Non-resident director of a company in Serbia

June 5, 20230

Non-residents, foreign nationals, can establish an employment relationship with both their own company in the Republic of Serbia, and in other companies. The employment of directors as non-resident natural persons is the same as for other foreigners, i.e. it is regulated by the Law on Employment of Foreign Citizens.


  Obtaining the work permit is a basic requirement for a non-resident, in order for them to establish an employment relationship. According to the Labour Law, two types of contracts can be concluded with the company director, which will serve as the foundation for the employment of the foreign director. This possibility allows for hiring a legal representative whether the director is a domestic person (i.e. a resident) or a foreigner (non-resident)

– the Employment Contract – hiring a director by establishing an employment relationship in the company,

– the Contract on the Rights and Obligations of Directors – hiring a director without establishing an employment relationship.

Every legal entity must have a director as a legal representative. The director’s remuneration can be determined on an annual or monthly basis.

Obligations of a non-resident director in an employment relationship, as well as a non-resident director hired on the basis of the Contract on the Rights and Obligations of Directors, entail the payment of taxes and contributions, namely:

– the individual income tax

– contributions for the mandatory social insurance

                           Director who established an employment relationship

A non-resident director can establish an employment relationship with a company in which they will be hired as a director. In this case, a director concludes an Employment Contract with the Employer (the most common scenario is the company in which they appear as a founder, as well), and becomes an employee with the right to salary, reimbursement of expenses, annual leave, sick leave, and other rights and obligations like the other employees. The Employer is obliged, as well, to calculate and pay monthly taxes and contributions for them. Registration with the Central Register of the Mandatory Social Insurance is also required.

In this case, there is no possibility of implementing the Agreement on Social Insurance and the Double Taxation Avoidance Agreement. The concluded Agreement on Social Insurance with the specific country is not taken into account, while the salary earned in Serbia from a domestic employer (regardless of the fact that the founder is a non-resident natural person) is taxed in Serbia.

                           Director on the basis of a contract outside the employment relationship

A non-resident director is not obliged to establish an employment relationship with the company that they will represent as a legal representative, i.e. the director. They can conclude the Contract on Rights and Obligations of the Directors with the company, which is interpreted as a contract outside the employment relationship.

This type of a contract does not constitute an Employment Contract. This means that upon the signing of the contract, the director does not establish an employment relationship and does not acquire the status of an employee. Also, the registration with the Central Register of the Compulsory Social Insurance is not required. The director only represents the legal entity, and on the basis of this contract has the right to the remuneration.

The Employer is obliged to calculate and pay taxes and contributions for them. The director hired without an employment relationship is obliged to pay contributions for social insurance, unless they are insured in Serbia on another basis. If they are, then the only contribution to be paid is the Pension and Disability Insurance (Serbian: PIO). Taxes and contributions calculated in this way are charged to the company as an expenditure.

The Contract on Rights and Obligations of the Directors is a contract by which a director is hired to carry out managerial duties. For this reason, it is called the Managerial Contract or the Director’s Employment Contract.

                           Creative finance is a company focused on helping all domestic and foreign individuals, who wish to operate or already operate on the territory of Serbia; therefore, we are available to answer any questions you may have.


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