Serbian LLC (d.o.o.) with a Foreign Shareholder: What Foreigners Need to Know

A Serbian limited liability company (društvo sa ograničenom odgovornošću, d.o.o. for short, the counterpart of a German GmbH) can be founded and held by foreigners without a Serbian partner. For many Germans, Austrians and Swiss, that is the starting point: they want a company in Serbia but are not yet in the country themselves, or do not intend to live there permanently. This is exactly where the questions arise that general company formation guides cover too briefly. Which documents have to come from abroad, and in what form? Can the company be set up without travelling to Serbia? May the managing director live in Germany? And what happens for tax purposes when the company distributes profits to a shareholder abroad?

This article covers only the particular issues that arise from having a foreign shareholder or managing director. The general formation process is described in our guide to company formation in Serbia (in German), and the costs in detail in our article Company formation in Serbia: costs. Whether a d.o.o. is the right legal form in the first place is the subject of our comparison d.o.o. or preduzetnik (in German). Exgentum is neither a law firm nor a tax advisory firm. For the formation and for tax matters you need a Serbian lawyer and a tax advisor in both countries.

Serbian LLC with a foreign shareholder: the legal starting point

Under Serbian company law, a d.o.o. can be founded by one or more natural persons or legal entities, regardless of whether they are domestic or foreign. No special approval is required for foreign shareholders. The minimum share capital is 100 dinars. In practice, however, banks may expect a higher payment before they open the business account.

Foreigners can therefore be the sole shareholder and the managing director (direktor) at the same time. The differences compared with a domestic founder lie not in the rights but in the formalities: documents from abroad, evidence for the bank's anti-money-laundering checks, the in-person appointment for the electronic certificate and the tax consequences in two countries.

Documents from abroad: apostille and certified translation

Which documents are needed depends on whether the founder is a private individual or a company.

Germany, Austria, Switzerland and Serbia are contracting states of the Hague Apostille Convention. A signature notarised in Germany is therefore given an apostille, and no further legalisation is required. Documents in foreign languages are used in Serbia together with a translation by a court-sworn translator (sudski tumač). According to Serbian law firms, a company acting as founder must disclose its ownership structure up to the natural person and submit register extracts for every company in the chain. How old a register extract may be is interpreted differently by the register and by banks. Clarify this before the notarisation so that you do not have to go to the notary twice.

Formation by power of attorney without travelling

Registration with the Business Registers Agency (Agencija za privredne registre, APR) can be handled entirely through an authorised representative. The usual route looks like this:

1. In Germany, you sign a special power of attorney for a Serbian lawyer, have the signature notarised and an apostille attached.
2. The power of attorney is given a certified translation in Serbia.
3. The lawyer drafts the founding act, signs it with his qualified electronic certificate and files the application electronically with the APR.
4. After registration, the company receives its registration number and its tax identification number (PIB).

Alternatively, you can sign the founding act yourself before a German notary and send it to Serbia with an apostille, or you can sign it at a Serbian diplomatic or consular mission in Germany. Which route is faster depends on whether the power of attorney will also be needed for later steps.

Where remote formation reaches its limits

In practice, two steps require you to be present. The managing director needs a qualified electronic certificate for the later electronic filings with the APR and the tax administration. According to Serbian law firms, it cannot be issued or collected through an authorised representative. In addition, most banks require the managing director to attend at least one appointment in person for the business account and check the source of funds at that appointment. You should therefore plan a short trip to Belgrade, even if the registration itself is handled remotely.

Managing director resident abroad

The managing director of a d.o.o. does not have to live in Serbia and does not have to be a Serbian citizen. According to Serbian lawyers, a foreign managing director who is not employed in Serbia needs neither a residence permit nor a work permit. This changes as soon as he actually works in Serbia or enters into an employment relationship with the company.

From a German perspective, however, a managing director in Germany is a tax issue. Under § 1 (1) of the German Corporate Income Tax Act (Körperschaftsteuergesetz), a corporation is subject to unlimited tax liability in Germany if it has its place of management (Geschäftsleitung) in Germany. Under § 10 of the German Fiscal Code (Abgabenordnung), the place of management is the centre of the company's top-level management. If the Serbian d.o.o. is in fact run from a desk in Munich, Germany may treat it as subject to unlimited tax liability in Germany. Anyone who continues to live in Germany and runs the d.o.o. personally should clarify this question with a German tax advisor before the formation. A managing director who lives in Serbia and makes the decisions there is the cleaner route.

Register of beneficial owners

Every d.o.o. must enter its beneficial owners (stvarni vlasnici) in the Central Records of Beneficial Owners kept by the APR. The legal basis is the Law on the Central Records of Beneficial Owners (Zakon o centralnoj evidenciji stvarnih vlasnika), revised in 2025. The entry can be made together with the formation. Otherwise, the legal representative has to make it after registration. Under the new law, the deadline for this is 30 days; under the old law it was 15 days. Even so, have your lawyer confirm the entry at the time of formation.

For foreign shareholders, the most important point is that since the new law, supporting documents have to be uploaded showing why a person is a beneficial owner, for example register extracts, founding acts or shareholder agreements. In addition, there is an annual review obligation which, according to the APR, has applied since 1 October 2026: within one year of the last entry or confirmation, the data must be checked and confirmed, even if nothing has changed. The specialist press cites fines of 500,000 to 2,000,000 dinars for the company and 50,000 to 150,000 dinars for the responsible person. Banks compare the information with the register and report discrepancies.

Paying in the share capital from abroad

The share capital is paid into an account of the company at a Serbian bank. With foreign shareholders, the payment usually arrives as an international transfer in euros. This creates a typical reconciliation problem: the share capital is entered with the APR in dinars, but the payment arrives in a foreign currency. If the converted amount differs from the amount stated in the founding act, the bank confirmation and the register entry do not match. Agree the amount, currency and payment reference with the bank and your lawyer in advance.

Companies with foreign shareholders also have reporting obligations towards the National Bank of Serbia regarding foreign investments and loans from abroad. A loan from the shareholder to his own d.o.o. is, under foreign exchange law, a credit transaction with a foreign party and is subject to its own rules. Your accountant in Serbia should keep these reports in view from the outset.

Profit distributions to a shareholder abroad

This is the most important difference compared with a domestic shareholder. The d.o.o. pays 15 percent corporate income tax on its profit. If it distributes profits to a natural person, it withholds tax at source: under Art. 61 of the Serbian Personal Income Tax Law, dividends are capital income and are taxed at 15 percent under Art. 64. For non-residents, the company may apply a double taxation treaty under Art. 107a only if the shareholder proves his residence in the other state with a certificate of residence and is the beneficial owner of the dividend.

What the Germany–Serbia double taxation treaty provides

Between Germany and Serbia, the treaty that Germany concluded with Yugoslavia in 1987 continues to apply. It is unusual in one respect: profits from shareholdings in Serbian companies are governed not by the usual dividend article but by Art. 8, which was originally written for investments in Yugoslav "organisations of associated labour". In 2021, the German Federal Fiscal Court (Bundesfinanzhof, BFH) ruled (I R 63/17) that this term also covers the successor companies, i.e. today's corporations. In the case decided, which concerned Bosnia and Herzegovina under the same treaty, the source state was allowed to tax the distribution, and Germany exempted it, taking it into account only for the tax rate (exemption with progression, Progressionsvorbehalt). Serbian lawyers likewise assume that Art. 8 applies for Serbia, with a limit of 15 percent, and rely on an opinion of the Serbian Ministry of Finance.

A worked example shows the order of magnitude: if the d.o.o. makes a profit of 100,000 euros, it pays 15,000 euros in corporate income tax. If it distributes the remaining 85,000 euros, it withholds 12,750 euros in tax at source. The shareholder receives 72,250 euros, and the total tax burden in Serbia is 27.75 percent. Whether further tax is due in Germany depends on whether the exemption applies in your case.

Two caveats belong here. First, in its overview as of 1 January 2026, the German Federal Ministry of Finance (Bundesfinanzministerium) listed an initialled revision protocol with Serbia whose content has not yet been published. The rules may therefore change. Second, for foreign companies with German shareholders, Germany also examines controlled foreign company taxation (Hinzurechnungsbesteuerung) under the Foreign Tax Act (Außensteuergesetz) and anti-abuse provisions. Different rules again apply to a German GmbH as shareholder. Before the first distribution, these questions belong with a tax advisor who knows both legal systems.

If the shareholder moves away later

Anyone who founds the d.o.o. while still living in Germany and only moves to Serbia later holds a shareholding in a corporation at the time of departure. From a shareholding of 1 percent, this can trigger exit taxation (Wegzugsbesteuerung) under § 6 of the Foreign Tax Act, even if the company is based abroad. How this works and how to plan for it is explained in our article on exit taxation on GmbH shares (in German).

The company as a basis for a residence permit

Many foreign shareholders also found the d.o.o. in order to be able to live in Serbia. The Serbian government's official information website lists activity as a shareholder or entrepreneur as self-employment (samozapošljavanje), which is recognised as a purpose of residence in the area of employment. For a longer stay with work, there is the single permit for temporary residence and work (jedinstvena dozvola). The government expressly points out that while founding a company is a recognised ground, it does not guarantee the permit.

In practice, the Ministry of the Interior checks whether the company is actually operating. A company without an account, without bookkeeping and without turnover is a weak basis. Plan the structure so that it meets the requirements of the Ministry of the Interior before you found the company. The residence application process itself is described in our article on the residence permit in Serbia. Also bear in mind that a residence permit alone does not establish tax residence in Serbia and does not end your German tax liability.

Checklist for a Serbian LLC with a foreign shareholder

• Determine the legal form and shareholder structure; for holding structures, document the ownership chain
• Have the power of attorney for the Serbian lawyer notarised in Germany and an apostille attached
• Keep register extracts and identity documents up to date; translations by a court-sworn translator
• Plan a trip to Belgrade for the certificate and the bank appointment
• Enter the beneficial owners with supporting documents and confirm them annually
• Coordinate the payment of the share capital with the bank and the lawyer
• Clarify the place of management and distributions in advance with a tax advisor in both countries

How Exgentum supports you

Exgentum does not form companies and does not provide legal or tax advice. The formation is handled by a Serbian lawyer, the bookkeeping by a licensed accountant. We support you on the organisational side: we coordinate appointments with the lawyer, notary, translator and bank in Belgrade, accompany the managing director to the certificate and bank appointments and help compile the documents for the residence application. Your contact person at Exgentum speaks German or English.

Frequently asked questions

Can a German found a GmbH (d.o.o.) in Serbia on his own?

Yes. A d.o.o. can be founded by a single foreign natural person or legal entity; a Serbian co-shareholder is not required.

Do I have to travel to Serbia for the formation?

Not for the registration, which is handled with an apostilled power of attorney. In practice, however, at least one in-person appointment is required for the managing director's electronic certificate and for the business account.

May the managing director live in Germany?

Serbian law does not require residence in Serbia. If the company is in fact managed from Germany, however, it may become subject to unlimited corporate income tax liability in Germany.

How high is the withholding tax on dividends to a shareholder in Germany?

Serbia taxes dividends paid to natural persons at 15 percent. Under the treaty with Yugoslavia that continues to apply and the case law of the BFH, an exemption with progression is possible in Germany. Have your individual case checked.

Do I automatically get a residence permit with my d.o.o.?

No. Working in your own company is a recognised purpose of residence, but the permit is not guaranteed and requires a company that is actually operating.

Conclusion

A Serbian LLC with a foreign shareholder is legally straightforward; the work lies in the details. Documents from abroad need an apostille and a certified translation, registration works by power of attorney, but you have to travel to Belgrade at least once for the certificate and the bank. Since 2025, the register of beneficial owners has required supporting documents and an annual confirmation. For tax purposes, the place of management and the treatment of distributions under the old Yugoslavia treaty determine the overall burden. Our advice: clarify the place of management, distributions and any later move abroad with a tax advisor before you sign the power of attorney. You can then plan the appointments in Belgrade with us.