Moving From an Entrepreneur Business to a DOO in Serbia: What Foreigners Must Know Before Scaling

Why Entrepreneurs Choose It Initially

The entrepreneur business structure in Serbia is designed for simplicity. It is especially attractive to:

• Digital nomads

• Consultants and freelancers

• Solo service providers

• New founders testing a market

Key advantages include:

• Flat-rate monthly tax (paušalni porez)

• No bookkeeping required

• No quarterly financial filings

• Minimal operational overhead

• Revenue cap of approximately €50,000 per year (depending on activity and municipality)

For early-stage businesses, this model is efficient and cost-effective.

As a business grows, several limitations begin to surface.

Common Signs You’ve Outgrown It

• Annual revenue approaching or exceeding €50,000

• Desire to add business partners

• Need for multiple registered activity codes

• Increased legal or client-facing liability

• Plans to hire employees

• Expansion into regulated industries

At this point, remaining an entrepreneur can expose the owner to unnecessary legal and financial risk.

A DOO (Društvo sa Ograničenom Odgovornošću) is the Serbian equivalent of an LLC or limited liability corporation.

It is a separate legal entity, distinct from the individual founder, with its own rights, obligations, and liabilities.

1. Limited Liability Protection

The most critical advantage is liability separation.

• Entrepreneur: You are personally liable for business obligations

• DOO: The company is liable—not you personally

If a client dispute or lawsuit arises, claims are made against the company, not your personal assets.

An entrepreneur business can only be owned by one individual.

A DOO allows:

• Multiple shareholders

• Clear ownership percentages

• Capital investment structures

• Formal partnership agreements

This is essential for scaling or attracting investors.

Entrepreneurs are typically limited to one primary activity code.

A DOO can:

• Register multiple activity codes

• Expand into new industries

• Operate diversified revenue streams

This flexibility is crucial for evolving businesses.

A DOO supports:

• Proper employee hiring

• Structured payroll

• Long-term operational growth

For businesses with staff or physical offices, this structure is significantly more stable.

Unlike entrepreneurs, DOOs must have licensed bookkeeping by law.

This includes:

• Monthly accounting

• Financial statements

• VAT tracking (if applicable)

• Payroll compliance

While this adds cost, it also provides clarity, compliance, and credibility—especially when dealing with banks, partners, or authorities.

The Signage and Inspection Problem

One of the most overlooked risks when converting from an entrepreneur business to a DOO involves business premises compliance.

If you operate from a physical office:

• Your business name and registration details must match exactly what is displayed on the door

• Inspections in Serbia are real and frequent

• Fines can be issued for incorrect or outdated signage

The Catch

When you officially convert:

1. The entrepreneur business is closed

2. The DOO is opened

3. Your old signage instantly becomes non-compliant

However, you cannot update signage before approval, and immediate changes are often impossible due to scheduling.

This creates a short but dangerous compliance window.

Instead of directly converting, the safer method is:

1. Keep the entrepreneur business open

2. Register a new DOO separately

3. Use a virtual office arrangement (even at your own address, if allowed by lease)

4. Open DOO bank accounts

5. Update signage once the DOO is fully approved

6. Only then close the entrepreneur business

This approach:

• Eliminates inspection risk

• Avoids signage violations

• Ensures uninterrupted compliance

While slightly more expensive upfront, it saves significant stress and potential fines.

Businesses with physical locations should ensure their lease allows:

• Multiple registered companies at one address

• Hosting virtual offices legally

This documentation is critical during inspections and protects you during structural transitions.

Inspectors may request:

• Lease agreements

• Fire safety documentation

• Escape plans

• Employee contracts

• Payroll registrations

Any missing element can result in penalties. Proper planning during a business transition prevents these issues entirely.

Moving from an entrepreneur business to a DOO in Serbia is a natural progression for growing foreign-owned businesses—but it must be done carefully.

Key takeaways:

• Entrepreneurs are ideal for early stages

• DOOs provide protection, scalability, and flexibility

• Direct conversions carry hidden compliance risks

• A staged transition is often the safest solution

With proper planning, the transition can be smooth, compliant, and strategically sound.

If you are approaching the limits of your entrepreneur business—or want to structure your Serbian company correctly from the start—professional guidance matters.

Relocation Serbia provides end-to-end support for:

• Business restructuring

• DOO formation

• Virtual offices

• Compliance strategy

👉 Book a paid consultation to receive tailored advice and avoid costly mistakes.

Your Move, Our Mission.