For individuals considering business activity in Serbia, this overview focuses on the availability and main conditions of the Preduzetnik (Sole Proprietor) status as of 2025, summarizing registration, taxation, and compliance requirements.
Overview: Preduzetnik Status in Serbia
The Preduzetnik (Sole Proprietor) arrangement is fully available in Serbia and is widely used by local residents looking to operate as individuals without the overhead of establishing a separate corporate entity. The structure is particularly popular among freelancers, consultants, and small business owners seeking a simplified administrative and taxation framework.
Key Features of Preduzetnik Status
- Legal Form: No separate legal entity; the individual and business are legally the same person.
- Eligibility: Available to Serbian citizens (and certain foreigners meeting legal requirements).
- Personal Liability: The individual is personally liable for all business obligations.
- Registration Authority: Serbian Business Registers Agency (APR).
- Flexibility: Choice between two main taxation regimes.
Taxation Options for Preduzetniks in 2025
Individuals registered as Preduzetnik can choose between two main taxation models, each with its own reporting requirements and cost implications.
| Taxation Model | Description | Tax Basis | Typical Tax (RSD/month) | Typical Tax (USD/month) (@115 RSD/USD) |
|---|---|---|---|---|
| Self-Taxation | Taxed on actual income minus actual expenses | Net profit | Variable | Variable |
| Lump-Sum Taxation (Paušalno) | Simplified regime, fixed tax assessed by authority | Activity, location, other factors | RSD 12,000 – 30,000 | $105 – $260 |
The rate for lump-sum taxation, which is attractive for freelancers and most small businesses, is set by the authorities and depends on several factors, notably the type of business and locality. As of 2025, the standard range is RSD 12,000 to 30,000 per month ($105 – $260/month at an assumed exchange rate of 115 RSD/USD).
Social Security Contributions
Regardless of the chosen taxation regime, all Preduzetniks must pay mandatory social security contributions covering pension, health insurance, and unemployment benefits. These contributions are calculated separately from the core business tax and are compulsory under Serbian law.
Registration and Compliance Process
Setting up as a Preduzetnik in Serbia involves registration with the Serbian Business Registers Agency (APR). The process is streamlined and designed to accommodate both first-time entrepreneurs and established professionals seeking flexibility.
- Submission of an application to APR with required identification documents
- Selection of desired taxation regime (self-taxation or lump-sum)
- Automatic enrollment for mandatory social security contributions
- Authority determination of lump-sum tax (if chosen)
The lump-sum tax regime remains highly popular for those seeking minimal bookkeeping and predictable costs, while the self-taxation model can be more advantageous for those with higher deductible expenses.
Liability and Business Obligations
Unlike limited liability companies, the Preduzetnik structure does not protect personal assets from business debts. The individual is personally responsible for all business-related obligations, which can be both a flexibility advantage (less complex setup) and a risk (full personal liability) to consider when selecting this business form.
Official Sources
Pro Tips for Preduzetniks in Serbia
- Research both taxation models before registration—lump-sum is easier administratively, but actual savings depend on your business profile.
- If your expenses are substantial and well documented, self-taxation may yield lower overall tax compared to the fixed lump-sum approach.
- Stay diligent with social security payments; lapses can impact your pension and health coverage in Serbia.
- Consider consulting with a local accountant before finalizing your taxation choice. Tax regime changes after registration are restricted and can involve additional formalities.
The Preduzetnik structure in Serbia is accessible, widely utilized, and offers valuable flexibility for solo entrepreneurs and freelancers. Mandatory social security and potential personal liability are important elements to account for in advance. The choice between lump-sum and self-taxation regimes shapes not only your administrative workload but also your effective tax rate, so evaluating your annual turnover and likely expenses up front is essential.