How to Get Residency in Serbia for Tax Purposes

Introduction

When looking for tax residency options in Europe, many people turn away due to the high taxes associated with the region. However, there are hidden gems like Serbia that offer the opportunity to live, work, or do business with lower taxes than in other parts of the Western world.

Serbia – Country Review

Serbia is a landlocked country in the West Central Balkans with a population of 8,648,676 people. Gaining independence in 2006, Serbia has made significant progress in its economy, tourism, and openness. The Serbian economy primarily focuses on services, trade, energy, manufacturing, and agriculture.

Tax Residency vs. Tax Non-Residency

Tax residency is any jurisdiction where you are legally required to pay taxes, whereas tax non-residency exempts you from paying certain taxes. Each jurisdiction has its own tax residency criteria, making it crucial to understand when and where to establish tax residence.

Tax Residency in Serbia

To qualify as a Serbian tax resident, you must live in Serbia for at least 183 days per year, own a residence, or own a business. Serbian tax residents are taxed on their worldwide income.

How to Establish Tax Residency in Serbia

Two primary routes to establish tax residency in Serbia are through company formation or real estate investment.

Residence by Company Formation: Setting up a company in Serbia is a quick and straightforward process. There is no minimum investment required, and the process can be completed in 5-7 days.

Residence by Real Estate Investment: This option does not require a minimum investment amount, but the process is slower and requires you to stay in Serbia for 1-2 months after filing for residence.

Establishing Permanent Residence in Serbia

After five years of temporary residency, you can apply for permanent residence in Serbia. This also allows you to include your spouse and children under 18 in your application.

Benefits of Establishing Tax Residency in Serbia

• Favorable Taxes: Serbia has some of the lowest tax rates in Europe, offering significant tax savings for foreign residents.
• Favorable Business Environment: Serbia has a friendly attitude towards entrepreneurs and does not impose restrictions on investment, foreign business ownership, or hiring a local workforce.
• Strong Passport: Serbian residency can eventually lead to citizenship and a Serbian passport, which ranks 28th and allows visa-free access to 134 countries.

Conclusion

Establishing tax residency in Serbia can be a viable option for those seeking a European base with lower taxes and a favourable business environment. However, if the goal is to reduce taxes to zero, it might be necessary to look beyond Europe.