Serbia has become a prominent market for company acquisitions and share transfers in the Balkans due to its EU alignment process, affordable labor force, and investment-friendly legislation. However, in practice, acquiring a Serbian company requires much more than just signing and transferring shares: the right structure (share deal / asset deal / restructuring), competition authority approval, mandatory public offers, and an intensive legal-commercial review process.
Company Sale and Share Transfer in Serbia: General Framework
Three main structures stand out in company acquisitions in Serbia:
- Share transfer (share deal)
- Asset transfer (asset deal)
- Corporate restructuring (merger, division, etc.)
In market practice, share deal is the most commonly used. The reason for this is that it allows the acquirer to take over all of the target company’s business, assets, liabilities, and employees in a single transaction. Share transfers in limited liability companies (LLC) are registered by the Serbian Business Registers Agency (BRA), while in joint-stock companies (JSC), it is registered by the Central Securities Depository and Clearing House (CSD).
A significant advantage for foreign investors is the absence of a general foreign direct investment screening (FDI screening) mechanism in Serbia. Foreigners are treated equally to domestic investors and can establish partnerships of up to 100% or acquire existing companies in most sectors.
Which Structure is Suitable for You? Share Deal – Asset Deal – Restructuring
1. Share Deal (Share Transfer) – The Most Common Model
In a share deal, the buyer directly purchases the shares of the company. Thus, the legal entity of the company does not change, only the partnership structure changes.
Advantages:
- You automatically take over the entire business, contracts, licenses, and employees of the company.
- Especially in limited and non-public companies, the transaction structure is simpler and market practice is established.
- Operational disruption is minimal; continuity is ensured from the perspective of customers and suppliers.
Disadvantages:
- You take over all known and unknown existing and future debts, risks of the company.
- In complex group structures, risk segregation can be difficult.
When is it preferred? It is generally the primary method in medium to large-scale companies when the entire business, team, and contracts are intended to be acquired as a whole. It is also the standard route for ready-made company acquisitions.
2. Asset Deal (Asset Sale) – “Cherry Picking” Strategy
In an asset deal, the buyer acquires selected assets of the company (machinery, inventory, brand, IP, real estate, etc.) rather than the company itself.
Advantages:
- You can exclude risky assets and debts that you do not wish to acquire.
- Provides flexibility in terms of tax and balance sheet structuring.
Disadvantages:
- In Serbia, employees do not automatically transfer in an asset deal. It is less efficient compared to EU practices.
- The buyer and seller may assume joint liability for previous debts related to specific assets.
- Separate approvals/registrations may be required for each element such as real estate, IP, licenses, contracts; the number of transactions and administrative burden increases.
When is it preferred? It is suitable when you want to acquire only a specific part of an operation (for example, a production line, brand portfolio) or to pull only “healthy” assets from a company filled with risky debts.
3. Corporate Restructuring – Merger, Division, Partial Division
The Serbian Company Law allows for types of restructuring such as mergers, divisions, and partial divisions. These structures:
- Are typically preferred in intra-group restructurings.
- However, when designed appropriately, can also be an effective tool for external acquisitions.
- Often provide more optimized solutions in terms of tax and financing.
Disadvantage: Corporate restructurings are more complex than share transfers; they often require detailed drafts, notifications to creditors, and more comprehensive authority approvals.
Special Authorities and Regulations
During a company acquisition or share transfer process in Serbia, multiple authorities may come into play depending on the type and sector of the company:
- Business Registers Agency (BRA): Registers share transfers and changes in partnership structure in limited companies.
- Central Securities Depository and Clearing House (CSD): Records share movements in joint-stock companies and public companies, conducts clearing and custody operations.
- Securities Exchange Commission (SEC): Oversees and approves mandatory public offers in joint-stock companies with public or above a certain threshold of shareholders (100+) and capital (over €3 million).
- Commission for Protection of Competition (CPC): The competition authority that examines mergers and acquisitions that qualify as control transfers.
- National Bank of Serbia (NBS): The approval authority for acquisitions of regulated financial institutions such as banks, leasing, and insurance companies.
There is no general pre-approval system for FDI; however, in public markets, notification obligations to the SEC arise when certain thresholds (e.g., 5%, 10%, etc.) are exceeded.
Step by Step Share Transfer in Private Companies
The typical process when acquiring a private company (especially a limited company) in Serbia proceeds as follows:
1. Preliminary Discussions and Letter of Intent
The parties first sign a non-disclosure agreement (NDA), framing the basic commercial terms (price range, payment structure, closing conditions) in a letter of intent (LOI) or non-binding term sheet.
2. Legal, Financial, and Tax Due Diligence
Subsequently, the buyer conducts a multi-dimensional review of the company:
- Legal review: Company contract, shareholder agreements, significant commercial contracts, licenses, litigation and enforcement risks, guarantees.
- Financial review: Quality of balance sheet, cash flows, indebtedness, receivables structure.
- Tax review: VAT, corporate tax, withholding taxes, transfer pricing.
- Operational review: Business model, supply chain, IT, human resources.
- Post-COVID practices: Support and incentives received from the government, compliance with state aid rules.
As a result of this review, guarantee, indemnity, and price adjustment clauses will be shaped to be reflected in the share purchase agreement.
3. Share Purchase Agreement (SPA) and Notary Transactions
The buyer and seller prepare the share purchase and sale agreement (SPA) based on the agreed price, payment schedule, warranties, and conditions precedent.
Then, a notarized share transfer deed is prepared and signed, which is necessary for the legal validity of the share transfer in Serbia.
4. Registration with BRA
Changes in partnership structure for limited companies are registered with the Business Registers Agency. The average registration period typically ranges from 5–15 days.
5. Competition Authority (CPC) and Other Approvals
If the transaction creates control transfer over the company and qualifies as “concentration” under competition law, there may be a notification obligation to the Serbian Commission for Protection of Competition.
- Phase I (summary review): The typical duration is 1 month.
- Phase II (in-depth review): Can extend up to 4 months in case of competition concerns.
In regulated areas such as banking, leasing, and insurance, approval from the National Bank of Serbia may also be required.
Average total closing time: Depending on the complexity of the transaction, the scope of due diligence, and whether authority approvals are required, it is generally around approximately 6 months.
Mandatory Public Offer in Public Companies (Takeover Law)
The acquisition of publicly traded joint-stock companies in Serbia is strictly regulated under the Takeover Law. This law covers companies listed on regulated markets or multilateral trading facilities (MTF).
Thresholds Triggering Mandatory Public Offers
- General Threshold: An investor (or persons acting in concert) is obliged to make a mandatory public offer when they directly or indirectly reach over 25% voting rights.
- Additional Threshold: Each additional 10% voting rights increase after the initial offer (up to 75%) may require a new mandatory offer.
- Final Threshold: Reaching the 75% threshold may create a new mandatory offer obligation, even if the additional acquisition rate remains below 10%.
The concept of acting in concert considers the shares of all parties acting together, even if the shares are distributed among multiple individuals. This is one of the most critical risks for most foreign investors; improper structuring can lead to unexpected mandatory offer obligations.
Timeline and Durations (T Date = Day the Obligation Arises)
- T+2 days: Announcement of intention to acquire shares in the national newspaper and relevant platforms; notification to SEC, CSD, target company, and market operator.
- T+15 days: Submission of offer approval application to the SEC. The SEC’s approval period is typically 10 business days.
- Post-approval: The offer is announced; the consideration is blocked in special accounts as cash or securities.
- Offer period: Typically ranges from 21–45 days; under certain conditions, it can be extended up to 60–70 days.
- End of offer + 3 days: If minimum acceptance conditions are met, share transfers and payments are carried out through CSD.
- After 90% and above ownership: Within 3 months, there is an opportunity to purchase minority shareholders through a squeeze-out mechanism.
Payment method: Cash is predominantly used in the market; however, securities such as shares or bonds can also be used as consideration.
Insider trading is prohibited and subject to criminal penalties. In some cases, the use of voting rights for shares acquired until the approval of the competition authority may be prohibited.
Competition Law Dimension: Merger Control
The transfer of control over a company is considered a concentration under Serbian law. Notification to the CPC is required when certain turnover thresholds are exceeded. However, an important point: if the transaction occurs under a mandatory public offer, notification may be required even if the normal thresholds are not met.
After notification to the CPC:
- The transaction is mostly concluded within 1 month during the preliminary review (Phase I).
- In cases of more complex market effects, the detailed review (Phase II) process can extend up to 4 months.
- In some cases, the CPC may grant exceptions for suspension of voting rights under certain conditions before making a final decision.
“Foreign-to-foreign” transactions that occur abroad but have an impact on the Serbian market may also fall under the notification requirement if they create significant competitive effects in Serbia.
Tax, Cost, and Timing Perspective
Tax Dimension
- Share transfers (share deal): Generally exempt from VAT. However, capital gains of shareholders may be taxed under Serbian tax legislation and double taxation treaties.
- Asset transfers (asset deal): Depending on the nature of the asset, VAT, property transfer taxes, and possible stamp duties may arise.
- Shareholders’ income tax: The Turkey-Serbia double taxation treaty and Serbia’s extensive treaty network can reduce withholding tax rates in many cases.
Cost Items
- Legal, accounting, and financial consulting fees
- Notary fees and translation costs
- BRA and CSD registration/transaction fees
- Application fees for the Competition Authority and sector regulators
Notary and registration processes are typically completed in days, while the main factor extending the actual timeline is often competition approvals and sector regulation approvals.
Risks in Practice and Common Mistakes
- Underestimating the “acting in concert” risk: When acquisitions are made through investor consortiums or group companies, the expectation that shares will be counted among persons acting together can create an unexpected mandatory public offer obligation.
- Inadequate due diligence: Especially when labor, tax, and environmental liabilities are not thoroughly examined, the buyer may face unforeseen debts after a share deal.
- Employee transition in asset deal: The lack of direct application of the EU principle of “automatic transfer of employees with business transfer” in Serbia can lead to operational disruptions and labor law disputes.
- Undervaluing competition authority approval: Delays in merger control approvals abroad can indirectly delay the Serbian CPC decision and disrupt the closing timeline.
How Does Corpenza Add Value in This Process?
Opening to Serbia from Turkey or another country does not end with just acquiring a company. Alongside the company acquisition; residence permits, visas and work permits for managers and key employees, international accounting and payroll processes, intra-group financing structure, and global tax optimization should also be part of the strategy.
As Corpenza in Serbia:
- We plan the legal, financial, and tax due diligence process after identifying the target company,
- We determine the most suitable structure for you (share deal, asset deal, restructuring),
- We plan incorporation, residence permits, and executive relocation simultaneously with the company transfer,
- We create international accounting, payroll, posted worker/EOR setups for your new structure in Serbia,
- We design tax and social security optimization in multi-country investments and group structures
We work in an integrated manner with expert local lawyers and financial advisors. Thus, you can manage not only the company transfer but also all your mobility and structuring needs in Serbia and Europe under one roof.
Conclusion: A Strategic Approach is Essential When Buying a Company in Serbia
The process of company sale and share transfer in Serbia operates on an investor-friendly and relatively flexible legal ground. However:
- The choice between share deal / asset deal,
- If public, mandatory public offers and SEC processes,
- Competition law and sector-specific licenses/approvals,
- Tax and accounting implications,
- Human resources and international mobility aspects
make each transaction unique. Without professional planning, a transaction that appears to be “quick and easy” can lead to serious risks on the regulatory, tax, or labor law side.
When making your investment decision, it is critical to proceed with a holistic approach that considers both Serbian legislation and your global structure for long-term success and cost optimization.
Important Disclaimer
This text is prepared for general informational purposes and should not be interpreted as legal, financial, or tax advice. Serbian legislation, corporate law, tax, and investment regime may change over time; application may vary depending on the specifics of the case.
Before making any company sale, share transfer, or investment decision, you should review the current regulations with a competent lawyer, financial advisor, and relevant official authorities in Serbia and obtain professional support. No responsibility is accepted for the consequences of transactions made based on the information here.
