Nov 9, 2018

Why to incorporate an Association in Serbia?

Serbian association represents a unique business vehicle where founders are not treated as UBOs(Ultimate Beneficial Owners). This structure represents a superior form of a traditional Lichtenstein Foundation. At the age of transparency, Serbian Association offers the highest level of privacy.

What makes the Association, incorporated in Serbia an ideal business vehicle?

  1. The most important characteristic of the Association is the unique way of founding and the legal treatment of the UBO, defined by the current Serbian law, which stipulates that Association can be established by the group of people/citizens who are not treated as the UBO’s of the Association by local authorities and the banks, contrary to the classical LTD, LLC or a joint stock company. For the banks, the UBO is the person that manages the Association. Both domestic and foreign citizens and residents can manage a Serbian Association. The founders are not shareholders or the owners of any parts or shares of the Association and this fact legally disconnects them from the ownership or the status of UBO. This is a unique proposition comparing to other jurisdictions and entities where, according to the international laws and regulations, both founders and directors are treated as UBO’s.
  2. The founders of the Serbian Association can change at any time, be added or removed from the list of founders, replaced, if needed and that can be done in very simple and fast way, just like in any international business company. This allows unlimited changes in the structure of Association, giving the unprecedented flexibility for management and business operations.
  3. The Serbian Association is fully supported by the local banks, according to the positive local and international laws imposed on the banking sector and it allows utilization of full-scale banking services. The banks are treating the managing director of Association as the UBO, without any requests for the information and the KYC of the founders. The status of the Association is equal to the status of any classical local company.
  4. The founders of any Serbian Association are fully protected from any legal risk in regard with the Association, and the commercial risk is limited to the activity of the elected managing executive director, which is equal the procedures and risks in any company. The founder/s can closely monitor the activity and the operations run by the managing director and can replace the director at any point of time, just like in any other commercial company.
  5. The Association can perform all business activities not prohibited by the Serbian Law and not licensed by the local authorities, just like any company.
  6. The incorporation timeframe is shorter and less expensive and the procedure to open the bank account is much easier, faster and practically 100% guaranteed. In other jurisdictions these kinds of entities normally function under heavy limitations imposed by banks and must release the full information regarding all founders. All founders are normally treated as UBOs and their information is normally exchanged according to the positive international and multilateral agreement between the related countries.
  7. The Serbian Association gives you the full freedom of operations and eliminates the possible and expectable risks imposed by the banks while performing bank transactions and operations according to the international regulations and compliance procedures. The flow of business and operations is not interrupted which results in the great efficiency of the Association in compare with any other similar entity in the world.
  8. The Serbian Association can own other companies and legal entities which makes it the perfect low-cost replacement for the Swiss Holdings and some other leading jurisdictions with full tax advantages as well. The Association can own the Foundation which gives another protection layer for the founders of Association.
  9. The Association according to the Serbian law is fully regulated entity with the undisputable legal status just like any onshore company but with advantages regarding the UBO status and the possible exchange of information as well as the commercial, political and legal risks.
  10. The Association and the local laws regulating its activity are very easy to comprehend and study independently for any potential founder, domestic or foreign due to its simplicity and lack of complicated and sophisticated terminology. That gives the founder/s much more independence in his actions and operational issues during the lifetime of the Association.
  11. The Association can be terminated with no complications and high costs in difference of all other similar entities in the world.
  12. Status of the Serbian Association

An Association receives the status of a legal entity on the day of its registration in the business registry.

The Association is created and organized freely, as a voluntary and non-profit organization. It can be established by domestic and/or foreign individuals as well as legal entities. It can be created for carrying out certain interests and common goals that are not prohibited by the Constitution or the law.

The Association can join unions and other associations in the country and abroad. Part of the association (department, group, club, branch, etc.) is not a legal entity and can be created in any country.

  1. Founders of the Serbian Association

A minimum of 3 individuals are needed to create the Association, one of whom must have residence in the territory of the Republic of Serbia. The founders of the association can be domestic or foreign individuals or a legal entity.

The Association is established by adopting a founding act and the statute and selecting a person authorized to represent the association at the assembly.

  1. Documents of the Serbian Association

Founding act

  1. Controls over Serbian Association

The assembly is the supreme body of the association, the assembly consists of all members of the association.

The representative of the association can be one or several individuals authorized to represent the association, this person must be a resident in the territory of the Republic of Serbia.

  1. Assets and taxation of Serbian Association

The association can acquire assets through membership fees, voluntary contributions, donations and gifts (in cash or in natural form), financial subsidies, inheritance, interest on deposits, rents, dividends and other legally permitted funds. In case of a donation, the association pays 2.5% tax on the gift.

Individuals and legal entities that provide contributions and gifts to the association may be exempt from tax liabilities in accordance with the law.

Also, the association can conduct commercial activities and, in this case, pay a profit tax of 15%.

  1. Activities and reporting

The Association can perform all activities that achieve the goals set forth in the statute.

The Association can directly carry out commercial or other activities from which it makes profit, on the following terms:

  1. activities are related to the goals set forth in the statute;
  2. the activities that are stipulated by the statute;
  3. the activity has a smaller amount, that is, the activity is carried out to the extent that is necessary to the achieving of the objectives of the association.

The Association has no right to distribute the received profit from commercial or other activity to its founders, members, members of the association’s bodies, directors, employees or persons associated with them.

The Association maintains its accounting records as a local company.

According to its obligations, the association answers with all its assets.

Association property can only be used to fulfil the goals set by the statute.

Assets of the association cannot be transferred to the founders, members, directors, employees or persons associated with them.

  1. Registration of Serbian Association. Process and Requirements.

Registration in the business registry is carried out based on the application for registration. To create an association, the following is needed:

  1. Founding act of association
  2. Statute (original)
  3. Record from assembly meeting
  4. Act of the selection of the representative of the association
  5. The internal passport of a citizen of Serbia or the passport of a foreign citizen and a certificate of temporary residence

The fee for Serbian Association set up and bank account opening is EUR 8,999.

If you wish to learn more about Serbian Association, please contact us at [email protected] or through Viber, Telegram and WhatsApp +381691112327