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Position of Persons Working for Foreign Employers in Serbia

Position of Persons Working for Foreign Employers in Serbia

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Amendments to the Law on Pension and Disability Insurance (“the Law”) from 2019, notably Article 11 thereof, have eradicated the practical issues that used to exist in relation to the mandatory social insurance of persons working for foreign employers in Serbia.

Amendments to the Law from 2019

Namely, the Law on Amendments to the Law, published in the Official Gazette of RS no. 86/2019 from December 6, 2019, changed the scope of the term, i.e., prescribed categories of insured employees, by deletion of provision of Article 11, paragraph 1, item 7) of the Law, which reads “Serbian nationals employed abroad, who are not subject to mandatory insurance during such period of working for a foreign insurance holder, or who cannot exercise or use the rights from pension and disability insurance under the regulations of such state outside its territory.”

The reason for this is the fact that, under the previously mentioned provision, such persons were subject to the mandatory insurance only if they applied thereto and submitted appropriate documentation, i.e., evidence of their work abroad, thus it was possible to avoid the subject obligation.

At the same time, Article 3 of the abovesaid Law on Amendments to the Law introduced item 3a) to Article 12, paragraph 1 of the said regulation, establishing thereby the categories of insured persons performing independent activities, under which the status of insured employees shall also be applied to “the persons working on the territory of the Republic of Serbia for foreign employers who do not have registered their representative offices in the Republic of Serbia, and which earn salary for the performed work, while they are not insured on other grounds.”

Practical implications of the respective amendments

The scope of the insured persons who perform independent activities is thus expanded by inclusion of persons working in Serbia for foreign employers, provided that such employers do not have registered representative offices in Serbia, as well as that the said persons earn salary for their work, if they are not insured on other grounds.

In relation thereto, Article 36 of the Law on Amendments to the Law, i.e., Article 191a of the Law, prescribes that the obligation to pay contributions for pension and disability insurance, as well as deadlines and obligations to submit applications for this category of insured persons, shall be subject to the regulations on tax procedure and tax administration, personal income tax, contributions for mandatory social insurance, and other regulations within the scope of competence of the Ministry of Finance.

Such specification of the rights and obligations of the respective category of insured persons significantly reduces the possibility of different misconducts in this regard and aligns the Law with provisions of regulations on personal income tax and contributions for mandatory social insurance.

This article is to be considered as exclusively informative, with no intention to provide legal advice. If you should need additional information, please contact us directly.

By Lara Maksimovic, Senior Associate, PR Legal

PR Legal at a Glance

PR Legal is a Serbian business law firm which renders advice on a full range of corporate matters, from day-to-day legal issues to large M&A and capital-raising transactions. We provide high-quality legal services to companies, entrepreneurs, private entities, and public institutions, in a modern and pro-active manner, based on unique professional experience in high-profile transactions and disputes.

Always aiming for practical feasibility, and when necessary, dig deep in order to secure our clients’ best interests, either before the court, state authorities or counterparties. In any case, commitment is omnipresent in all our work.

We distinguish ourselves from our competitors through understanding of commercial interests considering present legal framework, by providing smart and cost-effective business solutions, and most of all by our passion for doing business.

In PR Legal we believe that exceptional results can be achieved only when talented and reliable people work together in the appropriate environment. With such approach and commitment, our focus is on teamwork and encouraging of relationships based on trust and cooperation. Investment in our people is investment in our future, which allows us to provide comprehensive and top-quality assistance to our clients.

We care about our clients, while the building of strong relationships and a culture of excellent client service remains our main compass.
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