Serbian Endowment: Your Reliable Instrument for Assets Protection

All those interested in assets protection have heard of a trust – a classic tool that allows you to own assets without being legally associated with them. However, the adoption of new international laws made the trust a less attractive instrument of capital and interests protection, and wealth owners are looking for new paths toward more safety and anonymity.

Under Serbian laws, you cannot establish a trust and engage a trustee to manage your assets. However, Serbia’s legal framework provides extended powers to the organizers of Foundations instead. And this is a secret weapon that few people know about: you can register a full-fledged trust structure in Serbia called Endowment (Private Foundation). Endowments are widely known as public entities, but you can actually set them up for personal purposes.

Foundation in Serbia
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Get advice and professional assistance in registering a Serbian Private Foundation (trust) by contacting the experts of our international portal.

Serbian Private Foundation (Endowment)

The Private Foundation (Endowment) is a European analog of a trust (formed under the Anglo-Saxon legal system), and it is widely used in Serbia for public and private assets management. The public/state form of the Foundation is familiar to many investors and does not give the right to personal property protection. But if you form a non-profit structure like a Private Endowment, you can take advantage of the following opportunities:

  • high level of confidentiality
  • protection of the investor’s assets in any financial/in-kind form
  • separation of the individual’s capital from its owner, thus ensuring the separation of assets and making them immune to encroachment from the outside (on behalf of relatives, heirs, creditors, law enforcement agencies, etc.)
  • access to capital without an intermediary (trustee)

Private storage of money and property using a Serbian Endowment remains the best instrument that protects the financial and non-financial interests of rich people. At the same time, the Foundation is much superior to the classical trust in terms of its reliability, security, and level of confidentiality that beneficiaries can enjoy.

Reference: the world’s legal efforts are focused on the disclosure of information on all owners of the property and financial values, including the data on trust management and bank accounts opened for such owners. This virtually eliminates the confidentiality and reliable protection of private investors’ interests. Fortunately, we have a more stable non-profit structure that can replace trusts – a Private Foundation in Serbia.

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Serbian Endowment vs Classic Trust – Which is Better?

What is the difference between a classic trust and a Serbian Endowment that is similar to a trust structure? The main feature of the Serbian Endowment is the separation of owner and capital from a legal point of view, as well as the management of own assets.

Here are the advantages of the Serbian trust as opposed to the classical version under the Anglo-Saxon legal system:

1) The Serbian trust (Endowment) allows the owner to directly manage his capital, which is done by a trustee in a classic trust. This advantage predetermines additional benefits of the Serbian Private Foundation:

  • you do not have to pay a fee for the trustee’s services
  • there are no restrictions on the use of own assets

2) A classic trust does not provide confidentiality for the settlor when opening a bank account or managing the trust structure. Serbia’s legal framework is more favorable at this point and allows for better protection of the bank account holder’s personal data (even if it is a non-resident of Serbia), as well as for the disposal of capital at his discretion.

3) A Foundation in Serbia can be established by foreign persons and Serbian residents, which may include commercial or non-profit organizations, and private investors – non-residents of the Serbian State. The minimum amount (value) of fixed assets required to establish a Serbian Trust is 30,000 euros.

4) The tax on donations and income in the Serbian Foundations amounts to zero or is charged according to the following rules:

  • a) No corporate tax shall be levied if the Endowment has received grants, donations, membership fees, and non-economic income. 
  • b) Property tax in the Serbian Foundations/Trusts shall not be levied on gifts in kind (non-financial assets) if their transfer is subject to VAT (foreign grants and donations to foundations are not subject to VAT in Serbia).
  • c) Up to 400,000 Serbian dinars (RSD) from related economic activities are exempt from tax in Serbian trusts.
  • d) As far as all other incoming transactions are concerned, the Foundation pays a gift tax of 2.5 percent.

5) The Serbian Endowment (trust) does not provide for the presence of beneficiaries in the structure, which is enshrined in the legislation of the Balkan jurisdiction. The information about the manager or trustee (these positions can be held by the investor or the nominee) is transferred to the register. 

6) The settlors of associations and foundations in Serbia are prohibited from having property interests in the organization and they cannot claim any part of donations in a non-profit organization under the Law. It is this rule that ensures the reliability of capital storage and protection from external encroachment, including from relatives (successors), judicial authorities, business partners, and credit organizations.

Note: in the case of voluntary dissolution of a Private Foundation in Serbia, the assets are distributed among investors according to an agreed algorithm.

How to Establish a Trust in Serbia: Non-Resident’s Experience

The general principle of registering an Endowment (Trust) in Serbia on behalf of a foreign founder is to study the legislative framework, transfer documents, lease a legal/postal address and open a bank account. Experienced investors usually do not bother themselves with legal/administrative issues related to the formation of a non-profit organization and seek the help of competent specialists, like the International Wealth team.

We offer:

  • Registration of a Serbian trust with full preparation of documents and legal address of the non-profit organization.
  • Opening a bank account when the endowment is established by an individual or a foreign company in Serbia.
  • Resolving all issues related to the public authorities of the Republic of Serbia and third parties throughout the trust’s existence.
  • Professional consulting on any issues related to Serbian trusts that aim to protect the interests of clients and find the best form of cooperation, including optimizing the costs of maintaining a Serbian trust.
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The experts of our portal offer a full range of services for the Endowment (Trust) registration in Serbia on a turnkey basis. Write to us using the contacts indicated on the portal or contact an online consultant to discuss all the details and any additional services you may need.

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