Efficient Approvals of Temporary Residence to Foreign Citizens Which are Essential to the Domestic Economy

Author: Attorney-at-law Krneta Lj. Marko, Law Firm “VUK Tax Attorneys”

Date: 28th February 2020

In recent years, there has been a noticeable tendency of the presence of foreign citizens in the business environment of the Republic of Serbia. A greater percentage of these foreign citizens, as applying basis for temporary residence, use employment, i.e. ownership over domestic limited liability companies or entrepreneurial agencies, that are registered with the Serbian Business Registries’ Agency.

Serbian Law on Foreign Citizens provides for more than 14 legal bases for temporary residence permit. Although grounds for obtaining temporary residence permit prescribed by this Law are not lacking, Serbian Government, recognizing the potential of investing of foreign citizens in our country (tax revenues, employment, innovative activities and solutions, modern technologies, etc.), adopted the Decree on criteria for determining categories of foreign citizens and categories of foreign citizens to whom temporary residence in the Republic of Serbia can be granted, regardless of the basis for granting temporary residence (hereinafter: the „Decree“), that is in force starting from 22nd February 2020.

Pursuant to the Decree, temporary residence may be granted, except for the reasons stipulated by the Law on Foreign Citizens and accompanying bylaws, on following basis:

  1. Foreign citizen who has established a company in accordance with the regulations of the Republic of Serbia, whose registered activity is confirmed by an appropriate document of the registered science and technology park, as an innovation activity – “start-up”;
  2. Foreign citizen – investor, who invests certain pecuniary or in-kind funds in a company registered in the Republic of Serbia;
  3. Foreign citizen who holds a decision on professional recognition of higher education diploma‚ issued by the competent authority of the Republic of Serbia – “talent”.

When applying for a temporary residence permit for the first time, the Foreign citizen will submit to the Serbian Ministry of Internal Affairs – Foreigners` Department, in addition to the documents stipulated by the Law on Foreign Citizens, and accompanying bylaws (valid personal or business passport, evidence of pecuniary funds during the planned period of stay, registration of residence address in the Republic of Serbia, evidence of health insurance during the planned period of stay, etc.), also the following documents:

  1. in the case of start-ups, a document issued by a registered science and technology park, certifying that the activity of a company founded by a foreign citizen in the Republic of Serbia, is recognized as an innovation activity;
  2. in the case of investment, confirmation or statement of ownership of funds on the non-resident bank account registered in the Republic of Serbia in the amount of at least EUR 50,000, or in equivalent RSD value in RSD or other foreign currency;
  3. in the case of talent, a decision on the professional recognition of a higher education diploma issued by the competent authority of the Republic of Serbia.

In regard to procedure of extending residence permit obtained in accordance with the Decree, foreign citizen will, amongst other, submit the following documents:

  1. in the case of start-ups, the foreign citizen must prove that his company employed at least one Serbian citizen for a period longer than the period for which temporary residence permit is requested, that income of the company was more than RSD 1,000,000, as well as to submit certificate of science and technology park, confirming that the company is still actively engaged in innovation field;
  2. in the case of an investor, evidence that cash contribution has been paid as share capital of registered company in the amount of minimum EUR 5,000, i.e. the equivalent RSD amount or other foreign currency;
  3. in the case of talent, the foreign citizen is obliged to submit employment contract, service contract or other contract proving that his employment in the Republic of Serbia is in accordance with the labour regulations, or evidence on the registration of legal entity in the Republic of Serbia during the approved residence period, of which foreign citizen is one of the founders.

The duration of approved temporary residence is one (1) year in the case of start-ups and talent, and six (6) months in the case of investments.

Although the Decree broadens the possibilities for granting temporary residence to foreign citizens, the conditions provided in Decree are not easy to achieve, so the question is how effective this Decree will be in real life.