Common Mistakes When Starting a Company – and How to Avoid Them

Company formation in Serbia may seem like a straightforward administrative procedure. However, for foreign founders the entire process requires extra care—not only because of legal nuances, but also due to local administrative requirements and the unwritten rules of practice.

Below, we present the most common mistakes foreign investors make when establishing a company in Serbia – along with concrete tips on how to avoid them.

⚠️ 1. Incomplete Understanding of the Company’s Legal Form

Mistake: Many founders randomly choose between establishing an LLC and setting up a branch of a foreign company, without understanding the differences in liability and obligations that come with each option.

How to avoid: Consult with a lawyer an accountant before starting the company formation process..

If you want to operate in Serbia as an independent legal entity — with your own rights and obligations, local bank account, contracts, and full business autonomy — an LLC (Limited Liability Company, or društvo sa ograničenom odgovornošću / DOO) is the most common and most flexible option.

If you want to operate as an “extension” of a foreign company, with the ability to use, for example, the parent company’s references — you can establish a branch of a foreign legal entity.

⚠️ 2. Incorrectly Defined Company Name or Activity Code

Mistake: Choosing a Name That Does Not Meet APR Requirements or an Activity Code That Does Not Match the Actual Business

This can lead to registration rejection, incorrect tax classification, or issues when participating in tenders or meeting licensing requirements — ultimately resulting in unsuccessful company formation.

How to avoid: Check the availability of the company name on the official APR website and consult when choosing the activity code (e.g., whether the business area is services, manufacturing, IT, etc.).

⚠️ 3. Incorrect or incomplete documentation for the Serbian Business Registers Agency (APR).

Mistake: Submitting incomplete documentation, imprecise business activity definitions, failing to register the Ultimate Beneficial Owner (UBO), or providing incorrect information about the legal representative will delay company registration by at least one week.

How to avoid: An experienced partner can prepare everything in compliance with local regulations.

VRB Tim prepares a complete set of documents, including:

• Articles of Incorporation
• Decision on Establishment (for a branch)
• Decision on Establishment (for a branch)
• Tax filings and documentation for archiving

⚠️ 4. Failure to Register in Mandatory Registers: Tax, VAT, Archive

Mistake: Company incorporation has been completed, but the statutory tax filings were not submitted on time, or the mandatory registration with the Historical Archive was omitted.

How to avoid: After or during the company formation process, it is necessary to:

• ✅ Register for corporate income tax (mandatory)
• ✅ Register for VAT (if you plan turnover above the legal threshold or have international transactions)
• ✅ Prepare and adopt documentation for archival operations (legal requirement within 30 days)

⚠️ 5. Opening a bank account without local support

Mistake: Some founders are unable to open a bank account because the documentation is incomplete, not translated, or the bank requires additional information. In addition, when opening an account, they fail to request the opening of all necessary accounts.

How to avoid: Working with a local team familiar with banking procedures in Serbia speeds up the process.

We assist with:

• Selection of the bank (based on fees, speed, language)
• Scheduling appointments and sending documents in advance
• Scheduling appointments and sending documents in advance

⚠️ 6. Ignoring the obligation to keep business books from day one

Mistake: Many founders wait to start operations before hiring a bookkeeper – but the obligation to keep business books starts from the date of company registration, not from the moment invoicing begins.

How to avoid: Engage a bookkeeper who will immediately:

• Complete all necessary registrations (Tax Administration, LPA, etc.)
• Complete all necessary registrations (Tax Administration, LPA, etc.)
• Submit tax returns on time for items such as rent, income of board members, etc.
• Advise on the first expenses you can claim

⚠️ 7. Ignoring the Obligation to Archive Documentation

Mistake: Many business owners are not aware that they are required to obtain approval from the Historical Archives and adopt rules on document retention – within 30 days of establishing the company.

How to avoid: Immediately after company formation, prepare:

• Document Retention (archiving) Policy
• Document Retention Policy
• List of Documentation and Retention Periods
• And submit everything to the Archives for approval

VRB Tim handles the entire procedure with the Archives on your behalf.

⚠️ 8. Poor Choice of Accountant

Mistake: Founders often hire the cheapest accountant “just to get started” and to “cover” the company formation, which later leads to unposted invoices, missed deadlines, and even fines.

How to avoid: From the start, work with an accountant who:

• Knows local laws as well as international standards
• Works digitally
• Communicates in English/Italian
• Understands your needs as a foreign investor

⚠️ 9. Employment Contracts Unexecuted or Poorly Drafted

Mistake: Hiring employees without contracts or with contracts that do not comply with legal obligations (supplementary work, service contracts, probationary periods).

How to avoid: Always properly formalize working relationships. Our team prepares:

• Employment Contracts (fixed-term/permanent)
• Supplementary Work Contracts
• Service contracts
• And handles employee registration/deregistration in the system

✅ How Can VRB Tim Help You?

• Analysis: LLC or branch – which is better for your group?
• Analysis: LLC or branch – which is better for your group?
• Preparation of complete documentation and company registration
• Tax, accounting, and legal support from day one
• Assistance with bank account opening and communication with institutions

📩 Contact us and start your business in Serbia without administrative mistakes and stress.