Guide
An overview of the three Serbian legal forms (flat-rate sole trader, sole trader on business books, and an LLC) compared by liability, taxation, bookkeeping and capital, so you can pick the form that pays off best for you.
Choosing a form is your first real business decision, and it is worth taking calmly, because it sets how much tax you pay, how many books you keep and, most importantly, whether you risk personal assets if the business does not take off. The good news is that you are not locked in: many people start as flat-rate sole traders and later move to books or a d.o.o. as they grow. Below we compare the three forms the way you actually experience them, through cost, risk and how you get your own money out, so you can easily see which pays off best for you.
Best for Freelancers and small, low-cost activities with turnover up to 6 million dinars a year.
Best for Entrepreneurs outgrowing the flat-rate or with significant deductible costs.
Best for Growing companies, with partners, investment or higher risk.
Capital divided into shares, suited to large companies and raising capital from investors. Limited shareholder liability, a statutory minimum capital of 3,000,000 dinars, the most complex administration and a mandatory audit.
Two or more partners doing business together, where all partners are liable without limit and jointly with their entire personal assets. Rarely used in practice.
At least one general partner liable with their entire assets and at least one limited partner liable only up to their contribution. Rarely used.
If your activity is allowed as flat-rate, your costs are low, and turnover stays under 6 million dinars a year, a flat-rate (paušal) sole trader is usually the cheapest and simplest. Switch to keeping books when your real costs are high, and to a d.o.o. when you need to protect personal assets, have partners, or plan bigger growth.
The flat-rate limit is 6,000,000 dinars of turnover in a calendar year. If you cross it, you lose flat-rate status and must move to keeping business books (or open a d.o.o.). A separate 8,000,000 dinar threshold triggers mandatory VAT registration. A raise to 8 million was proposed in June 2026 but has not been adopted, so 6 million still applies.
As a sole trader (flat-rate or keeping books) you are liable for business debts with all your personal assets, so in principle they can be reached. With a d.o.o. liability is limited to the company's assets, so the owner's personal property is in principle protected. This is the main reason people pick a d.o.o. for higher-risk work.
Flat-rate taxation is not allowed for, among others, wholesale and retail trade, hospitality/catering, financial intermediation and insurance, advertising and market research, and accounting services. Most IT and other service activities can be flat-rate. We check your activity code before you register.
Opening a sole trader (radnja) is cheaper and faster: the APR registration fee is around 2,500 dinars and it can often be done the same or next day. A d.o.o. costs more (APR fee 8,000 dinars from 2026, plus notary certification) and has a few more steps, but gives you limited liability.
A guide to starting a company in Serbia: choosing a legal form, APR registration and first obligations.
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