Structuring a Private Charitable Foundation in Serbia

Increasingly, high-net-worth individuals (HNWIs), family offices, and cross-border entrepreneurs are turning to Serbia for this purpose, recognizing the foundation’s potential not just as a philanthropic vehicle but as a powerful tool for estate planning, privacy, and legal protection.

The Legal Framework

Unlike common law trusts or foundations in some EU jurisdictions, Serbian private charitable foundations are distinctly separate legal entities. Once assets are transferred to the foundation, they cease to be part of the founder’s personal estate. This separation is the cornerstone of their asset protection capability.

Serbian law does not recognize founders or contributors as beneficiaries. Instead, the foundation operates according to its chartered purpose—whether charitable, personal, or strategic. This structure shields assets from personal disputes, creditor claims, divorce proceedings, and inheritance litigation, while also sidestepping certain disclosure and transparency obligations that founders in other jurisdictions must navigate.

From a regulatory perspective, foundations in Serbia enjoy relatively low scrutiny compared to Western European models, and yet maintain full legal recognition domestically and abroad.

Operational Control Without Ownership Exposure

Founders retain practical control over foundation assets through the appointment and oversight of the board of directors and the foundation’s legal manager. While direct ownership is relinquished, strategic influence remains intact.

This separation—control without legal ownership—is crucial. It ensures that the assets are not considered part of the founder’s estate, and therefore, not subject to seizure or division. However, this balance must be carefully managed. Excessive direct involvement or micromanagement can undermine the legal independence of the foundation and weaken its protective function.

The key lies in maintaining clear corporate governance protocols while ensuring the founder’s wishes are implemented through compliant and well-structured board resolutions and operational mandates.

Banking

Foundations in Serbia can open and maintain accounts with local banks, with institutions generally viewing them as credible and low-risk entities. The legal manager—not the founder—is recognized as the authorized representative by financial institutions, further distancing the founder from liability or disclosure exposure.

Beyond banking, the Serbian foundation may own shares in commercial enterprises or even act as a holding entity for multiple operating companies. This is particularly attractive for international entrepreneurs seeking centralized asset control across multiple jurisdictions.

Moreover, the structure allows for the receipt of income—dividends, royalties, rents, and capital gains—provided these proceeds support the foundation’s stated objectives and do not exceed the foundation’s capital base disproportionately.

This article outlines how to structure a personal foundation in Serbia, not only to meet charitable or personal legacy goals, but also to optimize control, risk mitigation, and long-term succession planning.

Practical Advantages for HNWIs and Global Families

The Serbian private foundation stands out for several reasons:

• Founders maintain operational influence without public attribution of ownership or beneficiary status.
• The registration process is streamlined and relatively fast, with foundations operational within weeks.
• Foundations pay only a 2.5% gift tax on asset transfers, and there is no VAT charged if the transferor is not VAT-registered.
• Foundations can be established remotely via power of attorney, eliminating the need for physical presence.
• Founders retain the ability to modify the foundation’s governance and dissolve it without punitive costs.

In short, Serbian endowments offer a versatile structure for international wealth planning—an elegant middle ground between traditional offshore foundations and overregulated EU models.

Residency Requirements

The foundation may be established by one or more individuals or legal entities, including foreign nationals and non-resident companies. The legal structure consists of:

• May serve on the board if permitted by the charter.
• A minimum of three individuals appointed by the founder, including a chairman.
• A natural person with legal residency in Serbia who serves as the foundation’s legal representative.

It’s worth noting that the manager must hold a valid Serbian residence permit (temporary or permanent). Residency can be acquired through real estate investment, company registration, or other qualifying grounds. For clients without a suitable local candidate, nominee management services are available starting from EUR 4,750 annually.

Income Sources

A Serbian private charitable foundation must be capitalized with assets valued at no less than EUR 30,000. These can include real estate, equity, intellectual property, cash, or other legal interests. The foundation may also receive donations, grants, dividends, rents, or interest income, provided that such inflows remain proportionate to the initial asset base.

Assets within the foundation are legally independent of the founder or board members, meaning they are protected from third-party claims and excluded from marital or inheritance disputes. At the same time, inheritance rights to the foundation’s management or control are non-transferable, ensuring a clear and enforceable separation between personal and foundation property.

Financial Compliance

Although the foundation operates on a non-profit basis, it must maintain compliant accounting records and fulfill its statutory obligations. Tax is applied at a flat rate of 2.5% when assets are gifted to the foundation, and VAT rules apply only in specific cases involving VAT-registered entities.

Foundations are not subject to corporate income tax on holding activities, and closure of the structure does not trigger capital gains tax or significant dissolution fees, assuming proper compliance.

Documentation

To register a Serbian private charitable foundation, clients must provide:

• Founder identification documents (passport, company info)
• A charter outlining the foundation’s goals
• Management structure details
• Board member and manager documents
• Resolution on foundation creation and signatory powers
• Foundation memorandum
• Completed registration forms

We assist clients through every stage, from drafting documentation to banking setup and post-registration formalities.

Cost Overview

The cost of establishing a Serbian private charitable foundation typically starts at EUR 18,000, which includes:

• Legal structuring and incorporation
• Drafting charter and governing documents
• Registration and state fees
• Opening a bank account
• Providing a Serbian address (from EUR 350/month)
• Appointing a local manager (from EUR 4,750/year)
• Asset contribution (minimum EUR 30,000)
• Document translation (from EUR 60 per page)

If remote setup is preferred, a power of attorney is required (starting from EUR 950), which we can assist in drafting and legalizing.

Final Thoughts

Whether your objective is succession planning, philanthropy, or legal shielding of assets, the Serbian private charitable foundation is an elegant, practical solution.

With proper legal guidance and operational structure, this tool becomes more than just a holding entity—it becomes a cornerstone of long-term financial architecture.