Employment Contracts and NDAs in Serbia: What Foreign Business Owners Must Know Before Hiring
TL;DR: Hiring your first employee in Serbia is a major milestone for any business owner. For foreign entrepreneurs, however, it is also one of the most misunderstood stages of operating a company in the country.
Many business owners assume that employment contracts and non-disclosure agreements (NDAs) in Serbia work similarly to those in Canada, the United States, the UK, or Australia. In reality, Serbia’s labor framework is law-first, employee-protective, and largely non-negotiable.
This article explains the key differences between Serbian employment contracts and those in common Western jurisdictions, as well as how NDAs function under Serbian law, particularly for companies handling sensitive information.
If you have set up a business in Serbia and are now preparing to hire employees, understanding these rules is essential to staying compliant and protecting your company.
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One of the biggest adjustments for foreign business owners is understanding that employment contracts in Serbia are not freely negotiated documents.
In many Western countries, employers and employees may negotiate terms that partially override statutory rules. In Serbia, this is not permitted.
You Cannot Contract Out of Employee Rights
Serbian employment contracts must strictly follow the Labor Law of the Republic of Serbia. Any clause that attempts to reduce or remove statutory employee rights is considered invalid, even if both parties agree to it.
If a dispute arises, Serbian courts will always default to employee protection, regardless of what the written contract states.
In practical terms, employment contracts in Serbia serve to confirm existing legal obligations, not replace them.
Fixed-term employment is common in Serbia, especially for probationary periods. However, foreign employers are often caught off guard by how these contracts convert.
Silence Equals Permanency
If a fixed-term contract expires and the employer does not explicitly renegotiate or terminate it, the contract automatically converts into a permanent employment agreement.
This conversion happens by law, not by consent.
Best practice is to:
Use short initial contracts (e.g., three months)
Set reminders well before the expiration date
Formally renegotiate, extend, or terminate the agreement in writing
Remaining silent is one of the most expensive mistakes foreign employers make in Serbia.
In Serbia, notice periods are not controlled solely by the employer.
Employers Cannot Walk Employees Out Overnight
Termination requires compliance with:
Statutory notice periods
Proper documentation
Lawful grounds for dismissal
Likewise, employees cannot simply resign without notice. The law applies equally to both parties, and minimum notice periods are mandatory.
Serbia has a strong culture of statutory paid leave, which is embedded directly into employment law.
Annual Paid Vacation
Employees are entitled to a minimum of 21 paid working days per year. These days are paid as part of the employee’s regular salary, not as a separate vacation fund.
This often results in:
Extended summer vacations
Slower administrative processes during holidays
Reduced availability in government offices during peak periods
Additional Paid Leave Categories
Employers must also provide paid leave for:
Marriage
Childbirth
Death of a close family member
Blood donation
Employers may request proof, but in practice, most rely on good-faith declarations unless there is reason for concern.
Another major difference for foreign employers is how compensation is discussed.
Net Salary Is the Standard
In Serbia:
Salaries are discussed monthly
Compensation is quoted in net take-home pay
The employer covers all additional payroll taxes and social contributions
These contributions include:
Pension insurance
Health insurance
Unemployment contributions
Payroll compliance filings
This means employers must calculate total employment cost carefully before making an offer.
Non-Disclosure Agreements in Serbia are standalone legal documents, not optional clauses buried inside employment contracts.
NDAs Apply During and After Employment
A Serbian NDA remains binding:
During employment
After employment ends
Without automatic expiration, unless explicitly stated
Confidentiality obligations apply to:
Verbal disclosures
Digital materials
Internal knowledge
Business processes and client information
Unlike many Western jurisdictions, Serbian law allows predefined contractual penalties in NDAs.
Financial Consequences Are Clearly Defined
Employers may specify that a breach of confidentiality triggers a fixed penalty, often calculated as:
Several months of the employee’s net salary
For example, breaching an NDA may result in a penalty equivalent to three to five months of net pay, regardless of additional damages.
This structure creates strong deterrence and clarity for both parties.
NDAs signed in Serbia must be enforced locally.
You cannot:
Move disputes to foreign courts
Apply foreign governing law
Bypass Serbian jurisdiction
All disputes are handled under Serbian law, using employee-protective interpretations.
Non-compete agreements are not automatic in Serbia.
Employers Must Pay for Non-Competes
If an employer wishes to restrict post-employment competition:
The restriction must be explicitly written
Financial compensation is mandatory
A separate agreement is often required
Without compensation, non-compete clauses are unenforceable.
Serbia operates on a strong paper-trail culture.
Best practices include:
Written notices
Signed acknowledgments
Formal amendments
Clear contract timelines
Proper documentation protects employers during inspections, audits, and disputes.
Serbian employment law is straightforward once understood—but extremely unforgiving when misunderstood.
At Relocation Serbia, we assist clients not only with:
Business formation
Temporary residency
Corporate structuring
…but also with:
Employment contract drafting
NDA preparation
Compliance reviews
HR structuring for growing businesses
No. Serbian employment contracts are law-first and cannot override statutory employee rights.
Yes. If a contract expires without formal action, it converts to permanent employment by law.
Is paid vacation mandatory in Serbia?
Yes. Employees receive a minimum of 21 paid working days annually, plus additional paid leave categories.
Salaries are discussed as monthly net take-home pay. Employers cover taxes and contributions separately.
Yes. NDAs apply indefinitely unless a specific expiration is written into the agreement.
Only if they are compensated financially and explicitly agreed upon.
Hiring employees in Serbia offers stability, clarity, and strong legal structure—but only if you understand how the system works.
Employment contracts confirm the law, NDAs carry real financial consequences, and silence can unintentionally create permanent obligations. With the right guidance, Serbia can be an excellent jurisdiction for building a compliant, professional team.
If you are preparing to hire your first employee or need your contracts reviewed, we encourage you to book a paid consultation with Relocation Serbia. Our team will ensure your employment framework is legally sound, practical, and aligned with your business goals.
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