Known as the crossroads of Europe, Serbia is a country strategically located at the geographical intersection of Southeast and Central Europe. Its vibrant economy offers a diverse range of opportunities for both local and international entrepreneurs. As a consequence, the number of business entities in Serbia is extensive and diverse. This article looks into the types of companies in Serbia, shedding light on their characteristics and scope.
1. Sole Proprietorship (Preduzetnik)
Single-person entrepreneurship is the simplest and most common form of business in Serbia. The owner bears all the risks and expenses of the business venture in this setup, but also reaps all the profits. This form of business is ideal for independent investors and small-scale businesses.
2. General Partnership (Ortačko društvo)
A general partnership is a company where two or more members, known as partners, conduct business jointly. Unlike limited partnerships, in a general partnership, each member is equally liable for the company’s debts.
3. Limited Partnership (Komanditno društvo)
In a limited partnership, there are two types of partners: general partners and limited partners. General partners have unlimited liability, meaning if the business incurs debts, they can be personally liable. On the other hand, limited partners invest in the business but do not have a say in the day-to-day affairs. They also have limited liability – only up to the amount they invested.
4. Limited Liability Company (Društvo s ograničenom odgovornošću – DOO)
The most popular type of company in Serbia for foreign investors is the limited liability company (LLC), due to its simple establishment procedure and the limited liability of the owners. In this type of company, the owners’ (members’) liability is limited to the amount of their investment in the company capital.
5. Joint Stock Company (Akcionarsko društvo – AD)
A joint-stock company is a type of corporation or joint venture that has its capital divided into shares. It is a popular choice for larger companies and those interested in raising capital through a public offering. The shareholders bear the financial risk only to the extent of their share in the capital.
6. Representative Office (Predstavništvo)
Foreign companies aiming to conduct business in Serbia can open a representative office. These offices do not have the status of a legal entity and therefore can’t engage in commercial activities themselves directly. They serve as an extension of the foreign parent company, conducting tasks such as market research, advertising, and promotion of the mother company.
7. Branch Office (Ogranak)
Branch offices are less popular than representative ones but may conduct commercial activities under the name of the parent company, unlike representative offices. Like the representative office, they do not have a separate legal personality.
The jurisdiction of Serbia acknowledges the advantages and challenges that come with different types of companies. Thus, it provides a legal environment conducive to the existence of various types of businesses. Despite the economic woes of the past, Serbia has demonstrated impressive resilience and adaptability, making it a notable contender for robust business engagement. The continued growth and diversification of the company types in Serbia attest to the country’s economic potential and its promising future.
Suggested related links:
NALED (National Alliance for Local Economic Development)
Chamber of Commerce and Industry of Serbia