How to Register a Sole Proprietorship (Preduzetnik) in Serbia

Starting as a sole proprietor (locally known as a preduzetnik) is appealing in Serbia thanks to its simplicity, affordability, and quick digital process. It’s a favorite choice for freelancers, artisans, and micro-traders who value autonomy.

The process is relatively straightforward. You can register entirely online via the Serbian Business Registers Agency (APR). Nonetheless, it's important to choose the right tax model, understand VAT requirements, and manage your social contributions correctly.

The main challenges include navigating self-taxation rules, registering VAT (if needed), and ensuring accurate bookkeeping. However, the benefits of low costs, rapid registration, and full operational control make it a solid option for solo entrepreneurs.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a sole proprietorship in Serbia?

In Serbia, a sole proprietorship is referred to as a preduzetnik. It represents the simplest business structure where an individual conducts commercial activities in their own name. As a preduzetnik, you are personally liable for all business responsibilities, and your business transactions are tied to your identity.

How does a sole proprietorship (Preduzetnik) work in Serbia?

Preduzetnik vs other business structures in Serbia

Step-by-step guide: How to register a sole proprietorship in Serbia

Step 1: Check eligibility

Anyone who is at least 18 years old (both locals and foreigners) can register as a preduzetnik. Foreign nationals will need valid ID or passport, residence/work permit, and local address.

Step 2: Choose your business name

The name must include your full legal name, “PR”, and your business location. You begin by reserving the name online or via the APR portal. This reservation is valid for 60 days. If you don’t complete the business name registration within this timeframe, the name becomes available again.

Step 3: Gather required documents

Typically you need:

• ID or passport

• Name reservation confirmation

• Proof of address

• Activity description and permits (if required)

• Foreigners may need power of attorney or representation documents

Step 4: Register via APR

Use the e-Registration platform with your eID. Click the “one-stop-shop” option to simultaneously register with the Tax Administration, Statistical Office, and the Social Security register.

Step 5: Pay fees

Registration fees are typically around €30. Payments can be made online via card during the process.

Step 6: Post-registration obligations

You will receive:

• Registration decision and business ID

• Tax Identification Number (PIB)

• Social Security and statistical registry inclusion

Begin issuing invoices, track income/expenses, and register VAT if your turnover exceeds the threshold.

Financial and tax obligations for sole proprietors in Serbia

Flat-rate sole proprietor (paušalac): If you fall in this category, you’ll pay taxes based on a fixed amount that depends on your business zone and activity. This option does not require detailed accounting and documentation, making it a simpler tax structure for entrepreneurs starting a new business on a small scale.

Sole proprietor with regular accounting (preduzetnik): This category for entrepreneurs requires you to maintain business accounting records and pay income tax on profits, which better suits sole proprietors with larger and more complex businesses.

VAT (PDV): VAT registration is required based on a turnover threshold of 8 million RSD. The standard rate is 20%, with reduced 10% on select services, such as basic food, newspapers, medicines, and public transportation services. Returns are filed monthly, but you can file quarterly if your annual turnover is less than 50 million RSD.

Social Security contributions: It is mandatory to contribute to pension and disability insurance, health insurance, and unemployment insurance. The current rates for sole proprietors are:

• Pension and disability insurance: 24%
• Health insurance: 10.3%
• Unemployment insurance: 0.75%

Recordkeeping: You must keep income, expense, and VAT records. Straightforward bookkeeping is sufficient, though more extensive systems may apply depending on turnover and the type of sole proprietor you register as.

Launch your contracting career and stay compliant with Deel

Registering as a preduzetnik gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

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