Businesses are always looking for ways to maximize profits, and Serbia can offer cost savings while maintaining service quality. The IT sector has been actively studying Serbia as an outsourcing destination for several years. More and more international companies are choosing the country for office openings and hiring employees.
There are a number of solid reasons why foreign companies are choosing outsourcing in Serbia.
Outsourcing in Serbia: low costs and economic efficiency
Serbia has one of the lowest labor costs in Europe, making it an ideal location for outsourcing. Workers in Serbia earn significantly lower salaries than in other European countries, but they possess a high level of qualification and proficiency in English.
Serbia provides tax incentives and other benefits to foreign companies that choose outsourcing to the country. This significantly reduces business process costs and increases company profitability.
The country operates under the IP-Box regime, which allows for a reduction in the tax on profits derived from software developed in Serbia from 15% to 3%. All R&D expenses, which are also subject to outsourcing, decrease the amount of the company’s corporate tax. Moreover, these expenses are counted twice!
Starting in 2022, Serbia has reduced personal income tax and social security contributions by 70% for a period of three years for citizens earning above the average wage in the country. Foreign workers who earn three times the average wage in Serbia can also reduce their taxes and contributions by 70% for five years, with the benefit being available for three years.
Employee shares are taxed on capital gains only at the time of sale. Startup founders in Serbia are exempt from paying taxes on their wages and contributions for the first three years.
Overall, Serbia offers affordable prices for outsourcing services, allowing companies to significantly reduce their IT support and software development costs without compromising on service quality.
Serbia also boasts one of the lowest electricity prices in Europe. Although, in the last two years, the prices of renting apartments and offices in the country have increased, they remain at a reasonable level. Outsourcing IT projects in Serbia is still financially advantageous.
Find out what taxes companies need to pay in Serbia.
Experienced specialists for your company in Serbia
Serbia has many highly qualified IT professionals. Serbian software development companies have experience working with large international corporations such as Microsoft, Intel, and others.
Currently, Serbia is facing a shortage of local experts, but the situation is constantly improving due to the development of education and the influx of foreign workers, including qualified professionals.
High level of education in Serbia
Serbia offers a high level of education and scientific research. The country has numerous universities that produce qualified professionals in various fields, including information technology, marketing, accounting, and law. Companies that choose outsourcing in Serbia can hire graduates from Belgrade and Novi Sad universities.
The country’s authorities are investing significant funds in technical specialties as well as in IT infrastructure.
Convenient geographic location and time zone
Serbia is located in the central part of Europe, which provides convenient access from various regions of the continent and fast communication between client companies and Serbian specialists.
Additionally, Serbia is in the same time zone as most European countries, which simplifies interaction with teams from other regions. It may be more challenging to work with the US (-6-8 hours) and China (+6 hours), but with India, the time difference is only 4.5 hours, making it possible to coordinate with different outsourcing teams.
Check out our detailed guide on relocation to Serbia.
Economic stability of Serbia
Serbia is an economically stable country with relatively low levels of inflation and unemployment. This provides stability and predictability for companies that choose Serbia for outsourcing.
Furthermore, Serbia’s policy is aimed at peaceful coexistence and creating partnerships with different countries and regions. There are more than 60 agreements to avoid double taxation, which allows for building an outsourcing company system.
Foreign investors are offered incentives and legal protection. International companies invest billions of euros in the country’s economy. The leaders are the EU, China, and the US.
English proficiency
English language proficiency is crucial for outsourcing. Many Serbians, particularly those in IT-related fields, have a good understanding of English and can communicate effectively in the language. English language education begins in elementary school in Serbia, enabling employees hired by outsourcing companies in Serbia to interact with other teams and head offices quickly and easily. After all, English is an international language, particularly in the software industry.
How to open a company in Serbia for outsourcing?
It is recommended to register a limited liability company (LLC or d.o.o.) in Serbia for outsourcing purposes. The company’s share capital must be at least 1 euro, and foreign nationals may own it. A minimum of one director is required (foreign nationals are also allowed).
The standard corporate tax rate for companies in Serbia is 15%. The company must have a registered legal address in the country, and a virtual office is also allowed.
Registration of an outsourcing company in Serbia can be done remotely by power of attorney or with a personal visit (requiring a minimum of 3 working days).
Here are some of our popular business services in Serbia:
- Open a Company with a Bank Account in Serbia Remotely
- Set Up a Company in the Serbian Free Zone and Save 20% on VAT
- Registration of an Association in Serbia to Protect your Assets
- Registration of a Serbian Branch for English and Scottish companies
- Buy a Ready-to-Use Company in Serbia with an Open Bank Account
Learn more about registering an outsourcing company in Serbia through a personal consultation with our experts. To do this, please send your request to the email address: info@offshore-pro.info.
