Entrepreneur in Serbia
The Pros & Cons of Registering as an Entrepreneur in Serbia
Entrepreneur as a legal form is the most popular type people choose when registering their own company. An entrepreneur is a natural person who performs an activity to generate income and is registered under the law on registration.
What are the Advantages of Being an Entrepreneur
The advantages of entrepreneurship as a legal form are the following:
- The registration procedure is straightforward and cheap
- You can use the entrepreneur’s property as personal property without justifying expenses (up to the amount of income of 6 million RSD)
- The entrepreneur has a choice whether he will be flat-rate taxed or will be in the VAT system (up to the amount of income of 8 million dinars when he has to enter the VAT system)
- An entrepreneur does not need an accountant (unless there are no employees)
- Entrepreneurs who keep double-entry books and operate in the VAT system pay lower income tax compared to other legal entities (tax rate 10%),
- Entrepreneurs may register a temporary cessation of activities for a limited or unlimited period.
Is it too Good to be True? Probably.
Disadvantages of entrepreneurship as a legal form:
- The entrepreneur is responsible for all his property (the property of the entrepreneur as a natural person and the property of the entrepreneur as a legal entity is unique), and his responsibility does not end by deleting the entrepreneur from the register
- An entrepreneur cannot sell a share in ownership or recapitalize a company
What are the Rules for Naming Your Entrepreneur Entity?
The business name of an entrepreneur must contain:
- The name and surname of the entrepreneur,
- The designation “entrepreneur” or “pr”
- The place where the entrepreneur’s registered office is
- The subject of the entrepreneur’s business must be different from the name of another entrepreneur.
For example, Peter Petrovic PR Plastics Manufacturing PETER PLASTICS Belgrade would be an appropriate name if there are no identical entries in SBRA.
An entrepreneur may perform all activities not prohibited by law for which he meets the prescribed conditions, including old and artistic crafts and domestic crafts. However, an entrepreneur cannot perform some activities, such as banking and insurance.
Does Entrepreneur Need Business Books?
If the entrepreneur pays the flat-rate tax as we have stated, if his income is lower than 8 million RSD, he is obliged to keep only a business book on the realized turnover on the KPO form. Suppose it does not meet the requirements for flat-rate taxation. In that case, it keeps business books according to the simple or double-entry bookkeeping system.
It is an interesting fact that entrepreneurs can employ family members without establishing an employment relationship.
An entrepreneur loses the status of an entrepreneur by deleting from the register of economic entities, which is done due to the cessation of activities.
Do you need help setting up your business?
If your answer is “YES”. You don’t have to start a journey alone. VAMA Consulting Group consultants can help you in overcome major obstacles and set up the legal form that suits your needs.
Andjela Kostadinovic - VAMA Legal Team
Master of Law with the passed bar exam, three years of professional experience in criminal, civil, and commercial law, and volunteer experience at the Legal Clinic for Protection against Discrimination, who excelled with special analytical and logical abilities, responsibility, and desire for continuous training. She graduated in 2018 from the Faculty of Law, University of Nis.
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