Serbia has a Double Tax Avoidance Agreement with 59 countries all around the world and this fact initially makes Serbia favorable for starting or relocation of a business.
Besides that, the last amendments of the Personal Income Tax Law and the Law on Mandatory Social Security Contributions (hereinafter: PITL) include some new tax benefits.
Whether you are interested in employing foreigners in Serbia, or you, as a foreigner, are planning to enter into an employment agreement with a Serbian employer, there are some favorable provisions regarding taxes and social insurance contributions.
PITL prescribes that employers who employ youth repatriates (Serbian citizens who have lived abroad for at least 12 months prior to entering into an employment relationship, in order to complete practical training or further education) can pay tax and contributions with a 70% reduction. The further conditions for using the tax and contributions base reduction are prescribed by Laws, and you can find the practical explanation in our blog.
Additionally, newly settled taxpayers employed by an employer who is performing the innovative activity and fulfills other conditions prescribed by the Law can use the tax and contribution incentive as well.
The question of engaging foreign employees is always directly connected with the residence of foreigners in Serbia. In 2020, Serbian authorities have adopted some favorable bylaws regulating that matter in order to enable foreigners to stay in Serbia as well as to make Serbia a more appealing business environment.
In accordance with provisions of the Regulation on the criteria for determining the categories of foreigners and the categories of foreigners to whom the temporary residence permit in Serbia may be granted regardless of the grounds for granting temporary residence (hereinafter: Regulation), the temporary residence permit may be granted to the categories of foreigners who:
- have established a company in Serbia whose innovative activity is confirmed by the registered Science technology park (whose founder is the Republic of Serbia, an autonomous province, Belgrade or another local government unit) – so-called “start-up”,
- invest in an already registered company in Serbia, i.e. in the activity of that company by investing in basic tangible and intangible assets – so-called “investor”,
- have a decision on professional recognition of a higher education issued by the competent authority of the Republic of Serbia – so-called “talent”.