In mid-June, the Government of the Republic of Serbia passed a Decree on the criteria for granting incentives to employers who employ newly settled persons in the Republic of Serbia (the "Decree"). The decree drafted a new package of incentives for the employment of foreigners in Serbia. This applies to all companies that either employ foreign nationals or intend to do so and want to achieve possible savings.

The Decree determines the conditions for exercising the right to incentives, as well as the procedure provided for the exercise of these benefits.

Benefits provided by the Regulation

The decree stipulates that an employer who realizes the right to incentives will be able to achieve savings of as much as 70% when it comes to the employee's salary tax, i.e. up to 100% reduction of the contribution for obligatory social insurance of the employee.

Employers who can exercise the right

The condition for exercising the right to incentives is the registered performance of activities on the territory of the Republic of Serbia. The following categories of employers will be able to exercise this right:

  • domestic or foreign natural person;
  • legal entity;
  • entrepreneur;
  • Representative office or branch of a foreign employer in the Republic of Serbia.

Which person's employment is a benefit for the employer?

According to the Decree, the right to incentives is exercised by the employer who employs newly settled persons on the territory of the Republic of Serbia. The term newly settled person in the sense of the Decree means a natural person for whom there is a need that cannot be easily met on the domestic labour market who, in the period of 24 months preceding the day of concluding the employment contract did not stay in Serbia for more than 180 days. the employer concluded an employment contract for an indefinite period of time with full-time employment.

Guaranteed salary

The condition is the amount of remuneration for work provided by the Regulation. The newly employed person employed by the employer should be provided with a gross salary of at least 300,000.00 RSD.

How can an eligible employer be entitled to an incentive?

The eligible employer is obliged to submit to the Ministry of Economy an application for the payment of incentives related to the salaries of newly settled persons in the period between 15 and 30 September, whereby the application is submitted for salaries paid in the period preceding the application for a maximum of 12 months.

The application must contain data on the employee, business data of the employer (TIN, IB, etc.), but also the amount of incentives for which the award is requested in accordance with the calculation.

There is also a condition to enclose a written statement of the newly settled employee by which he confirms under criminal and material responsibility that he did not stay in the territory of the Republic of Serbia for more than 180 days in the period of 24 months preceding the day of concluding the employment contract with the employer.

The decision on granting incentives is made by the Ministry of Economy within 120 days from the expiration of the deadline for submission of applications.