Unlock Serbia: Business, Residency, and Citizenship

Serbia, often described as the very definition of old Europe with its breathtaking landscapes and stunning architecture, is not just rich in culture and traditions; it's also actively looking towards the future. For entrepreneurs and investors seeking new opportunities, Serbia presents itself as a compelling option, strategically located at the crossroads of Europe and Asia, between Hungary, Romania, Bosnia, and Croatia. It offers a mix of Slavic, Middle-eastern, and Greco-Roman influences, evident to visitors upon arrival. Beyond its cultural appeal, Serbia is emerging as a low-tax, business-friendly environment with a growing economy.

Serbia is currently a candidate country for European Union membership, a status that is expected to bring further trade partners and expand its economic development. While not yet a full member, its growing international presence includes full membership in UN and WTO organizations.

Why Serbia for Entrepreneurs and Investors?

Serbia's appeal to entrepreneurs and investors stems from several key factors highlighted in the sources:

• Growing Economy: Serbia ranks as one of the leading nations in the world economic index. Its economy is growing, bolstered by healthy relationships and free trade agreements with the EU, EFTA, and a Generalized System of Preference with the U.S..

• Low Cost of Living and Affordability: Serbia offers an affordable and pleasant environment. Belgrade, the capital, is a highly developed city with modern conveniences, while rural areas like Sumadija offer excellent, affordable investment opportunities, particularly in land.

• Favorable Tax Rates: Serbia boasts a competitive flat tax rate of 15% for corporate tax. The main income tax rate for residents is 10%, though some sources mention income tax rates between 10%-15%. Establishing tax residency typically requires residing in the country for at least 183 days per year.

• Business-Friendly Environment: The country actively seeks to expand business and entrepreneurial opportunities.

• Strategic Location: Positioned in the Balkans, it provides access to both Western and Eastern European markets, making it a strategic hub for business operations.

• Privacy: Serbia did not sign the Common Reporting Standard (CRS), which can ensure greater privacy for corporate bank accounts.

• Safety: Serbia is described as a safe and welcoming country with a low crime rate.

Pathways to Serbian Residency for Entrepreneurs and Investors

For entrepreneurs and investors, the sources outline two primary routes to obtaining temporary residence in the Republic of Serbia:

1. Residency through Real Estate Investing:

   • You can obtain temporary residence by buying a property in Serbia.

   • Notably, Serbia does not have a minimum property value or cost required to qualify for residency. Your property must be evaluated and approved by the governing authority to confirm it qualifies.

   • Purchasing land or property can increase your chances of gaining a visa or permanent residency and is considered one of the best ways to fast-track your move to residency.

   • If your country of origin has a mutual agreement with Serbia regarding real estate (like the U.S. and Canada), you can purchase land before entering Serbia.

   • Key steps involve searching for, touring, and purchasing a property, residing there for 30 days for police checks, and then applying for a temporary residence permit as an investor, which needs annual renewal.

   • To establish yourself as a taxable resident, you must reside in the country for at least 183 days in the first year.

2. Residency through the Establishment of a Business (Company Formation):

   • This route offers a streamlined pathway for foreign nationals to establish residency by starting a business.

   • A significant advantage is that there is no minimum investment amount required for company formation. Simply establishing a legal entity (like a Limited Liability Company or DOO) and employing yourself within it is enough to qualify for residency, provided you meet other requirements. You'll need to sign an employment contract with your company to show your source of income is in Serbia.

   • You can form a new business or expand an existing foreign company by having an operational branch in Serbia.

   • You can apply for a unified permit that combines both a temporary residence permit and a work permit.

   • The process involves steps like forming the company (typically takes up to 5 business days for registration), opening a corporate bank account, gathering documents, and submitting the residency application.

   • You apply for a temporary residence permit as an entrepreneur, which can be renewed. The validity period for temporary residence permits has been increased from one year to up to three years. You can renew your temporary residence permit as long as your business remains active.

   • Required documents include founding agreements, proof of identity, registered address, bank certificates, tax identification numbers, application forms, and more.

Temporary, Permanent Residency, and Citizenship

Regardless of whether you choose the real estate or business route, you initially obtain a temporary residence permit. This permit requires you to stay in Serbia for at least half of the approved residency period plus one day to facilitate renewal, ideally around 183 days per year. The temporary residence application typically takes up to 30 days to process after submission.

Permanent residency is generally possible to obtain after five years of temporary residence in Serbia. To qualify, a foreigner should stay in Serbia continuously for at least two and a half years over these five years. You will need documents like a filled application form, proof of paid fees, passport copies, photographs, medical certificate, education documents, birth certificate, and proof of means of support. The sources also mention that after three years of temporary residence, you can apply for permanent residency.

The path to Serbian citizenship through naturalization typically takes a total of 8 years – requiring at least 3 years of permanent residence after obtaining 5 years of temporary residence. The sources mention slightly different timelines for citizenship based on the initial residency route:

• As a real estate owner: 5 years of permanent residence.

• As a business owner: 10 years of residence. However, time spent during business permanent residence counts as half, meaning two years on a business visa qualifies towards the five years required under the real estate permanent residency application for citizenship.

• You can potentially speed up the process by starting as a business owner and later changing to a property owner.

• Another source mentions that once you have spent a total of six years in Serbia (3 with a temporary residence permit and another 3 with a permanent residence permit) you are eligible for Serbian citizenship.

It's important to note that Serbia will generally require you to forfeit your previous nationality when naturalizing. Dual citizenship is only allowed in certain circumstances, largely based on ancestry and the country where you hold citizenship.

Faster pathways to citizenship exist if you meet other criteria, such as marriage to a Serbian national for at least three years (which secures a temporary residence permit), citizenship by descent, or having a child with a Serbian citizen.

Important Considerations

While the process for residency through investment or company formation is straightforward, the path to citizenship through naturalization can take up to a decade due to the multi-year residency requirements and paperwork.

The application process for a temporary residence permit requires necessary documents such as proof of health insurance, a medical certificate, a stamped passport, a temporary visa, a birth certificate, proof of profit, or proof of real estate purchase. The Ministry of Internal Affairs requests documents like a passport copy, photographs, bank statements from a Serbian bank, health insurance policy, White Card, proof of property ownership, and a CV. Applicants who demonstrate strong financial profits and investments are more likely to be approved.

Conclusion

Serbia offers compelling opportunities for entrepreneurs and investors, with its growing economy, strategic location, low cost of living, and favorable tax rates. The pathways to residency through real estate investment (with no minimum investment) or company formation (also with no minimum investment) provide accessible entry points. These temporary residences can lead to permanent residency and, eventually, Serbian citizenship, allowing you to make Serbia your long-term base.

Considering the complexities of relocation, legal requirements, and optimizing tax burdens, many individuals seek expert assistance to navigate the process. We at The Offshore Specialist, can help assess your options, facilitate applications, and ensure compliance. As the world changes, exploring options for second residency or citizenship is a strategy more people are adopting. Serbia stands out as a place where you could potentially establish a business or residence.