Hiring a Construction Company in Belgrade: General Contractor, Licences and Construction Contract

For a new kitchen or bathroom in Belgrade, a good tradesperson is enough. If you want to build a house, gut and refurbish a building or add a storey, you need a construction company, a permit, a construction supervisor and a contract that covers more than price and deadline. Projects like these quickly run into six-figure sums, and mistakes in choosing the company or drafting the contract are hard to fix later.

This article is for property owners and investors from abroad who are planning a larger construction project in Belgrade. It explains when a general contractor makes sense, how to check the company and its licences, which permit steps Serbian construction law sets out and what belongs in a construction contract. For work inside an apartment, such as a renovation or modernisation, you are better served by our guide Tradespeople in Belgrade: How to Find Reliable Professionals and the article Contractors in Belgrade: How to Request and Compare Quotes Properly.

General contractor or separate trades?

On a larger project you face a fundamental decision: one company takes on the entire project, or you award the trades individually.

For owners who are not permanently in Belgrade, a general contractor (generalni izvođač) is almost always the better choice. Separate contracts pay off mainly if you have an independent site manager on the ground who coordinates the trades and keeps to the schedule. A hybrid is also common: the general contractor handles the shell and building services, and you award the interior fit-out separately.

Checking the company: register, licences, finances

Business register entry

Every construction company in Serbia must be registered with the Serbian Business Registers Agency (Agencija za privredne registre, APR). The public register shows the date of incorporation, legal form, registered office, management and the registered main activity. A company that is only a few months old and already wants to build an apartment building deserves a closer look. The register also publishes the annual financial statements, from which you can read turnover and headcount.

Blocked bank accounts

The National Bank of Serbia publishes information on companies whose accounts are blocked because of enforced collection. A construction company with a blocked account cannot pay for materials or subcontractors. This check belongs before every contract signature and before every larger interim payment.

Licences of the responsible persons

Serbian construction law requires the works to be managed by a responsible site manager (odgovorni izvođač radova) who holds a licence from the Serbian Chamber of Engineers (Inženjerska komora Srbije). The same applies to the responsible designer and to the construction supervisor. The licences can be looked up in a public register kept by the Chamber. Ask for names and licence numbers and check that the licence matches the type of structure. For certain large or special structures, the law additionally requires a licence for the company itself. Whether your project falls into this category should be confirmed locally.

References and insurance

Ask for completed projects of a comparable size and visit at least one of them. Ask about liability insurance covering damage to third parties during construction, and have them show you the policy.

Permits: from the plot to the occupancy permit

The legal basis is the Law on Planning and Construction (Zakon o planiranju i izgradnji). For some years the procedure has been handled electronically through the so-called unified procedure (objedinjena procedura). For a new building, the process looks roughly like this:

1. Location conditions (lokacijski uslovi): The authority determines what may be built on the plot and which utility connections are possible.
2. Design for the building permit: A licensed designer prepares the documents.
3. Building permit (građevinska dozvola): Issued on the basis of the location conditions and the design.
4. Design for construction: The detailed planning for the site.
5. Notification of commencement of works (prijava radova): Under Art. 148 of the Law, the start of construction must be notified before the works begin.
6. Construction under professional supervision: Throughout the entire construction period.
7. Technical inspection (tehnički pregled): A commission inspects the finished structure.
8. Occupancy permit (upotrebna dozvola): It confirms that the building complies with the building permit and the documentation. Only then may it be used and entered in the land registry (cadastre).

For work on existing buildings, such as refurbishment or conversion without structural intervention, Art. 145 of the Law provides for a simplified procedure with a decision approving the works. Adding a storey (nadziđivanje), by contrast, is usually treated as new construction requiring a permit, and in apartment buildings it also needs the consent of the owners' association. Your designer will clarify which procedure applies to your project before the first application.

Construction supervision: the owner's obligation

Under Art. 153 of the Law, professional construction supervision (stručni nadzor) is an obligation of the owner commissioning the works (the investor, in Serbian law). It is carried out by a licensed person, the so-called supervising engineer (nadzorni organ). The supervision checks that construction follows the design and the regulations, inspects the quality of materials and workmanship and approves the construction company's invoices.

Important for owners based abroad: the supervision should not be provided by the construction company but commissioned by you. Only then does it work in your interest. Agree with the supervisor on regular reports with photos so that you can follow progress from a distance.

The construction contract: what it should contain

The construction contract (ugovor o građenju) is governed by the Serbian Law on Obligations (Zakon o obligacionim odnosima, ZOO) and, under Art. 630, must be concluded in writing. In practice, the Special Construction Usages (Posebne uzanse o građenju) are often agreed or applied in addition. A good contract covers at least:

• Scope of work: Reference to the design for construction and a detailed bill of quantities with quantities and materials
• Pricing method: Fixed price or unit prices billed on measured quantities
• Payment schedule: Advance payment, interim payments and final payment
• Deadlines: Start of works, milestones and completion, each with consequences for delay
• Security: Bank guarantees for the advance payment and for performance
• Variations: Procedure for changes and additional work
• Warranty: Periods and security for the warranty period
• Acceptance: How and when the structure is accepted

Fixed price or unit price?

Serbian contract law has two levels here that you should keep apart. Without a specific agreement, a contractor who is on schedule can demand an adjustment if material and labour costs have risen and the price would increase by more than two percent as a result, and only for the portion above that threshold. If the contractor is culpably late, the threshold is five percent, and only increases up to the agreed completion date count (Art. 636 ZOO). If you have expressly agreed that the price will not change, the threshold is ten percent, and even then the contractor can only claim the difference above it (Art. 637 ZOO). The furthest-reaching option is the "ključ u ruke" clause, meaning turnkey: the contractor then undertakes all work needed for a usable building, and the agreed price also covers unforeseen work and additional quantities (Art. 640 ZOO). Such a price protects you best, but it requires complete planning, because every change on your side triggers a variation. With unit prices, by contrast, billing is based on the quantities actually executed. That is more flexible, but the cost risk lies with you.

Interim payments based on progress

The usual approach is billing via interim payment certificates (privremene situacije) according to progress and a final account (okončana situacija). Each interim certificate should be checked and approved by your construction supervisor before you pay. Agree on a retention until acceptance or a warranty guarantee, so that you have leverage if defects appear.

Securing the advance payment

A large advance payment without security is the biggest risk for owners. For every advance, ask for a bank guarantee (avansna garancija) that is paid out to you if the company does not perform. Reputable construction companies are familiar with this instrument.

Liability: ten years for structural soundness

Under Art. 644 of the Serbian Law on Obligations, the contractor is liable for defects affecting the structural soundness (solidnost) of a building if they become apparent within ten years of handover and acceptance. Shorter contractual and statutory periods apply to other defects. To enforce these claims later, you need careful documentation: construction drawings, the supervisor's reports, photos, the acceptance record and invoices. And you need a contracting party that will still exist in ten years, which is another reason to check the company thoroughly before signing.

Typical mistakes on construction projects in Belgrade

• Contract only in Serbian and not understood: Have the contract translated and reviewed by a lawyer.
• Supervision provided by the construction company: The company then supervises itself.
• Paying by time instead of progress: Pay only for work that has been checked.
• Building before notifying commencement of works: This can lead to a construction stop and fines.
• Using the building before the occupancy permit: Without it there is no entry in the cadastre, and selling or renting becomes a problem.
• Verbal variations: Record every change in writing, with its price and its effect on the schedule.

Whether a new build or converting an existing building makes more sense for you is weighed up in New Build or Older Apartment in Belgrade: Pros and Cons Compared.

Coordinating from abroad

A construction project in Belgrade can be managed from abroad if someone on the ground represents your interests. For owners based abroad, Exgentum provides an English-speaking contact who coordinates with the construction company, designer and supervisor, translates documents and site reports and keeps you updated on progress. How this support works for smaller projects is shown in Renovation in Belgrade with an English-Speaking Contact.

Frequently asked questions

Do I need a general contractor to build a house in Belgrade?

Legally no, but in practice usually yes if you are not on site yourself. A general contractor coordinates the trades and is the sole party you claim against for defects.

How do I check whether a construction company is reputable?

Through its entry in the APR register, its annual financial statements, a check for blocked accounts at the National Bank, the licences of the responsible engineers at the Chamber of Engineers and by visiting completed projects.

Who appoints the construction supervisor?

The owner commissioning the works. Under the Law on Planning and Construction, professional supervision is the owner's obligation. It should be independent of the construction company.

Is a fixed price common in Serbia?

Yes, it is possible, but it requires complete planning. Even with an agreed fixed price, the contractor can demand an adjustment if costs rise by more than ten percent. The strongest protection is a turnkey clause ("ključ u ruke"), under which unforeseen work is also included in the price.

How long is the construction company liable for defects?

Ten years from handover for defects affecting structural soundness. Shorter periods apply to other defects, and they should be set out in the contract.

Do I need a building permit to add a storey?

As a rule, yes. In apartment buildings, the consent of the owners' association is also required.