Commercial relations between the Russian Federation and the Republic of Serbia in 2022
Author: Attorneys-at-Law from the Law Firm “VUK Tax Attorneys”
Date: 9th May 2022
Since the Republic of Serbia did not impose economic sanctions against the Russian Federation, business operations between these states continues without disturbances, in accordance with the good business and political relations. Within last few months, over 300 companies and entrepreneurs have been registered in the Republic of Serbia by founders from the Russian Federation, which confirms that the Republic of Serbia represents one of rare, if not the only state in Europe that can offer adequate working conditions to the citizens and companies from the Russian Federation. Concerned number of registered entities makes around 25% of total number of all active legal entities with founders from the Russian Federation. Also, more than half of newly founded companies/entrepreneurs are registered for performing activities of computer programming. Additionally, there has been an abrupt increase of opening of non-resident bank accounts in Serbian business banks by citizens of the Russian Federation, on which cash can be transferred in the amount of EUR 10,000, without obligation of filing a proof on money origin. One of the reasons for this expansion of commercial activities by citizens of the Russian Federation is that the Republic of Serbia can perform transactions within international payment system SWIFT without any disturbances. Free trade of goods in preferential treatment between the Republic of Serbia and the Russian Federation is performed based on bilateral Free Trade Agreement that is in force since 19th May 2001, as well as based on Free Trade Agreement concluded with the Eurasian Economic Union, that consists of Belarus, Armenia, Kazakhstan, Kyrgyz Republic and Russian Federation. On the other side, between the Republic of Serbia and European Union there is Free Trade Agreement in force since 1st September 2013, which in total represents a very efficient and comprehensive legal framework for international trade of goods in preferential regime on concerned markets. Additionally, Contract on Avoidance of Double Taxation Regarding Income Taxes and Property Taxes is in force since 1st January 1998 between the Republic of Serbia and the Russian Federation, providing numerous tax benefits for business transactions performed between the Russian Federation and the Republic of Serbia. Potential velocity of change of flows in the coming period obligates us to closely monitor developments related to the position and business conduct of citizens and legal entities of the Russian Federation in the Republic of Serbia.