Serbia Country Facts
We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in your country of choice and employment contracts.
Global Expansion Made Easy for You
Expanding into Serbia generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.
Serbia Visas, Work Permits and Migration
If you are thinking of expanding your business into Serbia, companies can take advantage of the growing economy which has plenty of the opportunities, challenges, and advantages of a developing country. However, one of the areas where you cannot risk cutting corners over is work permits, visas, and residency. There are strict border controls, so do not risk fines, sanctions or even having your staff deported through lacking knowledge of the rules.
Serbia has many bilateral agreements with other nations. Around 96 countries’ citizens can enter without a visa. When Serbia becomes a member of the European Union – planned for 2025 – its members’ citizens will have the right to ‘free movement’ to visit, live and work in Serbia with just their national ID or passport. Until then, expatriates wanting to work in Serbia need a work permit and temporary residence permit.
Serbia is also a member of the mini-Schengen agreement – the Open Balkan as it is known. By 2023 Albania, Serbia and Macedonia are looking to open their borders for business and travel.
What Types of Work Visas, and Permits for Serbia are there?
There are around 96 countries’ citizens who do not require an entry visa. For some countries, the rule is 90 days in a 180-day period, for others it can be as little as 14 days, so this needs to be checked. Those who are not visa-exempt need to apply for a C-Visa for less than 90 days. Foreigners who want to stay for longer, should apply for a D-Visa.
Those wanting to work in Serbia require:
- An entry D-Visa (for work) for stays from 90 to 180 days which allows for a temporary residence stay
- A work permit – valid between three – 12 months
- A temporary residence permit for up to one year which can be applied for once in Serbia and the D-visa expires
The law that governs foreigners wanting to live and work in Serbia is the Law on Employment of Foreign Nationals which covers the need for a Temporary or Permanent Residence Permit and Work Permit and also gives foreigners the same employment rights as local Serbians.
It is important to note that there are high level unemployment levels in Serbia, and therefore it is better to find a job before entering the country. This can be done through the ‘National Employment Service (NES), through the press, agencies and the internet. The more qualified the applicant, the more choice there will be, and language also plays an important part; so, a good working knowledge of Serbian may be a pre-requisite.
Visas for Serbia
- Short Term C-Visa: For stays of 90 days in 180-day period. This can be single or multiple entry and for tourist or business purposes but not for paid employment
- Long Term (Work) D-Visa: which gives permission for a temporary stay, for foreigners who intend to apply for a temporary residence permit when in Serbia
Work Permits
There are two types of work permit.
- Personal Work Permit: persons with permanent residence or with refugee status or who have family connections in Serbia
- Simple Work Permit: which is the more common permit for foreigners applying for work in Serbia from home country with an employment contract; self-employment; special cases for employment e.g., intra-company or assigned to a company in Serbia
Foreigners entering Serbia using the visa-exemption route cannot apply for a Temporary Residence Permit directly, they must first apply for the D-Visa. On entering Serbia, they also need to register within 24 hours with the police for hotel guests, or when staying with a tax resident. They are given a ‘white card’ which is important when leaving the country and also carries fines if foreigners do not have one – RSD 5,000-25,000 (€42-210) (US$480-240). They are also a pre-requisite for a 12-month Temporary Resident Permit.
Foreigners must check they have an entry stamp in their passports even if they do not require a visa to enter Serbia.
Serbian Tax Laws
Dealing with tax, payroll, and employment regulations for your staff from overseas is always a tricky process and poses complications that demand expert guidance. Serbia is no exception, with an unusual approach to assessing personal income tax, in addition to corporate taxes across various categories.
Bradford Jacobs’ dedicated specialists remove the burdens of worrying about these complications while you focus on building your business in a new territory. From locating the brightest talent to running your payroll, our Professional Employer Organisation (PEO) and Employer of Record (EOR) specialists are with you every step of the way.
Our guide unravels the ‘red tape’ and highlights how Bradford Jacobs will assist your company with untying the knots – and avoiding the hazards!
Overview of Taxes in Serbia
* Serbia is not a member of the European Union, until at least 2025, or the Eurozone and uses the dinar (RSD) as its currency.
- Residents’ Personal Income Tax (PIT): The tax-free allowance is RSD 19,300 (€164, US$186) as of January 2022. Residents are taxed 10% on employment income including bonuses, fringe benefits and overtime. Rates between 10% and 20% apply to business income, dividends, property.
- Social Insurance Taxes: Employers contribute the equivalent of 16.15% from employees’ gross salaries to pension, disability, and health insurance funds. Employees contribute 19.90% to the funds.
- Corporate Income Tax (CIT): The standard rate is 15% on worldwide taxable profits for resident companies. Non-resident companies are taxed on Serbia-sourced income.
- Capital Gains Tax (CGT): Residents are taxed at 15%, non-residents at 20%.
- Withholding Tax (WHT): Withholding tax on dividends, royalties and interest paid to non-residents is 20%. Some fees paid for technical services attract 25% WHT.
Serbia Individual Tax – Single, Married
Liability for personal income tax is based on residency and categories of income. Individuals whose personal and economic base is in Serbia and who reside there for more than 183 days in a 12-month period are residents and are taxed on their worldwide income. Those who are not based in Serbia and do not reside there for more than 183 days are non-residents and taxed only on Serbian-sourced income. Joint filings are not allowed, and married couples must file separate returns.
* Serbia is not a member of the European Union, until at least 2025, or the Eurozone and uses the dinar (RSD) as its currency.
Serbian Entity Set Up
The Republic of Serbia welcomes foreign investment and is intent on building stronger worldwide connections. The relatively young nation is a member of the United Nations and Council of Europe, with plans to join the World Trade Organization and membership of the European Union expected from 2025.
Serbia is also a member of the Central European Free Trade Agreement (CEFTA). Serbia’s Gross Domestic Product (GDP) grew by over 7% in 2021 and was expected to reach 60.67 billion US dollars by the end of that year.
Even so, expanding overseas is a major step, especially for companies considering opening a legal entity in their new territory. It is easy to stumble whilst trying to balance two key objectives – advancing your company at home and expanding into a new territory.
How to set up a Serbian Subsidiary
Setting up a subsidiary in Serbia? First, choose a company type. If you are planning to hire staff and run payroll you must establish a legal entity. The most popular choice is to open a limited liability company, known as a Društvo sa Ograničenom Odgovornošću, abbreviated to DOO.
This company type requires minimum share capital of €1 and it must be registered with the Business Registers Agency (BRA), following the regulations of the Law on Procedure for Registration. The subsidiary operates under Serbian Companies Law in the same way as local entities.
Further requirements and procedures include:
- Obtain company eight-digit registration number (matični broj, MB) from BRA
- Obtain nine-digit company tax number (poreski identififikacioni broj, PIB or TIN) from BRA
- Register with the Serbian Statistical Office to receive official registration
- Register with the Tax Administration (Poreska Uprava)
- Register with the Social Insurance Institute (Zavod za Socijalno Osiguranje, ZSO)
- Register with the ZSO for mandatory health insurance for employees with the Fund for Disability and Pension Insurance
- Provide Articles of Association of the parent company with full names, addresses, country of residence and nationality of the owners, initial contribution by shareholders
- A business bank account and proof that minimum share capital of €1 has been deposited
- Register at least one Serbian citizen as representative to deal with the local authorities
- Appoint a company secretary
What you need to set up a Serbian Subsidiary
- A name unique to Serbia with the suffix DOO, registered with the Business Registers Agency (BRA)
- Notarized Articles of Association of the parent company giving full names, addresses, country of residence and nationality of the owners; initial contribution by shareholders
- Company eight-digit registration number (matični broj, MB) and nine-digit company tax number (poreski identififikacioni broj, PIB or TIN), obtained from BRA
- Registration with the Serbian Statistical Office to receive official registration
- Registration with the Tax Administration (Poreska Uprava)
- Registration with the Social Insurance Institute (Zavod za Socijalno Osiguranje, ZSO) for mandatory health insurance for employees with the Fund for Disability and Pension Insurance
- Articles of Association of the parent company; full names, addresses, country of residence and nationality of the owners; initial contribution by shareholders
- A business bank account and proof minimum share capital of €1 has been deposited
- At least one shareholder
- At least one resident Serbian citizen as representative to deal with the local authorities
- A company secretary
Benefits of setting up a Serbian Subsidiary
Specific advantages for a foreign company opening a limited liability subsidiary in Serbia include that the subsidiary has independent legal identity under Serbia’s Companies Law. The subsidiary is responsible for its own debts and liabilities, but the shareholders are liable only to the limit of their own share contribution. Additionally, the parent company generally has no liability for debts or liabilities.
The subsidiary, as a resident local company, pays Corporate Tax (CIT) on its Serbian and worldwide profits at 15%. The company must also register for Value Added Tax (VAT) as there is no threshold for companies offering goods and services in Serbia.
Through its subsidiary, the parent company has the advantage of exploring the Serbian and Balkan market and further afield among European Union member nations, into the Central European Free Trade Agreement (CEFTA) economic bloc and even further east.
Other benefits for a subsidiary:
- Easier to obtain regulatory approvals, loans and finance and enter contracts with other Serbian and European companies
- More impact with clients and suppliers, as subsidiaries imply more permanency than branches
- Employees feel there is more stability and job security than from being with a branch
In the wider commercial sense, opening a subsidiary makes a statement of a company’s commitment to expanding into foreign markets, in this case the opportunities offered by the European economies.
However, there is a more straightforward option to the risks and costs of setting up a subsidiary in Serbia.
Serbian Market
Foreign companies who wish to expand into the USA will be met with an attractive business hub that includes a highly educated workforce, attractive tax rates and incentives, as well as low labor and administration costs. However, setting up shop in an unfamiliar place comes with its own challenges. Foreign businesses must comply with employment, tax, payroll, and corporate legislation whilst ensuring that their employees are working productively and efficiently.
Work alongside our Professional Employer Organisation (PEO) recruitment specialists, then our Employer of Record (EOR) in-country experts to handle every aspect of compliance. Employers can depend on our in-depth knowledge of the US, its work culture and business practices. Here we have written out some basic summaries of what you need to make the transition into America’s market, no matter the industry you are in.
Starting a Business in Serbia
International companies wanting to hire staff and run their payroll must set up a legal entity subsidiary. The typical choice is to establish a limited liability company known as a Društvo sa Ograničenom Odgovornošću, abbreviated to DOO. This type of entity requires minimum share capital of €1 and it must be registered with the Business Registers Agency(BRA), following the regulations of the Law on Procedure for Registration. The subsidiary operates under Serbian Companies Law in the same way as local entities.
Requirements and procedures include:
- Obtain company eight-digit registration number (matični broj, MB) and the nine-digit company tax number (poreski identififikacioni broj, PIB or TIN) from the BRA
- Register with the Serbian Statistical Office to receive official registration
- Register with the Tax Administration (Poreska Uprava)
- Register with the Social Insurance Institute (Zavod za Socijalno Osiguranje, ZSO) for mandatory health insurance for employees with the Fund for Disability and Pension Insurance
- Provide Articles of Association of the parent company with full names, addresses, country of residence and nationality of the owners, initial contribution by shareholders
- Open a business bank account and provide proof that minimum share capital of €1 has been deposited
- Register at least one Serbian citizen as representative to deal with the local authorities
- Appoint a company secretary
Expanding Business into Serbia
Opening a business in any overseas territory brings issues. Moving staff across the world means lengthy processes to obtain visas and work permits. When employees are in place, who will handle payroll? How will your company deal with regulations on taxation, entitlements and benefits, termination, and severance?
Drawing up an international expansion blueprint is not enough. Your business plan will have to answer all these questions.
Serbia is increasingly welcoming foreign investment. However, the employment market is complicated by its mix of regulations and collective agreements affecting employee benefits and entitlements. There are other questions too: where will you find distributors, manufacturers, and offices?
There is a simple alternative. By partnering a Professional Employer Organization (PEO) and Employer of Record (EOR) such as Bradford Jacobs, companies can plot a time-efficient and cost-effective path to locating and employing staff in Serbia.
Serbian Business Facts
- Capital – Belgrade
- Population – 8.68 million
- Regions – Belgrade, Vojvodina, Sumadija and Western Serbia, Southern and Eastern Serbia, Kosovo and Metohija
- Official language – Serbian
- Economy – GDP US$60.7 billion
- Leading sectors by GDP – Service 51.5%, industry 25%, and agriculture 6.5% end of 2020. Largest industries include agriculture, mining, food processing, cars, base metals, pharmaceutical industry, refined petroleum
- Main exports include – Insulated cables, optical cables; rubber (tires); maize; electric motors; fruit and nuts; motor cars
- Main imports include – packaged medicines; crude petroleum oil, and gases; broadcasting, TV, and sound equipment; cars and vehicle parts
- Main trading partners – Germany, Italy, Balkan countries, Russia, China, Hungary
- Government – Unitary, parliamentary, constitutional republic
- Currency – Serbian dinar (RSD)
Advantages and Challenges of the Serbia Market
Advantages of expanding into the Serbian market include:
- Trade: Interim free trade agreements with the European Union, the European Free Trade Association plus with other nations giving tariff-free export of Serbian goods to 800 million consumers
- Politics: Stable government committed to European integration
- Taxation: Below European average for personal and corporate income tax rates
- Workforce: Well qualified with competitive wage rates
- Doing Business: The World Bank ranked Serbia 44th out of 190 nations for ‘ease of doing business’ in its most recent report
- Investment: Foreign Direct Investment attracts nations such as US, Italy, Germany, and Scandinavia, with manufacturing investment from blue chip companies including Fiat, Michelin, Panasonic, PepsiCo, and Carlsberg
- Banking: International presence from such as Crédit Agricole.
- Infrastructure: Functional road and rail system with access to eight surrounding countries
Challenges of expanding into the Serbian market include:
- Starting Up: The World Bank ranked Serbia 73rd out of 190 nations for ‘ease of starting a business’ in its most recent report, 94th for obtaining an electricity supply and 65th for enforcing contracts
- Taxation: Twelve payments required annually for personal and corporate taxes, which can total nearly 300 hours of office work
- Red Tape: Bureaucracy lacks transparency and is subject to delays and state interference, according to the International Trade Administration of the US
Culture: Serbs are welcoming, friendly, and generally respond warmly to western European business interests, although the mix of cultures and languages in the region can take some adjustment
Limited / Company Subsidiary or Branch in Serbia
The usual choice for international companies establishing an entity in Serbia is the limited liability company, known as a Društvo sa Ograničenom Odgovornošću, abbreviated to DOO. The subsidiary is a legal entity, entirely independent of the parent company and is incorporated under the regulations of the Serbian Companies Act and is registered with the Business Registers Agency (BRA). Another option is to open a branch, known in Serbia as a podružnica.
Subsidiaries have independent legal status from the parent company, which is generally free from responsibility for any debts or liabilities. Subsidiaries can have a different name from the parent company, pursue different business activities and form their own contracts.
Branches in comparison, are an extension of the parent company and are not a separate legal entity. Subsidiaries and branches have differences in how they are registered and operate.
Serbian Contracts
Foreign companies hiring employees in Serbia must operate within a framework of legislation, collective bargaining and workplace agreements that provide safeguards and entitlements for the workforce. The main pieces of legislation in Serbia are the Labor Law and Employment Act, which covers Serbian residents and non-residents and Serbian companies and foreign-owned legal entities.
The Labor Law also stipulates where contracts and collective and workplace agreements must comply with the law. Employment contracts in Serbia come under the Employment Rights Act. Any employee benefits or entitlements that are not dealt with by the specific contract or collective agreements are automatically covered by the requirements in the Labor Law or the Employment Rights Act.
Employment Contracts in Serbia
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.
The main types of employment contracts are:
- Open-ended, Permanent, Indefinite Employment Contracts: The typical contract form that can be terminated mutually, or by either party with or without notice by following the correct procedures prescribed by the Labor Law and the Employment Rights Act.
- Fixed-term Employment Contracts: The fixed-term agreement specifies an end date or a specific project or set of circumstances. Generally, they cannot exceed 24 months, although in certain circumstances can be extended to 36 months, for example if it is tied to the duration of a foreign employee’s work permit. If a contract does not specify fixed-term it is automatically indefinite; if an employee is asked to work more than five days after completing the fixed-term agreement, the contract becomes indefinite. If an employer fails to sign a fixed-term contract it is deemed to be indefinite.
- Other Employment Contracts: The Labor Law allows for contracts for temporary or occasional work and for service contracts. Temporary contracts cannot exceed 120 days in a calendar year and are aimed primarily at the unemployed, part-time workers or individuals drawing a pension. Service contracts are to provide services not covered by the employer’s usual activities.
What are the Employee Benefits in Serbia?
Happy and satisfied employees make your business thrive and lead to even better profits. However, the specific benefits for employees in Serbia might not all be familiar to you yet. By using our PEO and EOR service we can provide compliant labour contracts for employees in Serbia including local benefits.
When expanding your company’s presence in a new country, you need to ensure compliance both in your employment contracts and benefit guarantees. These involve social security contributions, sick leave, health insurance, and unemployment, to name a few.
Employee Benefits in Serbia
Benefits and guaranteed minimum entitlements for employees in Serbia are based on the Labor Law and Employment Act, together with specific legislation regarding such as the Act on Pension and Disability Insurance, the Health Insurance Act, the Employment Insurance Act, the Law on Personal Data Protection, the Law on Protection against Discrimination, and the Law on Mandatory Social Contributions.
Foreign companies hiring employees in Serbia must operate within this fluid arrangement of legislation that provides safeguards and guarantees for the workforce. Minimum guarantees include:
- Minimum wages
- Paid vacations
- Working hours
- Termination, severance, and notice periods
- Sick leave
- Maternity allowances and benefits
The responsibilities of foreign companies reach further than simply complying with tax, social security, and payroll regulations. Failure to comply with specific regulations applying to benefits and entitlements runs the risk of fines and sanctions. It is vital that employers have a firm grasp of what is guaranteed for their employees, as this will affect the employer-employee relationship. It is a complex picture.
What Compensation Laws exist in Serbia?
The bulk of legislation concerning employers’ obligations and employees’ rights is covered by Serbia’s Labor Law and the Employment Act.
The Labor Law and Employment Act: Serbian residents and non-residents and Serbian companies and foreign-owned legal entities come under the legislation. The law governs the obligations of employers and rights of employees. The Labor Law also stipulates where contracts and collective and workplace agreements must comply with the law.
The requirement for employers to respect employees’ rights stretches further than simply complying with tax and payroll procedures. Legislation and binding collective agreements apply to such as maternity allowances and benefits, holidays, sick pay and severance payments, minimum wages and working hours.
Drawing up contracts is tricky enough, but in Serbia it is vital for employers to be up to speed with responsibilities to their staff over benefits, compensation, and minimum requirements. Employees must be given a written contract before the first day of employment. Do not take the risk of paying penalties for ignoring these responsibilities, or being late!
Compensation, entitlements, and benefits include the following, all of which can be improved by collective agreements, but not diminished. They include:
- National Minimum Wage: The 2022 minimum wage for working 160 hours in a month is RSD 43,174 (€367, US$417), as set by the Ministry of Finance and a 9.4% increase over 2021. Serbian employees automatically receive a 0.4% increase in salary for each year they work with the same employer.
- Sick Leave and Benefit: Employees can have up to 30 days paid sick leave from their employer at 65% of the average salary over the previous 12 months if not related to work. Benefit is 100% for injury or illness suffered due to work. The employee must supply a medical certificate within three days of start of incapacity. Legislation allows the employer to claim reimbursement from the relevant fund if employee’s incapacity lasts longer than 30 days.
- Working Hours and Breaks: Regular working weeks comprise 40 hours at eight per day over a five-day week, excluding overtime. Employees cannot be asked to work more than one week of consecutive night shifts unless there is a written agreement to the contrary. Employees have a 30-minute break after six hours during a normal working day, a minimum rest of 12 hours between working days and one rest period of at least 24 hours during the week.
- Overtime: The Labor Law permits overtime to a weekly maximum of eight hours and employees cannot work more than 12 hours a day including overtime. The minimum for overtime pay is 26% above the normal hourly rate, although workplace and collective agreements or contracts can allow for more. Employers must maintain daily records of overtime and hours worked.
- Termination and Severance: Employers unilaterally terminating a contract must provide written reasons for the employee, who has eight days to reply and 60 days from the date of the ‘termination letter’ to initiate court proceedings. Ordinarily, termination can be agreed mutually, at the conclusion of a contract or by other means following the processes of employment law and regulations.
- Notice Periods: Employers must give a minimum of eight days’ notice up to 30 days, although contracts, collective or workplace agreements may allow for more. An employee unilaterally terminating employment must give a minimum 15 days’ notice to a maximum of 30 days. During probation, the employer or employee can terminate by giving five days’ notice.
Social Security in Serbia
Social security, or social insurance, in Serbia is mandated by several pieces of legislation. These include the Act on Pension and Disability Insurance, the Health Insurance Act, the Employment Insurance Act, and the Law on Mandatory Social Contributions. Employers and employees must be registered with the Social Insurance Institute (Zavod za Socijalno Osiguranje, ZSO).
Employers contribute to the social insurance fund through a percentage of their employees’ gross salaries. This comprises 11.0% to pension and disability insurance (reduced from 11.5% from January 2022) and 5.15% to health insurance. Employee contributions are 14.0% to pension and disability insurance, 5.15% to health insurance and 0.75% towards unemployment insurance.
This provides access to universal health care at the primary level in the area where individuals reside and where they will be assigned to a doctor. Persons who not covered either by state or private insurance must meet all medical costs themselves
Statutory Employer Costs in Serbia
- Social Insurance: Employers in Serbia must comply with mandatory contributions to social insurance funds as a percentage of their employees’ gross incomes. Employers contribute 11.0% to pension and disability insurance (reduced from 11.5% from January 2022) and 5.15% to health insurance.
- The National Minimum Wage (NMW): Employers must comply with paying the government-mandated minimum wage, which was set for 2022 at RSD 43,174 (€367, US$417) for working 160 hours in a month. This is a 9.4% increase over 2021. Employers must also comply with increasing employees’ salaries by 0.4% for each completed year of employment.
- Corporation Tax (CIT): Worldwide profits of resident companies are taxed at 15%. Non-resident companies are taxed only on profits from income sourced in Serbia.
Serbian Top Talent
Finding and recruiting top talent in any overseas territory poses many potential pitfalls for foreign companies that are expanding their global reach.
This is certainly the case for the Republic of Serbia which, despite its developing economy and growing attraction for international expansion, is still not a mainstream destination for foreign companies.
Serbia’s potential – and the challenges it brings – underlines why Bradford Jacobs’ global experience is indispensable for taking the smartest recruitment route into the country.
The Recruitment Process in Serbia
- Serbia offers a variety of cultures, languages, heritage, and religions. It is an intriguing but complicated mix, and one which needs expert guidance when it comes to recruitment, either by sourcing staff locally or moving them into the country.
- Serbia’s employment market has a well-educated workforce with generally good English skills that can help circumvent the mix of languages in the region. Local recruitment sites and job portals include Poslovi and Balkan Job Finder, while Facebook and LinkedIn are of course part of the process for researching potential staff.
- The National Employment Service of Serbia is another source for advice on employment, while international agencies also operate there. The more qualified the applicant, the more choice there will be, and language also plays an important part; so, a good working knowledge of Serbian may be a pre-requisite.
- Serbia provides a comprehensive framework of regulations and statutes that safeguard employment rights, both for local staff and recruits from overseas.
- Recruitment is the first stage of making your company operational and competitive in Serbia. It is vital to know where to locate the finest talent to be a perfect fit for your company’s expansion plans. Do not waste time – contact Bradford Jacobs.
- Once recruited, companies must then consider the implications of handling payroll for their staff and dealing with the tax and social insurance authorities. It is a legal requirement in Serbia to establish a legal entity to undertake these responsibilities, then strict registration procedures must be followed to onboard staff. These include:
- Obtaining employees’ Tax Identification Number (TIN) from the Tax Administration (Poreska Uprava) and registering with the Social Insurance Institute (Zavod za Socijalno Osiguranje, ZSO)
- Mandatory registration with the ZSO for health insurance with the Fund for Disability and Pension Insurance via the Central Registry of Compulsory Social Insurance
- Calculating, deducting, and remitting tax and social insurance contributions to the authorities, before the net amount is paid to the employee
- All transactions must be lodged electronically with the Tax Administration
- Prepare employment contracts, which are generally open-ended or fixed-term and can include a probation period. They must be concluded and signed before the employee commences work, with two copies for the employer and one for the employee
Legal Checks on Employees in Serbia
- Scope: Although not common practice, there are no specific restrictions other than those regarding discrimination and protecting personal information. Under the Labor Law, employers can only request information related to the position being applied for.
- Personal Status: Employers are prohibited from inquiring about family or marital status or family planning.
- Discrimination: The Law on Protection against Discrimination protects candidates and employees alike from direct or indirect discrimination regarding the following: Race or ethnic origin; health, pregnancy, or disability; age or any personal characteristics; religious or political beliefs or affiliations; trade union membership.
- Criminal Record: The Criminal Code states citizens cannot be asked to prove either a conviction or non-conviction and that relevant data can be given only to state bodies such as the courts or prosecutors.
- Data Protection: Personal information on such as health or criminal convictions is protected under the Law on Personal Data Protection, which could be contravened if employment is denied on such grounds.
- Required: The employer must check the applicant has the required visas and work permits.
Basic Facts on Hiring in Serbia
- Companies hiring staff for expansion into Serbia must comply with a framework of employment and taxation regulations. Some are subject to mandatory state regulations, while collective and trade union agreements can improve on the statutory basic minimums. Basic requirements on hiring cover the following:
- The Labor Law (2005) stipulates that an agreed contract must be concluded in writing before the employee starts work
- The contract must detail the following: 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 in case of the latter; any benefits
- The Labor Law decrees that any company employing more than 10 persons must have a workplace rulebook
- Any aspects of employment not covered by the contract will be subject to the Labor Law or any collective agreements
- 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, it automatically 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
Work Culture
To succeed in business in Serbia, it is vital for both employers and employees to have a strong understanding of the business culture.
As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about Serbian work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in Serbia to start your expansion well-informed.
Work Culture in Serbia
Building relationships is a key element of life in Serbia, both inside the workplace and outside. Unlike some northern European business cultures, where work and social life are kept strictly apart, Serbs are often happy to mix the two.
The Republic of Serbia is intent on building stronger worldwide connections. The relatively young nation is a member of the United Nations and Council of Europe, with plans to join the World Trade Organization and membership of the European Union expected from 2025. Serbia is also a member of the Central European Free Trade Agreement (CEFTA). Serbia’s Gross Domestic Product (GDP) grew by over 7% in 2021 and was expected to reach 60.67 billion US dollars.
Serbia is in the south-east corner of Europe, landlocked by Hungary, Romania, Bulgaria, North Macedonia, Bosnia and Herzegovina, Croatia, Kosovo, and Montenegro. The region is a mix of cultures, customs, and languages, and each country is rich with its distinctive heritage.
Incomers need to be up to speed to make their mark in this highly intriguing but competitive environment as Serbia proves to be an increasingly powerful magnet for foreign jobseekers with the right skills, qualification, and experience.
Ready for the challenge? Now it is time to get down to business. So here are a few tips on taking the right steps and avoiding the pitfalls:
- Language: English is used increasingly in the business environment. However, if it is necessary to take an interpreter for meetings, ensure they are a Serbian-national or local as Serb-speaking nationals from other countries in the region may not be appreciated by your hosts.
- Punctuality: Be on time for the scheduled meeting; hide frustration if no-one else is
- Attitudes: Serbs often prefer introductions to come through a third-party business connection known to them, before agreeing to a meeting. Take time to build relationships as this will lead to trust.
- Business Environment: Serbian companies are keen for links with international companies.
- Negotiations: Hierarchical business structures and bureaucracy can still get in the way, so deadlines and progress can suffer.
- Meetings: Serbs are generally very hospitable and interested in others, so ‘small talk’ is usually a feature at the beginning of meetings and at the end too. Also, avoid arranging meetings during the holiday months of July and August, or around public and religious holidays. Business discussions will also stretch into coffee breaks and lunches.
- Greetings: Handshakes and eye contact. Serbs are quite expressive so once relationships have been established three kisses on the cheek (men and women) may be acceptable. Shake hands with all attendees, women first. Address by title and family name. “Bolje te našao” (Pleased to meet you) will go down well.
- Business Cards: these are generally exchanged and without too much ceremony.
- Dress Code: Fairly formal to be safe – smart suits, shirt and tie for the men and dresses or trouser suits for female members of the team.
- Gift-giving: Wine or flowers will be acceptable.
Serbia Minimum Wage
The 2022 minimum wage for working 160 hours in a month is RSD 43,174 (€367, US$417), as set by the Ministry of Finance, a 9.4% increase over 2021. Serbian employees automatically receive a 0.4% increase in salary for each year they work with the same employer.
Probation Periods in Serbia
Probation or trial periods can be for a maximum of six months, during which either party can terminate with five days’ notice.
Working Hours in Serbia
The normal working week comprises 40 hours at eight per day in a five-day week, excluding overtime. An employee cannot be asked to work more than one week of consecutive night shifts unless there is a written agreement to the contrary. Employees have a 30-minute break after six hours during a normal working day, a minimum rest of 12 hours between workdays and one rest period of at least 24 hours during the week.
Overtime in Serbia
The Labor Law restricts overtime to a weekly maximum of eight hours and employees cannot exceed 12 hours a day (including overtime). The mandatory minimum for overtime pay is 26% above the normal hourly rate, although workplace agreements and contracts can allow for more. Employers must maintain daily records of overtime and hours worked.
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