d.o.o. vs Paušal in Serbia: Which to Choose as a Foreign Founder (2026)
If you are a foreign founder setting up in Serbia, the first real decision is the structure: a d.o.o. (LLC) or the flat-rate paušal (a sole trader on the pre-set tax regime). The choice drives your liability, your tax, your bookkeeping burden and how serious you look to larger clients. This guide compares the two for non-residents in 2026.
The two structures in one line
- Paušal (preduzetnik on the flat-rate) — a sole trader who pays a fixed, pre-set monthly amount and keeps no double-entry books, while annual income stays under 6,000,000 RSD.
- d.o.o. (LLC) — a limited company with liability capped at the share capital, 15% flat tax on profit, no income cap, but mandatory double-entry bookkeeping. Minimum share capital is just 100 RSD (about €1).
Liability: the biggest difference
This is usually the deciding factor:
- Paušal — you are liable with all your personal assets for business obligations.
- d.o.o. — liability is limited to the share capital; your personal assets are, as a rule, protected (subject to statutory exceptions).
If the work carries risk — large contracts, potential disputes, meaningful liabilities — the limited liability of a d.o.o. is a strong argument on its own.
Quick comparison
| d.o.o. (LLC) | Paušal (sole trader) | |
|---|---|---|
| Liability | Limited to share capital | Full personal assets |
| Bookkeeping | Double-entry (required) | None (turnover ledger only) |
| Tax | 15% flat on profit | Fixed, pre-set monthly |
| Income cap | None | Up to 6,000,000 RSD/yr |
| Share capital | From 100 RSD (~€1) | n/a |
| Best for | Growth, investors, larger clients | Solo IT/services, low costs |
Tax and admin
A d.o.o. pays 15% on profit and must keep double-entry books, file year-end financial statements with the APR and a corporate tax return. A paušal has the lightest admin in Serbia: no books, a predictable monthly obligation, and just turnover tracking and invoicing — but only while you stay under the 6,000,000 RSD cap.
The independence test (critical for paušal)
If you go the paušal route while invoicing mostly one client, you must understand the independence test (test samostalnosti) — nine criteria that decide whether you are genuinely independent or a disguised employee. Meet five or more and income from that client can be re-classified and taxed far more heavily. For a founder living abroad and billing a single foreign client, a d.o.o. is often the cleaner, lower-risk structure.
Near-EU, not EU
One honest caveat for either route: Serbia is not in the EU single market. Registering a d.o.o. or a paušal here does not grant EU/EEA market access or an EU VAT number. What you get is a low-cost base next to the EU with a wide network of double-tax treaties. If EU single-market access is essential to your model, an EU jurisdiction is the better fit.
How to decide
- Pick the paušal if you are a solo service/IT provider, income is safely under the cap, costs are low, and you genuinely operate independently.
- Pick a d.o.o. if you want asset protection, plan to grow, take on partners or investors, or work with larger clients who expect a company.
The structure is not permanent: a paušalac who outgrows the cap moves to keeping books, and many later open a d.o.o.
How we help
We register either structure with the APR remotely and run the accounting in English. See company formation in Serbia or contact us for an honest recommendation and a clear quote.
Note: this article is general information, not tax or legal advice. Verify current rules with the APR and the Tax Administration before deciding.