🏛️ Company formation

Branch, Representative Office or d.o.o.? How a Foreign Company Can Operate in Serbia in 2026

A foreign company that wants a presence in Serbia has exactly three routes: a subsidiary (a Serbian d.o.o. owned by the parent), a branch (ogranak), or a representative office (predstavništvo). They are not tiers of the same thing — they differ on the one point that matters most, who is liable, and on the one that decides your annual budget, how much compliance work each generates.

The short version: a representative office may not earn anything, a branch may trade but exposes the parent’s entire balance sheet, and a subsidiary is the only structure that ring-fences risk. Most foreign groups end up with a d.o.o. This article explains when the other two are the better answer anyway.

The comparison in one table

	Representative office	Branch (ogranak)	Subsidiary (d.o.o.)
Separate legal entity	no	no	yes
May invoice Serbian clients	no	yes	yes
May employ staff	for its own needs	yes	yes
Parent’s liability	full	unlimited	limited to the capital contributed
Minimum share capital	none	none	RSD 100 (about €0.85)
APR registration fee (2026)	RSD 8,000	RSD 8,000	RSD 8,000
Corporate income tax	normally no taxable profit	15% on Serbian profits	15%
Withholding on profit sent to the parent	n/a	none on branch remittances	20% on dividends, treaty-reduced
Statutory accounts filed with APR	limited	yes	yes
Can be sold or partly sold	no	no	yes

Route 1 — the subsidiary (d.o.o.)

A d.o.o. wholly owned by a foreign parent is a Serbian company like any other. It has its own legal personality, its own assets and its own liabilities. If it fails, the parent loses what it put in and nothing more.

Two features make this route unusually cheap by European standards:

• Minimum share capital is RSD 100 — a legal formality rather than a funding requirement. You capitalise the company at whatever level the business actually needs, usually through a shareholder loan or a later capital increase.
• Registration is a single APR filing, with a state fee of RSD 8,000, and no mandatory notary or lawyer for a standard single-member company.

You do not need to fly in: the whole formation can be handled by a power of attorney, which is covered step by step in opening a Serbian company remotely, with the full cost breakdown in our guide to company formation in Serbia.

The one cost the other routes do not have is dividend withholding. Profit distributed from a Serbian company to a non-resident corporate shareholder is subject to 20% withholding tax, unless a double tax treaty reduces it. Serbia has a wide treaty network, and treaty rates of 5% or 10% are common — with 5% often conditional on the parent holding at least 25% of the capital. The reduced rate is not automatic: the paying company needs the parent’s certificate of tax residence before each payment, otherwise it must apply 20% and you are left reclaiming.

Route 2 — the branch (ogranak)

A branch is defined in the Serbian Companies Act (Part Eleven, art. 567 onwards) as a separated organisational part of a company without legal personality. It acts in the name and for the account of the parent, and the parent is liable without limitation for everything the branch does.

What a branch can do is almost everything a company can: obtain a tax number (PIB), open a resident bank account, sign contracts, invoice Serbian customers, employ people, register for VAT. What it cannot do is contain a problem. A dispute with a Serbian customer, a tax assessment or an employment claim reaches straight through to the parent.

Branches are the right answer in a narrow set of cases:

• the contract, licence or track record that wins the work is held by the parent entity and cannot be transferred to a new company;
• the group deliberately wants Serbian results consolidated into the parent’s accounts without an intermediate entity;
• the presence is expected to be temporary — a project office for a construction or engineering contract, for example.

What a branch does not save you is administration. Serbian accounting law expressly covers branches of foreign legal entities, so a branch keeps full double-entry books and files annual statutory accounts with APR, the same as a domestic company.

Route 3 — the representative office

A representative office may only carry out preliminary and preparatory activities: market research, promotion, negotiations, building contacts. It may sign contracts only for its own needs — the office lease, equipment, staff who work for the office itself.

It may not sell, invoice or deliver to Serbian customers. If it starts to, the office risks being treated as a permanent establishment retrospectively, with tax assessed on the profits attributable to that activity plus interest.

In practice a representative office makes sense for perhaps six to twelve months, while you decide whether the market is real. The moment a Serbian customer asks for an invoice, you have outgrown it.

Tax: where the two trading routes actually differ

Both a branch and a subsidiary pay corporate income tax at 15% on profits attributable to Serbia. A branch is the textbook example of a permanent establishment of a non-resident: it files a tax balance and a corporate income tax return within 180 days of the end of the tax period — 30 June for a calendar-year taxpayer — and pays monthly advances during the year. The mechanics of the rate, the base and the advances are set out in corporate income tax in Serbia 2026.

The real difference sits one level up, in how profit gets home:

• Subsidiary: profit is distributed as a dividend. That triggers the 20% withholding, reduced by treaty. The comparison between paying yourself a salary and paying a dividend is worked through in dividend tax in Serbia.
• Branch: there is no dividend, because there is no separate company — the after-tax result belongs to the parent already, and Serbia does not levy a separate branch remittance tax. In exchange, everything the branch charges to or receives from head office is scrutinised as an internal allocation, and management or head-office cost recharges are a standing audit topic.

Neither route is automatically cheaper. A single-shot project that repatriates once may pay less through a branch; an operating business that reinvests locally for years and eventually gets sold is almost always better as a d.o.o.

The permanent establishment trap

The most expensive mistake is choosing none of the three. A foreign company that sells into Serbia through a fixed place of business, or through a dependent agent who habitually concludes contracts on its behalf, can create a permanent establishment without registering anything. The tax liability then arrives after the fact — assessed, with interest, and without the deductions a properly kept set of books would have supported. If you have staff or a long-running contractor operating in Serbia, get the position checked before revenue starts, not after.

The compliance load nobody quotes in the setup fee

Whichever trading route you pick, the annual obligations are close to identical:

1. Double-entry bookkeeping under Serbian accounting rules, in Serbian and in dinars.
2. Annual financial statements filed with APR by 31 March — see annual financial statements in Serbia.
3. Corporate income tax return within 180 days of year-end, plus monthly advances.
4. VAT once turnover passes RSD 8,000,000 in any 12 months, with monthly returns and electronic VAT recording thereafter. Voluntary registration is available earlier; the rules for non-resident groups are in VAT in Serbia for foreign companies.
5. E-invoicing through SEF — mandatory for B2B and B2G transactions; see e-invoicing in Serbia.
6. Payroll filings with every salary payment, and monthly even where no salary is paid.
7. Beneficial owner registration with APR’s Central Registry. Branches and representative offices of foreign entities are in scope, not just companies, and the registry now requires supporting documents and an annual confirmation that the data is still accurate. Fines run from RSD 500,000 to RSD 2,000,000.

Point 7 is the one foreign groups miss most often, because the beneficial owner sits several corporate layers above Serbia and the evidence has to be produced for each layer.

Four questions that decide it

1. Will you invoice customers in Serbia? If no — representative office. If yes, it is branch or subsidiary.
2. Can the parent accept unlimited liability for Serbian operations? If no — subsidiary.
3. Must the contracting party be the parent entity for licensing, tender or reference reasons? If yes, a branch may be the only workable answer.
4. Might you sell, spin off or bring in a local partner? Only a subsidiary can be transferred; a branch cannot be sold, only closed.

If the answers point to a company, the cost side is set out in cost of company formation in Serbia; if you are still weighing Serbia against alternatives, start with the tax guide for foreigners.

FAQ

Is a branch cheaper to run than a subsidiary? Not meaningfully. The APR fee is the same and the accounting, tax and payroll obligations are effectively identical. The saving is in avoiding dividend withholding, not in administration.

Can a foreign company own 100% of a Serbian d.o.o.? Yes. There is no local shareholder or local director requirement, and no minimum investment beyond the RSD 100 statutory capital.

How long does registration take? The APR filing itself is a matter of days once the file is complete. The critical path is the foreign documentation — parent company extract, corporate resolution, power of attorney — which must be apostilled and translated by a certified court translator. Plan in weeks, not days.

Does a representative office need a tax number? It normally registers with APR and is identifiable, but where it genuinely carries out no commercial activity its tax footprint is minimal. That changes the moment it does anything revenue-generating.

Can we convert a branch into a subsidiary later? There is no statutory conversion. In practice a new d.o.o. is incorporated, the business and contracts are transferred, and the branch is deregistered — which is why picking correctly at the start saves real money.

Who signs contracts for a branch? The branch representative signs, but the contracting party is the foreign parent. Counterparties sometimes object once they read the fine print, so raise it early in negotiations.

We set up Serbian companies and branches for foreign owners and then run the books: statutory accounts, corporate tax, VAT, e-invoicing and payroll, reported to you in English. Get in touch or see our accounting service in Serbia.

This article is informational and reflects Serbian company and tax law as at publication. Confirm the treaty position and the exact registration requirements for your group with a Serbian adviser before filing.