How to Open a Foundation and Endowment in Serbia

While an average human life may last around 79 years, the impact of generosity can echo for generations.

Throughout history, many philanthropists have dedicated their lives to creating a better, fairer society. Their ideas and impact continue to inspire us, proof that good deeds, unlike time, do not fade.

In Serbia, one of the most structured and enduring ways to give back to the community is through establishing a foundation or an endowment. Both are non-profit legal entities with a shared purpose: to serve the public good. But while their goals overlap, their legal frameworks differ in important ways. Both are non-profit legal entities with a shared purpose: to serve the public good. But while their goals overlap, their legal frameworks differ in important ways. Understanding these differences is essential for anyone planning the establishment of a foundation in Serbia.

The Difference Between a Foundation in Serbia and an Endowment

Under the Law on Endowments and Foundations, Serbia recognizes two distinct legal forms for organized philanthropic activity: endowments and foundations. Both are legal entities without shareholders, established for socially beneficial purposes, but the way they are created and their operational structures differ significantly.

Anyone considering the creation of a foundation in Serbia must understand that transparency, public interest, and lawful purpose form the basis of the entire framework.

Both endowments and foundations operate under the same overarching legal framework and share the same underlying purpose: to act in the public interest. They are prohibited from engaging in activities contrary to the Constitution or the legal order, including promoting violence, discrimination, or political party interests.

Their operations must be transparent, their funds must be used exclusively for achieving the declared goals, and their governance must be organized in accordance with the principles of accountability and public benefit.

Although both structures can perform similar activities, the main distinction lies in their starting point. The endowment is born from a concrete act of giving; it begins with property and builds its mission around that gift. The foundation, on the other hand, begins with an idea, a vision of social benefit, and relies on building support and resources over time to bring that vision to life.

Endowment in Serbia

An endowment represents one of the oldest and most dignified forms of giving, when a founder sets aside part of their property to serve a lasting purpose. It is philanthropy made tangible: a donation that doesn’t end with a single act of kindness but continues to generate value and change long after it was made.

The assets used to establish an endowment can take many forms — money, real estate, intellectual property, or other valuables, but what truly defines it is permanence. Once dedicated, the property is legally protected and must always serve the purpose for which it was given. This ensures that the founder’s vision continues to live on, independently of time, people, or changing circumstances.

Under Serbian law, an endowment must be founded with an initial contribution of property worth at least the equivalent of approximately 30,000 euros. This legal threshold guarantees that the organization has a solid foundation to operate sustainably and to fulfill its intended mission.

Endowments can be created to advance public purposes, such as education, science, culture, health, or environmental protection, but also private purposes, as long as they are lawful and ethically sound. The founder may establish an endowment through a founding act, a contract, or even through a will, allowing the gesture of generosity to become their lasting legacy.

Once established, the assets of the endowment are shielded from private use. Neither the founder nor the board members may benefit personally from them. This strict legal protection gives endowments a special kind of moral and institutional stability: they exist not to enrich anyone, but to safeguard an idea.

Imagine a family that decides to transform their ancestral home and part of their savings into an endowment dedicated to supporting talented young musicians from their hometown. The property is rented out, and the income it generates each year funds scholarships, instrument purchases, and music workshops. Over time, the endowment becomes a local tradition, a living monument to the family’s values, inspiring others to give back to their community in the same way.

Foundation in Serbia

Unlike an endowment, a foundation does not begin with a donation of property — it begins with an idea. At its core lies the founder’s determination to promote a socially beneficial cause, rather than the possession of material assets. The law allows a foundation to come to life solely through a clearly defined, lawful, and purposeful intention to contribute to the public good.

Foundations in Serbia must always serve a public interest, never a private one. They may be established to promote education, culture, science, healthcare, human rights, social welfare, or environmental protection, essentially any goal that uplifts communities or improves lives. What distinguishes a foundation is not how much it owns, but what it stands for.

This model provides exceptional flexibility. A foundation can be launched immediately, even without significant financial resources. Many start small, as initiatives fueled by personal commitment, volunteer effort, and community support. Over time, they can grow, attract donors, secure grants, or partner with institutions that share their values. The absence of required initial capital makes the foundation a perfect vehicle for visionaries who have ideas and energy, but not yet the resources to turn them into lasting institutions.

The law also allows a foundation to develop organically. Its governance structure, including a managing board, ensures that its activities remain aligned with the founder’s mission and the public interest. This makes it a sustainable and transparent framework for organized philanthropy, capable of evolving as its influence and capacity expand.

Consider a young entrepreneur passionate about digital education who establishes a foundation to promote coding and technology skills among children in underdeveloped areas. With no starting capital, the foundation begins by organizing free workshops in schools, mobilizing volunteers, and collaborating with local companies that donate computers. As word spreads, it secures its first grants and partnerships, grows its programs, and eventually establishes a small innovation hub.

How To Open a Foundation or an Endowment in Serbia?

In Serbia, both foundations and endowments are established through a founding act, which serves as the organization’s constitutional document. This act defines the essential elements of the organization: the founder’s identity, the purpose of the entity, governance structure, rules for management and representation, and — in the case of endowments — the handling of assets. Essentially, the founding act sets the organization’s character and ensures that its activities align with its mission from the very beginning.

For foundations, the founding act is the sole legal method of establishment. It must be in writing and notarized. Since foundations do not require initial assets, the act focuses primarily on the organization’s public-benefit purpose, internal governance, and operational framework, including potential sources of funding. It sets clear rules to guide the foundation in fulfilling its mission while ensuring independence, transparency, and compliance with Serbian law.

Endowments, while also created through a founding act, allow additional flexibility. They can be established not only via a founding act, but also by contract if multiple founders are involved, or by testament (mortis causa), where assets are dedicated to the endowment to take effect after the founder’s death. A key requirement for endowments is the transfer of assets, typically with a minimum value of around €30,000, unless the competent authority approves a lower amount. This ensures that the endowment has a solid material foundation to sustainably achieve its purpose. The founding act for an endowment, therefore, addresses both the mission of the organization and the management and protection of its assets.

Once the founding act is completed, both foundations and endowments must be registered with the Serbian Business Registers Agency (SBRA) to become legal entities. The registration process involves submitting the founding act, internal statutes, proof of identity for founders or representatives, and, in the case of endowments, proof of the transferred assets. For endowments established via testament, relevant probate documents are also required. Once registered, the organization gains the ability to operate officially: it can enter into contracts, manage assets independently, hire staff, receive donations, and act in accordance with its stated purpose.

While the founding act is central to both forms, it reflects their fundamental differences. For foundations, the act is purpose-driven, focusing on the public-benefit mission and governance structure. For endowments, it is property-driven, formalizing the transfer and protection of assets to fund the organization’s activities over time.

Who Manages a Foundation in Serbia or an Endowment?

Management of foundations and endowments is carefully structured by law to ensure accountability, transparency, and effective operations. The two central components are the Board of Directors and the Manager.

The Board of Directors, which must include at least three members, is responsible for strategic decision-making, approving budgets, and ensuring that the organization remains true to its stated mission. It sets the direction and priorities of the organization and provides oversight of its activities.

The Manager oversees day-to-day operations, implements programs, and reports to the board. Acting much like a CEO, the manager ensures that daily activities are aligned with the organization’s purpose and efficiently executed.

Good governance and transparency are not just formal requirements; they are essential for building trust with donors, beneficiaries, and the public. Donors want confidence that their contributions are used responsibly and effectively, and transparent reporting helps attract ongoing support.

Can Foundations and Endowments Engage in Business Activities?

Interestingly, while both foundations and endowments are fundamentally non-profit organizations, Serbian law allows them to carry out certain business activities under specific conditions. These activities are not aimed at generating private profit, but rather at supporting the organization’s core mission and objectives. To legally engage in business, the activity must be:

1. Directly related to the organization’s purpose – the business activity should complement or support the mission of the foundation or endowment.
2. Secondary in nature – the business activity cannot become the primary function of the organization.
3. Defined in the statute – the organization’s governing document (statute) must explicitly allow for this activity.
4. Registered with the SBRA – any business activity must be formally entered into the official register.

Income generated from these activities must be reinvested into the organization’s programs and goals. This ensures that the business operations strengthen the organization’s mission rather than providing financial benefit to founders, board members, or managers.

This framework gives foundations and endowments flexibility to sustain and expand their impact while remaining firmly non-profit in purpose, providing a practical way to combine mission-driven work with operational sustainability.

Additionally, both endowments established for public-benefit purposes and foundations enjoy a significant tax advantage: funds obtained from voluntary contributions, donations, gifts, grants, legacies, or similar sources are not subject to taxes established by law. This financial relief enables these organizations to maximize their resources and focus entirely on their social mission, reinforcing sustainability and long-term impact.

Foreign Foundations in Serbia

Foreign endowments and foundations, as well as other non-profit, non-membership legal entities established abroad, can also operate in Serbia. However, before beginning any activities, they must be registered with the Register of Representative Offices of Foreign Endowments and Foundations, which is maintained by the SBRA.

Under Serbian law, a foreign endowment or foundation is understood as a non-profit legal entity without members, established in another country in accordance with that country’s laws, with the purpose of pursuing a lawful and socially beneficial goal — one that is not contrary to the Constitution or laws of the Republic of Serbia.

Importantly, this definition also extends beyond organizations formally called “endowments” or “foundations.” The Register includes any non-profit legal entity without members, such as non-profit corporations or private institutions, provided their governance structure shows that they do not operate through a general assembly of members. In other words, what matters is not the organization’s name, but its legal nature, whether it is a non-profit entity pursuing the public good rather than private gain.

Once registered, foreign endowments and foundations may conduct charitable, cultural, educational, or humanitarian programs in Serbia, either independently or in cooperation with local partners. This framework allows international philanthropic organizations to contribute to Serbian society while operating transparently and in full compliance with local law.

A cultural foundation based in Germany that promotes youth exchange programs can open a representative office in Belgrade, register it under the Serbian Register of Foreign Endowments and Foundations, and partner with local schools and NGOs to organize workshops and exchange projects, all under Serbian legal supervision and protection.

In Summary: What’s the Difference?