If you are looking for strong protection for your assets, we have one solution: a Charitable Foundation in Serbia. Helping clients set these up is one of our services. This type of foundation is commonly known as an “endowment.”
This kind of structure is particularly useful for asset distribution and can help shield certain portions of the owner’s property from divorce proceedings, legal disputes, or other claims. Meanwhile, the owner retains full authority and control over the assets, which may include real estate, business holdings, intellectual property, and financial capital.
Let’s explore in detail the advantages of Serbian Private Charitable Foundations. Learn about the legal aspects and local requirements for establishing and operating such foundations in Serbia.
What is a Private Charitable Foundation and Its Purpose
Establishing a Private Charitable Foundation in Serbia offers asset protection by effectively separating these assets from the owner’s personal property, as the foundation’s founders, whether individuals or legal entities, do not gain the status of beneficiaries. This is what distinguishes Serbian foundations from similar structures in other countries, where founders act as beneficiaries and are, therefore, subject to control measures and disclosure requirements.
According to Serbian law, a Private Charitable Foundation is recognized as a legal entity. The founder transfers assets to the foundation, which must be used to achieve the objectives outlined in the foundation’s charter. These objectives can be either charitable or personal.
Serbian banks readily work with Private Charitable Foundations, permitting them to open accounts and access a full range of services. For financial institutions, the designated beneficiary is the foundation’s manager, not the founders. This setup minimizes legal risks, as the foundation’s assets are distinct from those of the founders, with all transactions managed solely by the appointed manager.
The foundation is allowed to engage in any legal activities, including owning other companies. This feature makes it attractive for creating holding structures. The founders retain influence over the assets, as they can control the manager and replace them if necessary. Assets transferred to the foundation are no longer considered the founder’s property and are protected from claims, similar to a trust. However, too much direct control can weaken this protection, so it’s essential to maintain a balance between management and the foundation’s legal independence.
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Check the list of required documents, and get the details of the process, terms, and costs.
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Advantages of Establishing a Private Charitable Foundation in Serbia:
- The ability to protect confidentiality while maintaining control
- Low regulatory maintenance costs
- Quick processes for foundation registration and opening a bank account
- The ability to create a commercial holding or targeted fund
- A 2.5% gift tax rate applies to non-commercial income
- The option to register and open a bank account remotely
- The right to close the foundation without incurring financial losses
- Long-term business optimization
A Private Charitable Foundation is a useful financial tool if you are looking to safeguard your assets and minimize the risk of legal complications.
How to Organize a Private Charitable Foundation in Serbia
Organizing a Private Charitable Foundation in Serbia requires careful attention to the country’s rules and regulations. Here are some key facts:
- One or more individuals can establish a foundation
- Both Serbian residents and foreigners have the right to establish a foundation (in compliance with the law)
- Founding documents (a founding act and charter) must be prepared for the foundation’s creation.
Management Structure
The management of the foundation is organized as follows:
- The organizer is the founder. The law allows the founder to be part of the board of directors if this is specified in the organization’s charter.
- The management body is the board of directors, which must consist of at least three people. The founder appoints the chairman and authorized members.
- The controlling body is the nominal manager, who must be an individual with the right to reside in Serbia long-term legally.
Only individuals with the right to permanent or temporary residency in the country are eligible to serve as the foundation’s manager. You can obtain a residence permit on various grounds, including investing in real estate or registering a business. If you do not have a suitable candidate, we can offer nominee management services starting from 4,750 EUR per year.
The Private Charitable Foundation can hold diverse assets, including property, rights, and monetary funds, which should collectively total at least 30,000 EUR (equivalent). Donations, subsidies, interest income, rent, dividends, and other lawful income sources may replenish the foundation’s assets. Still, these additional assets should not exceed the total value of the foundation’s original core assets.
The foundation’s property does not belong to the founders, board members, or beneficiaries, meaning it cannot be claimed in lawsuits or property divisions during divorce proceedings.
The right to participate in the foundation’s management is not transferable by inheritance.
Although the Private Charitable Foundation cannot generate profit, it is required to keep financial records in accordance with the law. VAT is not charged if the person transferring the property is not a VAT payer. When transferring property, the foundation pays a 2.5% gift tax.
List of Required Documents for Foundation Registration
To successfully register a Private Charitable Foundation in Serbia, the following documents must be prepared and submitted:
- Personal information of the founders (both individuals and legal entities)
- A description of the foundation’s goals
- Information about the management
- Details of the individual resident in Serbia who will manage the foundation
- A resolution by the management body regarding the foundation’s creation and the appointment of individuals authorized to sign the founding documents
- Passport copies of the board members and the manager (Serbian resident)
- The foundation’s memorandum
- The organization’s charter
- Completed registration applications
- Additional forms are required post-registration
We provide clients with all necessary forms and templates upon request and assist with document preparation and completion.
Organizational Costs
When organizing a private charitable foundation in Serbia, it’s important to account for associated costs. The total registration cost starts from 18 000 EUR, which includes:
- Registration fee
- Payment for the board of directors’ organization services
- State duties
- Opening a client account in a Serbian bank
- Contributing assets to the foundation – no less than 30,000 EUR
- Translation of certificates and documents – from 60 EUR per page
- Renting a registered address for the foundation – from 350 EUR per month
- The service of a resident manager – from 4,750 EUR per year
If you plan to create a foundation remotely, you will need to issue a power of attorney, costing from 950 EUR.
How to Register a Serbian Private Charitable Foundation
Contact our consultants via email: info@qwealthreport.com.
Specify the purpose of the foundation, who the founder will be, and whether nominee management services are required.
Pay for the organization of the Private Charitable Foundation in Serbia – from 18 000 EUR. Payments are accepted via bank transfer, card, or cryptocurrency.
Provide the necessary documents. Once we receive the full package of documents and payment, we will proceed with organizing the private charitable foundation for personal purposes.
