50 FAQs about Serbian law

50 FAQs about Serbian law

General overview:

1. Does Serbian law belong to civil law or common law legal systems?

 - Civil law.

2. Who is the lawmaker in Serbia?

 - National Assembly of the Republic of Serbia.

3. What is the official language in Serbia?

 - Serbian language and Cyrillic alphabet.

4. Is it allowed to draft legal documents in English or as bilingual documents?

 - In English is not allowed, but documents may be bilingual.

5. What is the relevance of case law in Serbia?

 - The case law does not constitute a formal source of law in Serbia, although legal opinions presented in Supreme Court of Cassation’s verdicts, effects lower instance courts and contribute harmonization of court practice.

Corporations:

6. What are the main types of companies in Serbia?

 - Legal forms of companies in the Republic of Serbia are: 

1) General partnership (GP); 

2) Limited partnership (LP); 

3) Limited liability company (LLC); 

4) Joint-stock company (JSC).  

7. What is the key characteristic of LLCs in Serbia?

 - Shareholder is not liable for the LLC’s obligations, but only bears the risk of LLC’s business to the amount of its contribution. For undertaken obligations towards third parties LLC is solely responsible with its capital.

8. What are main corporate bodies of LLC?

 - In case single-tier management system, company bodies are: 

1) General Meeting; 

2) One or more directors; 

In case of a two-tier management system, company bodies are: 

1) General Meeting; 

2) Supervisory Board; 

3) One or more directors.

9. How many directors may an LLC have?

 - LLC might have one or more directors. The number of directors shall be determined by the Memorandum of Association or by decision of the shareholders assembly of the company. 

10. Is it allowed for foreign natural and/or legal persons to be owners of Serbian LLC?

 - Yes.

11. Is it allowed for foreigners to be directors of Serbian LLC?

 - Yes.

12. Is it necessary for a director of LLC to be employed in that company?

 - No.

13. Are shareholders agreements allowed in Serbia?

 - Yes.

14. What is the companies’ registry in Serbia?

 - The Business Entities Register under the Serbian Business Registers Agency.

15. How shares are acquired in LLC?

 - Share in LLC are acquired through share transfer agreement. 

16. Is it necessary for the share transfer agreement to be notarized?

 - Yes.

17. How are directors of LLC appointed and dismissed?

 - Director is appointed and dismissed by the Shareholders Assembly or Supervisory Board if a company has a two-tier management system. 

18. Is there an institute of “piercing of corporate veil” in Serbia?

 - Yes.

19. Are there situations when minority shareholders are entitled to require buy-out of their shares?

 - Yes.

20. Are there situations when majority shareholders are entitled to squeeze-out minority shareholders?

 - Yes.

Employment & Labor

21. Are there Trade Unions in Serbia?

 - Yes.

22. What are consequences if particular provisions of an employment contract stipulate less favourable working conditions than the ones established by law and general act?

 - If provisions of an employment contract stipulate less favorable working conditions than the ones established by law and general act, such provisions are void.

23. What is duration of maternity leave in Serbia?

 - Female employees are entitled to (i) maternity leave, and (ii) child nursing leave of a total 365 days for the first and second child and two years for the third and for every consequent child.

24. Do employment contract have to be in writing?

 - The contract of employment must be concluded in writing before an employee commences work.

25. Is employment contract mandatory for establishment of the employment relationship?

 - Yes.

26. What is duration of probation work?

 - The probation work may last for maximum six months. 

27. Is it allowed performing jobs outside employer's premises?

 - Yes.

28. What is maximum allowed overtime work?

 - The overtime work shall not exceed eight hours a week.

29. What is minimum annual leave in Serbia?

 - The length of annual leave is at least 20 days.

30. Is employee entitled to a paid absence from work against compensation of earnings (paid leave)?

 - Yes, but in particular cases defined by the law and/or general act.

31. Is employee entitled to increased salary for overtime work?

 - Yes.

32. Is there minimum salary in Republic of Serbia?

 - Yes.

33. How severance payment is calculated?

 - The amount of severance payment should be determined by the general act or employment contract, and may not be lower than the sum of the third of the employee's earnings for each full year of employment with the employer where he exercises the right to severance pay.

34. Is it possible to stipulate prohibiting competition clause?

 - Yes.

35. Is it possible to terminate labor agreement in case employee breaches a work duty an/or work discipline?

 - Yes.

36. Are there other forms of work engagement?

 - Yes.

Work of foreigners

37. Is it possible to engage foreigner to work in Serbia?

 - Yes.

38. What are conditions for foreigners to work in Serbia?

 - It is necessary for foreigner to have authorization for temporary stay or permanent residence and work permit.

39. Are conditions of employment of EU citizens simplified?

 - Yes.

Contracts & Torts

40. Is it necessary to have written contract?

 - No, except for contracts for which the law prescribes the written form.

41. What are the statute of limitations for mutual claims between legal entities of the contract of trade in goods and services?

 - 3 years.

42. Does an offer have to be in writing?

 - No, except if it relates to a contract for which the law prescribes the written form.

43. What is sanction for lack of necessary form?

 - The contract has no legal effect, unless required otherwise by the purpose of the regulation which prescribes a form.

44. When contact is deemed as void?

 - A contract contrary to mandatory regulations, public policy or good faith.

45. When contract is deemed as rescindable?

 - A contract shall be rescindable after being concluded by a party having a limited business capacity, in case will deficiencies, or if stipulated by law.

Competition / Antitrust

46. Who is/are the relevant merger authority?

 - The authority with competence over merger control in Serbia is the Commission for the Protection of Competition.

47. What is relevant market?

 - The relevant market is a market that includes the relevant product market in the relevant geographic market.

48. What are restrictive agreements?

 - Restrictive agreements are agreements entered between undertakings which as their purpose or effect have a significant restriction, distortion or prevention of competition in the territory of the Republic of Serbia.

49. Is it possible to obtain individual exemption?

 - Yes.

50. Does Serbian law recognize block exemption?

 - Yes.

51. What are agreements of minor importance?

 - Agreements of minor importance are agreements between undertakings whose total market share in the relevant market of products and services on the territory of the Republic of Serbia, do not exceed:

1)10% of market share, if the parties operate at the same level of production and distribution chain (horizontal agreements);

2)15% of market share, if the parties operate at the different level of production and distribution chain (vertical agreements);

3)10% of market share, if the agreement has characteristics of both horizontal and vertical agreements, or where is difficult to determine whether the agreement is vertical or horizontal;

4)30% of market share, if the agreements concluded between various participants have a similar impact on the market, and if the individual

market share of each participant does not exceed 5% threshold in each individual market where the effects of the agreement are manifested.

52. What is legal presumption for dominant position on relevant market?

 - Dominant position on relevant market exists if market participant has market share in the relevant market to 40% or more.

53. Is dominant position per se prohibited?

 - No.

54. Is it allowed unannounced inspection (down raid)?

 - Yes.

55. When concentration requires approval from relevant state authorities?

 - It is necessary to have merger approval in the following situations:

1)when total annual revenue of all concentration participants generated on the international market in the preceding financial year exceeds 100 million EUR, provided that at least one concentration participant revenue generated on the market of the Republic of Serbia exceeds ten million EUR;

2)when total annual revenue of at least two concentration participants generated on the market of the Republic of Serbia exceeds 20 million EUR in the preceding financial year, provided that at least two concentration participants generated revenue on the market of the Republic of Serbia exceeds one million EUR per participant, in the same period.

56. What is the amount of pecuniary sanction in case of breach of competition law?

 - Obligation to pay a monetary sum in the amount up to 10% of the total annual revenue generated on the territory of the Republic of Serbia.

Dispute resolution

57. What is role of parties and the court in judicial proceedings?

 - Parties has to carry out the burden of proving necessary facts whereas court only conduct proceeding.

58. Are foreigners allowed to bring a lawsuit for protection of its rights?

 - Yes.

59. Is it possible to use appeal in court disputes?

 - Against all decision rendered in the first instance verdict except otherwise is proscribe by the law.

60. Is it possible to use extraordinary remedies?

 - Yes, against the final decision.

61. Is it court protection allowed against administrative act?

 - Yes.

62. Are there specialist courts for antitrust damage cases?

 - There are no specialised courts for antitrust damage cases.

63. Who is entitled to bring a lawsuit for breach of competition law?

 - Any person (natural or legal) is entitled and may claim compensation for the damages caused by competition infringement by bringing the lawsuit against the alleged offender.

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