Rent a Serbian Company!
If you keep your finger on the pulse of the current events in the business landscape, you must have noted a tendency to make use of umbrella companies – that is, entities that can be rented. This possibility will be especially appealing to e-commerce businesses, IT specialists, global business advisors, and all kinds of digital nomads. In this post, we will take a look at the way to use the services of an umbrella company to carry out your operations in Serbia, a destination known for its business-friendly environment and beneficial laws. You can follow the link to discuss the possibility with an expert at no charge.
Umbrella Company in a Nutshell
If your business activity is limited to several operations a month, there is nothing better than an umbrella company to meet your needs, and many advanced countries have been using this idea for some time now (for instance, 14% of UK advisors are working like that). The concept is referred to as an umbrella company, rent-a-company, and re-invoicing.
Let’s look at some benefits of the rented service:
- You pay nothing unless you use the appropriate services
- You will not be liable for stable overheads charged on a monthly basis
- The red tape is reduced to a minimum
- You pay less taxes as all payments where taxes are deducted are made to suppliers.
When you decide to rent a company, it means that a third person will deal with its management. As a result, you spare the effort of caring about insurance, adhering to employment regulations, social deductions, fiscal revenues, keeping records, or drawing up invoices. You simply send one email if you want your Serbian partner to draw up an invoice for your customers.
Easy Banking with a Serbian Umbrella Company
The fact that a rent-a-company will deal with all the financial issues for you may be its biggest advantage in some cases. You don’t have the trouble of setting up or maintaining one or several accounts (and visit Serbia for that purpose). The fiscal reporting is also done by someone else. You simply say what accounts (and what currencies) you need for your business activities, and you immediately get access to what you need or wait a little for the required account to be created.
Taking advantage of an umbrella service implies that you can draw up invoices on behalf of a well-established company that boasts a full-fledged economic presence in a respectable state. Your customer pays the invoice to the respective company, and it makes sure that the money is charged to your card or account. All these activities are carried out according to the agreement you conclude.
Foreign e-commerce entities, digital nomads, small-scale IT companies, and freelance consultants find the umbrella company concept increasingly appealing as the requirements related to economic substance are becoming more and more stringent. This service means that you forget about economic substance.
It is not free, of course. The most widespread method of fee payment in Serbia is the share of turnover, but a stable monthly fee is also charged sometimes.
Serbian “Umbrellas”: Peculiarities
Why opt for Serbia? Well, its umbrella companies have their benefits and drawbacks as compared to other jurisdictions, and we can take a look at them just to make an informed choice. Your business model may be perfectly good for Serbian rent-a-companies – or it may not.
First of all, there are no particular laws in Serbia that regulate umbrella entities. They operate as any other run-of-the-mill business that sells services and uses subcontractors who provide them.
Since Serbia is about to become an EU member, its VAT system is pretty much the same as the one used in EU states. However, Serbia is not yet a European Union single market participant, so the services exported from the country are out of the scope. It practically means that if you are not a Serbian resident and you draw up invoices for services rendered in a country other than Serbia to overseas entities via a local umbrella company, you will not need to pay VAT.
Serbia is a reputed destination: it is whitelisted as it is not considered a fiscal paradise though the taxes are quite low here as compared to other European countries. It means that there will be no difficulties with money transfers from the USA, the European Union, and so on. Serbian banks make payments quickly and seamlessly. There is a wide range of currencies to choose from.
If you work with the Russian Federation, Serbia is a great option. It has not implemented any sanctions on the country and it continues to make and get money transfers from it. Russia is a substantial commercial partner for Serbia. However, make sure to adhere to the laws in the country of your residence as they may impose restrictions on dealing with Russia, so even interaction through an umbrella company may be out of the law.
An important drawback of the umbrella company is that it is not possible to keep long-term assets in it. It practically means that no machinery, real property, or cars can be held in your name. This is the main reason why ‘umbrellas’ are successfully used by those who provide services but are not a good option for production. Selling physical goods is not an appropriate area for rent-a-company, either, though exceptions do exist.
Serbian Umbrella Company: Expenses
In fact, it is practically impossible to say how much the service will cost as each situation varies. The Serbian entity does not set a fixed fee and you usually have to agree on some kind of win-win strategy instead. The final fee should be affordable for you, and it should cover the hassle of interaction with Serbian banking institutions and tax authorities.
If you want a rule of thumb, agree on about 10% of the amount billed. The sum may depend on different factors, of course, including the total turnover, the number of operations, the hassle involved, etc.
Interested in benefiting from a Serbian umbrella service? You can follow the above link to discover it in greater detail or talk to an expert.
