their formal written contract no later than the first day of employment.
  • The contract should be in a language fully understood by all involved parties, whatever their nationality, although it may be drawn up in the local language. English is frequently used in employment contracts.
  • Mandatory information required for all contracts includes identities and addresses of all parties, employment start date, place, and type of work, working hours, annual leave, notice periods, type of contract and any trial period contract.

For more information on labour contracts law in Serbia Download our Serbia Country Guide…

Income Tax: Liability depends on residence and types of income. Persons are considered tax residents if Serbia is their place of economic and personal interest, and they live there for at least 183 days in a 12-month period. They are taxed on their worldwide income. Non-residents are those who do not fit those criteria and they are taxed on income earned in Serbia.

A flat rate of 10% applies to taxable income from employment and fringe benefits. Rates between 10% and 20% apply to income from business, investments, property, and capital gains. There is a tax-free allowance of RSD 19,300 (€164, US$186) as of January 2022.

Health and Social Insurance: Serbia’s Social Insurance Institute (Zavod za Socijalno Osiguranje, ZSO) is responsible for the regulations, laws and by-laws covering such as social insurance contributions, retirement, disability, maternity, health and unemployment insurance and benefits.

For more information on tax contributions and benefits Download our Serbia Country Guide…

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