Online entrepreneurs sometimes have difficulty completing a transaction when they work with foreign companies. This process may be streamlined by creating a legal entity and opening a bank account abroad, but this sometimes turns out to be unprofitable. An umbrella company (or rent-a-company) in Serbia is a good way out! It will be your intermediary when it comes to the issuance and payment of invoices: this will be done on its behalf. This is a great opportunity for IT, e-commerce, or consulting companies that do not want to relocate but wish to seamlessly deal with counterparties from across the globe.
Would you like to know more about the service? That’s where our portal will come in useful! Read a more detailed article on renting a company in Serbia and discover our knowledge base on Serbia. We write about different destinations and focus on international business, corporate/personal banking services across the world, asset protection, tax optimization, citizenship by investment, and so on. You can book a free session with our specialist to discuss the issues of your business and get professional advice (use the live chat on our portal during business hours or the contacts on top of the portal page). We will help you set up a company, open an account, or streamline any processes at a reasonable fee!
Rent-a-Company: Overview
Rent-a-Company is a legal entity set up in Serbia that is in no way associated with the foreign entrepreneur who wishes to use its services. It sends invoices to foreign counterparties, pays for the services rendered, and receives payments. You simply rent this opportunity to avoid the necessity of incorporating a legal entity abroad, and you will not be engaged in the transaction in any way. If you have any banking issues, they will be successfully resolved!
All you need to do is pay for the rental service, and the umbrella company will pay your taxes, keep the books for you, or act on your behalf.
Serbia: How It Works
Let’s take a look at an example to better understand how the whole thing works.
Your company finds a customer abroad (in France, Canada, Grenada, or any other jurisdiction) and wants to provide services to it. You will need to complete transactions and draw up invoices, which requires having a legal entity abroad and recording the transactions in the books you keep in the country of your tax residence. If this looks like a good option for you, there is no need for an umbrella company. However, renting a company proves to be more cost-effective in most cases: why bother with the incorporation of a legal entity abroad just to make a few contracts every month?
Here are the steps that will help you resolve business planning/banking issues by renting a Serbian umbrella company:
- You rent an umbrella company in Serbia by concluding a contract with its founder. From this moment on, all the documents that you sign will bear the name of the Serbian company.
- The company you rented sends invoices to your counterparties abroad and accepts the fee for the services you render using its account.
- The profit is distributed in the way set out in the contract: you receive the remuneration for the services you provide, while the umbrella company owner receives its commission for the service.
- Should any administrative or related issues arise (with regard to bookkeeping, taxation, banking, reporting, etc.), the umbrella company will resolve them for you
- You will need to make an agreement with your Serbian “landlord” as an individual or a legal entity to get your money by issuing invoices. You can choose any suitable currency for payments, and the money can be transferred to any designated bank (e-wallets or payment systems are fine, too).
This is a very convenient scheme for entrepreneurs who need to complete several transactions a month. However, it is not suitable for import/export activities, trade, financial services, banking, or investments. IT/consulting companies and freelance workers will draw the most benefit from this opportunity.
Rent-a-Company: Advantages
Let’s look at the main benefits of using an umbrella company in Serbia:
- You will not have any VAT obligations
- You will not have to set up a company abroad
- The umbrella company will resolve all possible banking issues, including sending invoices to subcontractors, bookkeeping, creating bank accounts, or providing reports to tax/regulatory authorities
- Payments under the invoices are made in accordance with the agreement signed with the umbrella company owner.
General Principles of Banking Via an Umbrella Company
Here is an overview of the banking procedures for those who use the services of a Serbian umbrella company:
The Rent-a-Company will do the following:
- Transfer money to the designated account
- Send invoices to your counterparties abroad on your behalf
- Receive funds from them as a fee for the services you render
Steps required to receive the remuneration for your services via the umbrella company:
- Open a personal/corporate account with any bank
- Sign a contract with the umbrella company
- Draw up an invoice for the Serbian company
- Receive your fee
- Take care of all the taxes payable under the laws of the country of your tax residence for each transaction you make
And here is what you need to do if you have to pay invoices:
- The umbrella company collects the invoices and charges the required amount to its correspondent account, and it remains there until the time to distribute profits comes.
- It concludes an agreement with a company abroad that provides the services and draws up an invoice for you.
- The funds you receive from the counterparty are first of all used to settle the invoices for the services rendered to you, and the remaining sum is transferred to your account.
Umbrella Company Benefits for Banking Operations
Let’s take a look at the main advantages:
- The services provided outside Serbia are not subject to VAT.
- Serbia’s business reputation is high, which will help you expand the network of partners.
- The country’s banking sector works seamlessly, which adds to its attractiveness.
- Serbia keeps friendly relations with all major states.
Interested in using the services of a Serbian umbrella company? Please click on the link above to read more or get in touch with our expert to discuss the details and make sure this solution will be beneficial for your business.
