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[null,"Prepared By:","Contributors:"]
[null,"JPM & Partners"]
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[]
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["Social Enterprise Law Surveys"]
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["Report Generated: 11/19/2025"]
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["View your report results on next tab"]

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["Question","Serbia"]
["I. Enterprise Form"]
["What jurisdiction(s) do you practice in?","Republic of Serbia\n"]
["What are the most commonly used types of for-profit corporate organizational forms in your jurisdiction (e.g., corporation, limited liability company, benefit corporation, social purpose corporation, etc.) used by Enterprises operating a trade or business (rather than for investment or holding company purposes)? Please briefly describe these forms. a. Of these, which are the most common for-profit organizational forms used by Enterprises seeking financing from investors and that will have multiple owners? b. Other than organizational forms specifically designed for Social Enterprises (and discussed below under Question 4), which, if any, are the most common for-profit organizational forms used by Social Enterprises?","The most common for-profit corporate organizational forms utilized in Serbia are the joint stock company (“\nJSC”) and the limited liability company (“\nLLC”), which are well understood and traditional in nature. In many ways, they are similar but still different. LLC is a company that is founded by one or more legal entities and/or individuals, in the capacity of shareholders for the purpose of performing certain activities under a common business name. On the other hand, JSC is a company that is established by one or more legal entities and/or individuals in the capacity of shareholders for the purpose of performing certain activities under a common business name, but whose share capital is determined and divided into shares issued for that purpose. Both forms’ shareholders are not personally liable for obligations of their companies, except up to the amount of the unpaid contribution to the company's assets. JSC is further divided into open JSC and closed JSC. An open JSC is listed on a stock exchange and cannot restrict the transfer of its shares to third parties. However, an LLC is an economically and financially more favorable organizational form and is also easier for management.\n \na. Enterprises that seek financing from investors and will have multiple owners tend to form both LLCs and JSCs. However, forming an LLC for such a purpose is more usual, since in the case of a listed JSC the issuance of new shares requires an elaborate and more complicated procedure.\nb. If not using Associations of citizens, Foundations, Endowments, WISEs or Cooperatives, Social Enterprises often use an LLC, as the LLC form is flexible in terms of permitted modifications to business purposes and management, as well as fewer reporting requirements. Aside from that, they use a JSC, but it is not a common occurrence since an LLC is subject to fewer mandatory regulations compared to a JSC. If a Social Enterprise is registered as an LLC or JSC, it usually operates as a spin-off (a subsidiary company) of a non-profit organization (“\nNPO”), a business incubator, or a development agency.\n"]
["Do any of your jurisdiction’s traditional organizational forms require or permit the board or managers to consider, balance or prioritize interests other than shareholder value in decision making? What other interests, if any, are they required to or allowed to consider (e.g., interests of employees, customers, the environment, etc.)?","LLC and JSC – No requirement. However, even though they are primarily focused on profit gaining, with a well-defined internal act – Articles of association, they can direct their purpose so that they become a social enterprise. Therefore, along with the statutory issues that have to be considered pursuant to the law, boards may be obliged to consider other interests as well, pursuant to their internal regulation.\n"]
["Does your jurisdiction have organizational forms specifically designed for Social Enterprises? If so: a. What type(s) of organizational forms are they? b. How do they materially differ from the most closely analogous traditional organizational form? c. What are the main benefits for founders and funders of such organizational forms? d. Are there any restrictions on the use of these organizational forms (such as profit-caps, stakeholder involvement and impact reporting)? If there are, what are they? e. Are there any material differences in timing or costs for forming a Social Enterprise versus a traditional Enterprise? f. How prevalent and well known are Social Enterprise forms?","Since the concept of an institutionalized Social Enterprise is still relatively new in Serbia, there are organizational forms that are used by Social Enterprises (except for common corporate organizational forms like LLC and JSC), but which are not explicitly designed for them, such as (Social) Cooperatives, Work integration social enterprises (“\nWISE”) for people with disabilities, Associations of citizens, Foundations and Endowments.\nAssociations of citizens, Foundations and Endowments:(b) Associations of citizens are associations of individuals gathered around a common social goal. On the other hand, Foundations are legal entities without members and assets constituted for obtaining a certain charitable public benefit goal, and Endowments are legal entities without members to which the founder has intended certain assets for the purpose of charitable realization of a public benefit goal or private interest. They are mostly set up to explicitly pursue social objectives, although this is not obligatory for their registration, but it has to be identified in the organizational documents agreed upon by the founders. Decision making is conducted through an assembly, a managerial board and a supervisory board, which guarantee democratic participation, control and transparency.\n(c) The main benefits are being allowed to generate income from the economic activity they perform (delivering services or manufacturing) and being exempted from paying the value added tax (VAT) for revenues up to eight million RSD a year (around EUR 68,000), excluding donations and membership fees. The law is not precise in defining the limit for income generation through economic activity, but it states that economic activity should be of “a smaller size”, so as to support the primary activity of the entity\n(d) However, donations are still their most important source of income. They define their business in accordance with their statutes and proclaimed social goals and they are not allowed to distribute profit. They are oriented towards vulnerable categories in the manner of either employing them or providing financial services/support to them.\n(e) Yes: in order to form an Endowment, the minimum value of the initial assets necessary for the establishment is EUR 30,000.\n(f) Among Social Enterprises, Associations of citizens and Foundations are the most commonly used organizational forms: they represent almost 75% of the total number of Social Enterprises in the Republic of Serbia.\n(Social) Cooperatives(b) Cooperatives primarily differ from LLCs and JSCs in that ownership is very inflexible and not based on investment amount. Cooperatives’ basic principles are as followed: (i) membership is open and voluntary; (ii) control is democratic on a one-member-one-vote basis; (iii) members participate in the financial gains of the entity through a fixed interest on the contribution which is paid out of profits, but only after loss-covering and education funds payments; (iv) they provide education and training to members; (v) they are autonomous; (vi) they cooperate with other cooperatives; and (vii) concern for community and members is central.\n(c) It is state-encouraged through various economic and development policy measures, as well as special funds for cooperative development. Law on Cooperatives acknowledges various types, enabling support for a range of activities.\n(d) Members of Cooperatives can be individuals only; legal entities are excluded according to the Law on Cooperatives.\n(e) No timing or cost differences.\n(f) Legal provisions regulating Cooperatives are more demanding than those of Associations of citizens, which is why Social Enterprises are more prone to take this legal form. The Law on Cooperatives mentions specifically Social Cooperatives, where at least 50% of their profit should be reinvested to achieve social goals; however, this form is a novelty in Serbia: only four such Cooperatives are registered.\nWISE (Work integration social enterprises for people with disabilities)(b) WISEs are the most straightforward type of Social Enterprise in Serbia. It is a form of employment and professional training for persons that are difficult to employ. Besides paying salaries, WISEs have to provide adequate training and psychological support to people with disabilities (“\nPWD”).\n(c)  The main benefit of using this form is state support in the manner of receiving significant subsidies and having priority when competing for public tenders.\n(d) WISEs are obliged to invest a part of the income they generate in the improvement of working conditions, skills, social integration, living standards and meeting the needs of PWDs. Also, they are obliged to have at least 50% of PWDs among their employees of which at least 10% require special conditions in the workplace.\n(e) There are no material differences in timing or costs for using this Enterprise form.\n(f) This organizational form represents around 11% of the total number of Social Enterprises in Serbia.\n"]
["Are Social Enterprises permitted to be formed and operated as Nonprofits? If so: a. Are Nonprofits that are Social Enterprises treated differently under the law as compared to Nonprofits that are not Social Enterprises, whether from a corporate, tax or other perspective? b. Are there any material benefits of, and/or restrictions on, using a Nonprofit form for Social Enterprises that does not apply to Nonprofits that are not Social Enterprises? c. Is there any type of “hybrid” Nonprofit form that requires less reporting and/or allows for faster formation? If so, please describe the drawbacks of utilizing this form (i.e. fewer tax benefits). d. How prevalent is the use of Nonprofits for Social Enterprises?","Yes, in the form of Associations of citizens, Foundations and Endowments.\nHowever, (i) they are not given any special treatment by virtue of being a Social Enterprise Nonprofit, (ii) Nonprofits that do not generate revenue by selling products on the market or performing services for a fee do not file a tax return and tax balance, nor do they have any obligations in terms of corporate income tax. Thus, as a practical matter, not all Social Enterprises may form as Nonprofits. Social Enterprises that do organize as Nonprofits enjoy the same tax benefits as other Nonprofits and have the same burdens and restrictions, and there is no lesser reporting or faster formation process for Social Enterprise Nonprofits as compared to other Nonprofits.\nWhere their businesses fall in the category of activity permitted to Nonprofits, it is indeed very prevalent for Social Enterprises to form as Nonprofits. Since Associations of citizens and Foundations are the most prevalent organizational form of Social Enterprises, Nonprofits are the prevalently used category as well.\n"]
["Does your jurisdiction allow for worker-owned Enterprises, such as cooperatives? If so, please describe any material benefits of, and/or restrictions on, using such forms.","Yes, Workers' Cooperatives produce and sell their products and provide services, performing activities through the economic association of Cooperative members who are, as a rule, also employed in the Cooperative that is their employer.\nIt allows for worker control and management as well as alignment of worker and investor interests. For more information, see aforementioned Cooperatives in the answer under question number 4.\n"]
["Are there unique reporting requirements for Social Enterprises? If there are, please describe them. Please also discuss what government bodies Social Enterprises are required to report to.","If a Social Enterprise decides to form using one of the abovementioned forms, they would not be subject to any additional reporting requirements by virtue of them being a Social Enterprise. Also, there are no specific government bodies that Social Enterprises are required to report to, since there is neither a dedicated government body that oversees them; the only central level public entity dealing directly with Social Enterprises is the working group of the Ministry of Labour, Employment, War Veterans and Social Affairs, but it is only drafting the Act on Social Enterprises and not providing direct support. However, the Ministry expressed the intention to establish a permanent team.\n"]
["In your jurisdiction, has case law and jurisprudence evolved to address Social Enterprises? If there is meaningful jurisprudence around Social Enterprises, please provide some brief examples.","Since the concept of an institutionalized Social Enterprise is still new in Serbia, there is not much jurisprudence evolved to address it. Noteworthy is the attempt by the Government to draft the Act on Social Enterprises, but it is yet to be adopted.\n"]
["Does your jurisdiction have any ESG requirements for Enterprises generally? If it does, please describe.","No.\n"]
["Does your jurisdiction have any ESG requirements specifically for Social Enterprises? If it does, please describe.","Please refer to the answer under question number 4.\n"]
["Does your jurisdiction have any ESG requirements for investors? If it does, please describe.","No.\n"]
["II. Funding"]
["Are any major investor classes (e.g., pension funds, mutual funds, etc.) required to look at ESG issues when making investment decisions in your jurisdiction? a. If they are, please describe the requirements. b. If they are not, are they permitted to consider such factors? c. What other relevant factors do investors tend to consider (aside from profit motive).","No major investor classes are required to look at ESG issues. While investors may be permitted to consider such factors, they are not required to do so. Some draw attention to an increased focus on factors other than a profit motive.\nThere are several private funds and large institutional investors that do consider ESG issues when making their investment decisions, but that depends on their individual interests and goals.\n"]
["What kinds of philanthropic funding do Social Enterprises in your jurisdiction commonly receive (e.g., grants, charitable investment, traditional investment)?","Social Enterprises receive grants/subsidies, donations, sponsorships, private donations, non-pecuniary contributions (such as volunteer work). They come from foreign development organizations and embassies, various foundations with a representative office in Serbia, or domestic foundations. A very significant part also comes from corporations (Telenor, NIS, etc.).\n"]
["How prevalent, if at all, are new for-profit impact investments in your jurisdiction (e.g. traditional instruments with impact terms, new investment instruments, aggregation with philanthropic capital, community based funding, etc.)?","For-profit impact investments are relatively new in Serbia but with a notable increasing trend, and parties are becoming more familiar with them. Some prominent investors are forming specific impact funds: for example, the SEAF Impact Serbia Fund invests in growth-stage small and medium enterprises in collaboration with local entrepreneurs for both market returns and social impact.\n"]
["What are the types of government funding and support available to Social Enterprises, if any, available in your jurisdiction (e.g., grants, investments, bonds, and guarantees)? a. How difficult is it for Social Enterprises to obtain government funding? b. Is any government funding limited to Enterprises incorporated using Social Enterprise forms?","There is no special government funding specifically available to Social Enterprises as such. Depending on the Enterprise form and industry, government grants/subsidies, loans and guarantees may be available.\n"]
["Are there any companies that are formed as a Social Enterprise listed on your jurisdiction’s leading securities exchange(s)?","On Serbia’s leading securities exchange are listed JSCs, which is a general corporate organizational form, sometimes taken by Social Enterprises too. However, due to the intinction of a “Social” Enterprise being only internally visible, there is no data of Social Enterprises being or not being listed on Serbia's leading securities exchange.\n"]
["To what extent are publicly traded Enterprises required to disclose ESG related factors in annual reports/public filings in your jurisdiction.","They are not required to disclose ESG factors, though some choose to do so for marketing reasons.\n"]
["How prevalent, if at all, are impact bonds in your jurisdiction?","Impact bonds are relatively new in Serbia; therefore, they are not often being used. However, such incentives exist and are yet emerging (for example, Social Impact Bond Employment Program has been endorsed by the Government of Republic of Serbia).\n"]
["In your jurisdiction, are there any restrictions on foreign investments or donations that are unique to Social Enterprises (whether incorporated as for profit entities or as Nonprofits)?","No.\n"]
["Is “crowdfunding” legal in your jurisdiction? Are there rules under applicable securities laws that make it easier for smaller businesses or Social Enterprises to take money from investors that are not sophisticated/accredited/qualified under applicable statutes?","Crowdfunding is legal, allowing small businesses and Social Enterprises to solicit investment from the general public. However, it is not yet that prevalent, and it has been used mostly in urgent situations (although very successfully).\n"]
["III. Tax"]
["Are there any tax exemptions that are uniquely available for Social Enterprises? a. Please describe any tax exemptions that are available and whether they are partial or full. b. Are they dependent on the Social Enterprise utilized using a specific organizational form (e.g., for profit vs. Nonprofit form)? c. Please describe any other key requirements of the available tax exemptions (e.g., restrictions on sources or uses of funds, restrictions on commercial activities, etc.).","There are tax exemptions available for Nonprofits generally, but there are no tax exemptions that are uniquely available for Social Enterprises structured using a for-profit organizational form.\nNonprofits (whether or not Social Enterprise) that do not generate revenue by selling products on the market or performing services for a fee do not file a tax return and tax balance, nor do they have any obligations in terms of corporate income tax. Furthermore, if they generate a profit lower than RSD 400,000, they are exempted from corporate income tax.\n"]
["Are individuals or other organizations able to provide tax deductible donations to for-profit Social Enterprises? If they are, please describe any restrictions applicable to tax deductible donations?","To a taxpayer who is a donor of funds, in accordance with the Law on Corporate Income Tax, these expenses are recognized in the Tax Balance up to a certain amount. Expenditures for health, educational, scientific, humanitarian, religious, sports purposes, protection of the environment and benefits made to social protection institutions are recognized as an expense in the aggregate amount of up to 5% of total income.\nIn this case, these expenses are recognized only if they are incurred to entities established and registered for these purposes and they must be exclusively used for the performance of the stated activities.\nThe main reason for limiting the recognition of these expenses is to prevent taxpayers from reducing taxable profits with unrealistically high or unnecessary expenses. If expenses happen to be greater than 5% of total income in a given year, the difference is not recognized as an expense in the tax balance. Taxable profit is increased by that amount.\n"]
["Are there any other tax benefits uniquely available for Social Enterprises? (e.g. deferrals, favorable tax rates, business deductions, etc.)","No, Social Enterprises may use tax exemptions that are available for their chosen organizational forms generally, but do not have available unique tax benefits.\n"]
["Does your jurisdiction provide for reciprocal recognition of tax-exempt status that has been granted under the law of any other jurisdictions?","No.\n"]
["IV. Governmental Infrastructure"]
["Does your jurisdiction have Regulatory Sandboxes or similar policy frameworks for Social Enterprises? If it does, please describe.","Especially aimed at Social Enterprises, no.\n"]
["What government operational support, resources, training or services, are available for small businesses or Social Enterprises?","There are government grants/subsidies and loan guarantees available for small businesses. Also, some have priority when competing for public tenders (such as WISEs). Trainings and educational programs are usually provided at local levels, such as those by the Belgrade Centre for Social Entrepreneurship.\n"]
["Are there different compliance requirements for different types of Social Enterprises than for traditional Enterprises? Please provide examples if there are.","Social Enterprises have all compliance requirements that have their chosen organizational forms, because being “Social” in addition does not require special compliance requirements.\n"]
["Is there a dedicated government agency or department that oversees Social Enterprises? If there is, please describe its mandate and effectiveness.","No, the only central level public entity dealing directly with Social Enterprises is the working group of the Ministry of Labour, Employment, War Veterans and Social Affairs, but it is only drafting the Act on Social Enterprises and not providing direct support. However, the Ministry expressed the intention to establish a permanent team. Until that happens, the most relevant central level actor with regard to Social Enterprises is the Social Inclusion and Poverty Reduction Unit (“\nSIPRU”).\n"]
["Is there a different bankruptcy system available for Social Enterprises?","No.\n"]
["VI. Miscellaneous"]
["What are the average time and filing fees to form an Enterprise in your jurisdiction?","Depending on the current processing times and amount of work, it can take a couple of days to form a legal entity or a couple of weeks: from gathering documentation required and submitting an application to opening a bank account, reporting to the Tax Administration, obtaining a stamp and electronic signature, the fee amounts from EUR 50 up to EUR 100. Certainly, this varies depending on the chosen organizational form.\n"]
["What government or third-party certifications or accreditations, if any, are available for Social Enterprises that allow for access to benefits e.g. funding, beneficial tax status, etc.? Please provide examples and briefly describe them as well as the standards there are to maintain them.","Benefits in Serbia are being awarded through a different system: according to the activities the Enterprises perform, not according to certifications they have. Certifications and accreditations have value for conducting business and for investors who want to make private donations. But, for example, as far as the Tax Administration is concerned, a donation will not be taxed because it is encompassed by the meaning defined in the Law on Corporate Income Tax, not because the Enterprise has or has not a certification/accreditation.\n"]
["Please describe whether, in your opinion, startups and other entrepreneurial Enterprises generally can easily form and flourish in your jurisdiction.","Yes, startups can easily form and flourish in Serbia. They have several Enterprise forms available to choose from, there are relatively few reporting requirements for private businesses and incorporation processes are fast, cheap and simple. Also, numerous alternative financing models are yet emerging in Serbia.\n"]
["Please describe whether, in your opinion, Social Enterprises, in particular, can easily form and flourish in your jurisdiction.","Social Enterprises can form relatively easily due to the founding process being simplified more each year. However, one hard issue many Social Enterprises face is the simple choice of organizational forms, particularly as there is no form that is modified to accommodate Social Enterprises explicitly. As far as flourishing is concerned, a lack of proper care for the sector by the state is present, but there are initiatives for improvement.\n"]
["Please describe whether in your opinion there are any laws that are obstructive to the formation of Social Enterprises (i.e. that actively disfavor or penalize, or otherwise discourage their formation) in your jurisdiction (for example, are Social Enterprises subject to legislation prohibiting inclusion of Social Enterprises in government contract procurement)?","In general corporate forms, directors must use their powers in the best interests of the company and shareholders. While they are not prevented from considering other interests, such as the environment or the larger community, it would be better were they more easily able to consider those interests.\nThe existing legal framework is providing an opportunity for the establishment of Social Enterprises, but it does not apply the term “Social Enterprise” and does not provide for any support measures.\n"]
["In your jurisdiction, are there any major fraud concerns or defects due to corruption or fraud that should be addressed? If there are, please briefly discuss the concerns or defects.","No.\n"]
["What changes to the law do you think would be most beneficial to enabling Social Enterprises to flourish in your jurisdiction?","1. Providing tax benefits to Social Enterprises utilizing for-profit Enterprise forms.\n2. Providing financial support aimed explicitly at Social Enterprises.\n3. Allowing Associations of citizens to be entitled to be Social Enterprises under the scope of the future Act on Social Enterprises (in the current draft, they are excluded).\n4. Making crowdfunding easier, more popular and more accessible to broaden public investment in Social Enterprises, since general public knowledge and confidence in this kind of alternative financing model is low.\n"]
["What changes to the law do you think would be most beneficial to enhancing the social and environmental responsibility of Enterprises generally (whether or not Social Enterprises)?","Implementing a uniform set of standards for ESG policies and reporting of public companies would make it easier for investors and consumers to compare and evaluate which enterprises are in fact doing good in the world, which would drive companies to perform better.\n"]
["Is there anything else you would like to add or guidance you would like to provide? Are there any questions we should have asked but did not?","Partnerships between Social Enterprises and the business sector are also on the rise and provide unused potential. Incentives for the business sector to frequent these collaborations could also be productive.\n"]